M/s. Believers Church India, Thiruvalla V. The ITO, Thiruvalla

MA 30/COCH/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 3853 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-01-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 29-07-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A

Judgement Text

MP NOS 30 & 31/C/2015 . 1 IN THE INCOME TAX APPEL L A TE T R IBUNAL COCHIN BENCH , COCHIN BEFORE S/SH RI B P JAIN , A M & G EORGE GEORGE.K , J M MISCELLANEOUS APPLICATION NO.30/COCH/2015 ARISING OUT OF ITA NO . 162/COCH/2014 (ASST YEAR 2010 - 11 ) M/S BELIVERS CHURCH INDIA ST THOMAS NAGAR KUT TAPPUZHA THIRUVALLA PAN NO. AAATB4723D VS THE INCOME TAX OFFICER WARD 1 THIRUVALLA ( APP LICANT ) (RESPONDENT) MISCELLANEOUS APPLICATION NO.31/COCH/2015 ARISING OUT OF ITA NO. 163/COCH/2014 (ASST YEAR 2010 - 11 ) M/S GOSPEL FOR ASIA MANJADI PO THIRUVAL LA 689 103 PAN NO.AAATT0907G VS THE INCOME TAX OFFICER WARD 1 THIRUVALLA ( APP LICANT ) (RESPONDENT) ASSESSEE BY SH M S VENKATACHALAM,CA REVENUE BY SH KP GOPAKUMAR, SR DR DATE OF HEARING 29 TH JAN 201 6 DATE OF PRONOUNCEMENT 29 TH J AN 2016 OR D E R PER GEORGE GEORGE. K. J M: THESE TWO MISCELLANEOUS PETITIONS FILED BY TWO DIFFERENT ASSESSEES , ARISE OUT OF THE CONSOLIDATED ORDER OF THE TRIBUNAL IN ITA NO. 162/COCH/14 AND 163/COCH/2014 DATED 12.12.2014. MP NOS 30 & 31/C/2015 . 2 2 SINCE THESE MISCELLANEOUS PETITIONS ARISE O UT OF THE CONSOLIDATED ORDER OF THE TRIBUNAL AND COMMON ISSUES ARE INVOLVED IN THESE MISCELLANEOUS PETITIONS, THEY WERE HEARD TOGETHER AND DISPOSE O F F BY THIS CONSOLIDATED ORDER. 3 THE TWO GRIEVANCES THAT ARE RAISED IN THESE MISCELLANEOUS PETITIONS ARE I DENTICAL, EXCEPT FOR VARIANCE IN FIGURES. THEREFORE, THE GRIEVANCE RAISED IN MP NO.30/COCH/2015 IS REPRODUCED BELOW FOR READY REFERENCE: I) GROUND NO.2,3,4 AND 5 OF APPEAL RAISED BY THE APPELLANT WAS THAT THE LOANS AND ADVANCES GIVEN BY THE RESPONDENT TRUS T FOR RS. 44,48,80,136.00 WAS AN INVESTMENT MADE U/S 13(1) (D)(I) R.W.S 11(5). HONBLE TRIBUNAL WHILE DISPOSING THESE GROUNDS RAISED BY THE APPELLANT, GAVE DIRECTIONS WHICH WERE BEYOND THE SCOPE OF APPEAL WITH A FINDING AT PARA 8 THAT BOTH AUTHORITIES HAD FAILED TO CONSIDER PROVISIONS OF EXPLANATION TO SECTION 11(2) AND 11(3) (D), WHEN THE AO AS WELL AS CIT(A) WERE CLEAR AND SATISFIED THAT THE LOANS GIVEN WERE NOT OUT OF ACCUMULATED FUND BUT OUT OF CURRENT RECEIPTS ONLY. II) HONBLE TRIBUNAL HAS OBSERVED A T PARA 4 THAT IT IS NOT IN DISPUTE THAT SUBSTANTIAL INCOME OF THE ASSESSEE TRUST WAS NOT USED BY BOTH THE ASSESSEES FOR THE PURPOSES FOR WHICH THEY WERE FORMED. THE RESPONDENT HAD NO WHERE STATED SO, NOR DEPARTMENT HAD RAISED SUCH AN ISSUE IN ITS GROUNDS. ASSESSEE IS A PUBLIC RELIGIOUS TRUST OPERATING SINCE 1993 AND HAVING AN IMPECCABLE REPUTATION. SUCH GENERALIZED OBSERVATION WAS GRAVELY AFFECTED ITS REPUTATION AND PUT SEEDS OF SUSPICION ON THE WORKING OF TRUST IN THE MIND OF GENERAL PUBLIC AND DONORS. TH E OBSERVATION WAS NOT GERMANE TO THE ISSUE NOR BORNE ON RECORDS AND HENCE IT MAY PLEASE BE EXPUNGED, AND AO DIRECTED TO PRODUCE UNTRAMMELED BY SUCH OBSERVATIONS. 4 T HE LD AR , IN THE COURSE OF HEARING OF THESE MISCELLANEOUS PETITIONS, CONFINED HIS SUBMISSI ONS TO THE SECOND GRIEVANCE AND THE WRITTEN SUBMISSIONS IN THIS REGARD, ARE REPRODUCED BELOW: MP NOS 30 & 31/C/2015 . 3 THE HON . TRIBUNAL HAS MADE ON OBSERVATION AT PARA 4 THAT ' I T IS NOT IN DISPUTE THA T SUBSTANT I AL INCOME FOR THE ASSESSEE TRUST WAS NOT USED BY BOTH THE ASSESSEE ' S FOR THE PURPOSE FOR WHICH THEY WERE FORMED. T HE ORIGINAL ASSESSMENT ORDERS MADE BY T HE ASSESSING OFF I CER , THE O R DER OF THE CIT (APPEALS) , AND T HE GROUNDS OF APPEAL RAISED BY THE DEPARTMENT IN THE APPEAL FI L ED BEFORE THE TRIBUNAL , N EVER CONTAINED SUCH AN OBSERVATION (PAPER BOOK) , NOR ANYTH I NG ADVERSE TO THE ASSESSEE ON THE METHOD OR MODE OF UT I L I ZATION BY THE ASSESSEE . THE OBSERVATIONS MADE CAUSE I RREPARABLE DAMAGE TO THE REPUTAT I ON OF THE T R USTS . S I NCE THE ORDERS OF THIS HON . TRIBUNAL ARE AVAILAB L E TO A LL PUBLIC ONLINE , THE OBSERVATION WH I CH I S ' OB I TER ' IN NATURE HAS CAUSED DOUBT AND SUSPICION I N THE M I NDS OF DONORS AND WELL W I SHERS. IT HAS ALSO R ESULTED I N A SITUATION WHERE THE ASSESSING OFFICER HAS BEEN LEFT WITH NO DISCRETION ON THE REMANDED ISSUES . BOTH THE TRUSTS ARE PUBLIC RELIGIOUS TRUSTS . BELIEVERS CHURCH INDIA HAS BEEN OPERATING SINCE 1993 AND GOSPEL FOR ASIA OPERATING SINCE 1980 , AND SINCE THAT YEAR ASSESSED AND CONSIDERED BY REVENUE AS PUBLIC RELIGIOUS AND CHARITABLE TRUST WITH REGISTRATIONS U/S 12A INTACT . THE GENERALIZED OBSERVATION WHICH HAS AFFECTED THE REPUTATION OF THE TRUSTS AND WHICH ARE NOT GERMANE TO ANY OF THE ISSUES RAISED IN THE REVENUE APPEALS , REQUIRES TO BE EXPUNGED, I N THE INTEREST OF JUSTICE , THIS OBSERVATION DO NOT EMANAT E FROM THE ISSUES RAISED AND ITS ' PRESENCE IN THE ORDER IS A GLARING MISTAKE APPARENT ON RECORD . IN A SIMILAR SITUATION HON ABLE BOMBAY BENCH OF THE ITAT EXPUNGED CERTAIN REMARKS MADE BY IT ON ICAI , IN MISCELLANEOUS APPLICATION NO. 72 AND 73/MUM/2015 DA TED 04.09.2015 (COPY ATTACHED). THE RESPONDENT BEG TO EXPUNGE THE OBSERVATION IN PARA 4 OF THE ORDER AND ALSO PRAY TO GIVE A DIRECTION TO THE AO TO PROCEED UNTRAMMELED BY SUCH OBSERVATION . 5 THE LD DR, PRESENT WAS DULY HEARD. 6 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE REVENUE HAD FILED APPEAL ITA NO S .162 /COCH/2014 & 163/COCH/2014. THE GRIEVANCE OF THE REVENUE WAS THAT THE COMMISSIONER ERRED IN HOLDING THAT THE MP NOS 30 & 31/C/2015 . 4 ASSESSEE HAS NOT VIOLATED THE PROVISIONS OF SECTION 11 OF THE ACT AND HENCE THE ADDITION MADE U/S 13(1)(D)(I) R.W.S 11(5) IS NOT SUSTAINABLE. ADMITTEDLY, THE TRIBUNAL AT PARA 4 , HAS OBSERVED AS UNDER: IT IS NOT IN DISPUTE THAT SUBSTANTIAL INCOME FOR THE ASSESSEE TRUST WA S NOT USED BY BOTH THE ASSESSEES FOR THE PURPOSE FOR WHICH THEY WERE FORMED. 6 W E FIND THAT THE ABOVE OBSERVATION HAS NOT BEEN MADE NEITHER BY THE AO NOR BY THE CIT(A). THIS GENERALIZED OBSERVATION OF THE TRIBUNAL; THEREFORE, IS NOT GERMANE TO THE DISPUTE THAT IS RAISED IN THE APPEAL BY THE REVENUE. THEREFORE, THE SAME NEEDS TO BE EXPUNGED AND IT IS ACCORDINGLY EXPUNGED. T HE AO SHALL CONSIDER THE MATTER IN ACCORDANCE WITH LA W UNTRAMMELED BY SUCH OBSERVATION . THEREFORE, THE MISCELLANEOUS PETITIONS FILED BY THE ASSESSEES ARE DISMISSED, SUBJECT ION TO THE ABOVE MODIFICATION. IT IS ORDERED ACCORDINGLY. 7 IN THE RESULT, THE MISCELLANEOUS PETITIONS FILED BY THE ASSESSEE ARE DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF JAN 2016 . SD/ - SD/ - ( B P JAIN ) ( GEORGE GEORGE K ) ACCOUNTA NT MEMBER JUDICIAL MEMBER COCHIN: DATED 29 T H , JAN 2016 RAJ* MP NOS 30 & 31/C/2015 . 5 COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT , 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN 1 DATE OF DICTATION 29 JAN 201 6 2 DT ON WHICH THE TYPED DRAFT IS PLACED BEFOR E THE DICTATING MEMBER 29 JAN 2016 3 DT ON WHICH THE APPROVED DRAFT COMES TO THE SR PS/PS 4 DT ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER 5 DT OF PRONOUNCEMENT 6 DT ON WHICH THE FILE GOES TO THE BENCH CLERK 7 DT ON WHICH TH E FILE GOES TO THE HEAD CLERK 8 DT ON WHICH THE FILE GOES TO AR 9 DT OF DISPATCH OF THE ORDER