LITTLE SERVANTS OF DIVINE PROVIDENCE CHARITABLE SOCIETY,PATHANAMTHITTA V. ACIT, EXEMPTION CIRCLE, THIRUVANANTHAPURAM

ITA 129/COCH/2024

AI Insights

The case involves the Little Servants of Divine Providence Charitable Society, which appealed against the order of the National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2016-17. The society, registered under the Society Registration Act and section 12A of the Income Tax Act, 1961, filed a return disclosing nil income, which was later assessed by the AO at a total income of Rs. 58,54,807, including corpus donations as income. The CIT(A) upheld the AO's decision without adequately addressing the society's arguments. The tribunal found merit in the society's contention regarding the treatment of corpus donations and remanded the matter back to the AO for verification.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 31223 (ITAT-COCHIN)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 24-02-2024
• Laws Referred To: Income Tax Act, 1961, Society Registration Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: PAULSON K.P.
• Keywords: Charitable institution; Application of stay
• Section: 143(3); 12A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI PRAKASH CHAND YADAV, JM ITA No. 129/Coch/2024 & SA No. 148/Coch/2024 Assessment Year: 2016-17 Little Servants of Divine Providence Charitable Society House of Providenced, Kunnamatham Pathanamthitta 689581 [PAN: AAATL2831J] .......... Appellant Vs. ACIT, Exemption Circle Aayakar Bhavan, Kowdiar, P.O. .......... Respondent Thiruvananthapuram 695003 Appellant by: Shri Paulson K.P., CA Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 20.11.2024 Date of Pronouncement: 29.11.2024 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 27.12.2023 for Assessment Year (AY) 20016-17. 2 ITA No. 129/Coch/2024 & SA No.148/Coch/2024 Little Servants of Divine Providence Charitable Society 2. Brief facts of the case are that the assessee is a society registered under the Society Registration Act. It is also registered u/s. 12A of the Income Tax Act, 1961 (the Act) .The return of income for AY 2016-17 was filed on 16.10.2016 disclosing total income of Rs. Nil. Against the said return of income assessment was completed by the ACIT (Exemption Circle), Thiruvananthapuram (hearing after “the AO”) vide order dated 17.02.2018 passed u/s. 143(3) of the Act at total income of Rs. 58,54,807/-. While doing so the AO has brought to tax the excess income which was not applied for charitable activities. 3. Being aggrieved, an appeal was filed before the CIT(A) contending that for the purpose of computing total income, the amount of corpus donations cannot be considered as income of the assessee society. However, the CIT(A) confirmed the action of the AO without adverting to the submissions of the assessee society. The CIT(A) merely confirmed the action of the AO. 4. Being aggri4eved, the assessee is in appeal before us in the present appeal. 5. After hearing the rival submissions and pursuing the material on record, we are of the considered opinion that the matter requires remission to the file of the AO with a direction to verify, whether the corpus donations were treated as income. It is the settled position of law that the corpus donations do not form part of income. Therefore, if it is found on due verification that the corpus donations are treated as income, the same may be excluded by the AO for the purpose of computing the quantum of income applied for charitable purposes. 3 ITA No. 129/Coch/2024 & SA No.148/Coch/2024 Little Servants of Divine Providence Charitable Society 6. Since the quantum appeal of the assessee is disposed of, the stay application becomes infructuous, hence dismissed. 7. In the result, the appeal filed by the assessee is partly allowed and the stay application is dismissed. Order pronounced in the open court on 29th November, 2024 Sd/- Sd/- (PRAKASH CHAND YADAV) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 29th November, 2024 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin "