M/S MARIMALLAPPAS CHARITIES V. THE ASST. COMMISSIONER OF INCOME TAX

ITA/642/2016

AI Insights

The case involves M/s Marimallappa's Charities, which appealed against the orders of the Income Tax Appellate Tribunal and the assessing authorities, which denied them exemption under section 11 of the Income Tax Act, 1961, for the Assessment Year 2006-07. The primary legal issues revolved around the jurisdiction of the Assessing Officer and appellate forums to adjudicate the genuineness of the receipts by the trust, and whether the trust was engaged in charitable activities as defined under the Act. The High Court referenced previous decisions in similar cases, which had ruled in favor of the trusts, leading to the decision to allow the appeal and quash the earlier orders.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 754719 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 11-11-2020
• Assessment Year: misc
• Other Referred Cases: COMMISSIONER OF INCOME-TAX Vs. SRI ADICHUNCHANAGIRI MAHASAMSTANA MUTT, ITA No.800/2009, ITA No.52/2012
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALGI
• Assessee Lawyers: M
• Keywords: Assessment Year 2006-07; Charitable Trust; Exemption under section 11; Income Tax
• Section: 11; 12AA; 12A; 13; 12; 2(24)(iia); 260-A

Judgement Text

"1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF NOVEMBER 2020 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD I.T.A. NO.642 OF 2016 BETWEEN: M/S MARIMALLAPPA'S CHARITIES NARAYANASHASTRI ROAD MYSORE - 570 001. REP. BY ITS HON. SECRETARY ... APPELLANT (BY SRI.M.VEERABHADRAIAH, ADV.) AND: 1. THE ASST. COMMISSIONER OF INCOME TAX, RANGE - 1, MYSORE VISHWESHWARANAGAR NO.55/1, SHILPASHREE BUILDING OPP TO. STERLING TALKIES MYSORE - 570 087. 2. THE COMMISSIONER OF INCOME TAX MYSORE VISHWESHWARANAGAR NO.55/1, SHILPASHREE BUILDING OPP. TO. STERLING TALKIES MYSORE - 570 087 ... RESPONDENTS (BY SRI.JEEVAN J. NEERALGI, ADV.) 2 THIS I.T.A. IS FILED UNDER SECTION 260-A OF I.T.ACT, 1961, ARISING OUT OF ORDER DATED 24-06-2016 PASSED IN ITA NO.1492/BANG/2010, FOR THE ASSESSMENT YEAR 2006-07, PRAYING TO: I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. II. ALLOW THE AND SET ASIDE THE ORDER PASSED BY THE ITAT, BENGALURU DATED 24.06.2016 PASSED IN ITA NO.1492/BANG/2010 FOR THE ASSESSMENT YEAR 2006-07, CONSEQUENTLY SET ASIDE THE ASSESSMENT ORDER DATED 20.04.2007 PASSED BY THE ASSESSING AUTHOIRTY AND FIRST APPELLATE AUTHORITY ORDER DATED 25.10.2010 PASSED IN ITA NO.162 CIT(A) MYS/2008-09 RELATING TO ASSESSMENT YEAR 2006-07. THIS I.T.A. COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT Mr.M.Veerabhadraiah, learned counsel for the assessee. Mr.Jeevan J.Neerlagi, learned counsel for the revenue. 2. This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment Year 2006-07. The appeal was admitted by a Bench of this 3 Court vide order dated 25.10.2017 on the following substantial questions of law: a) Whether the Assessing Officer and appellate forums have jurisdiction to adjudicate the genuineness of the receipts by the trust which is vested with the Commissioner under Sections 12A and 12AA of the IT Act especially when Sections 12(1) and 2(24)(iia) of the IT Act deems all income received by the assessee Trust to the rigor of Sections 11, 12 and 13 of the IT Act? b) Whether the Tribunal is justified in law in holding that the appellant is not engaged in charitable activities which is contrary to material on record and consequently passing perverse order and there by denying the appellant the exemption under section 11 of the Act on the facts and circumstances of the case? 4 3. When the matter was taken up today, learned counsel for the assessee submitted that the aforesaid substantial questions of law have already been answered against the revenue by a Bench of this Court in 'COMMISSIONER OF INCOME-TAX Vs. SRI ADICHUNCHANAGIRI MAHASAMSTANA MUTT' passed in ITA No.800/2009 and aforesaid decision was followed by another Division Bench of this Court in ITA No.52/2012 vide judgment dated 14.01.2019. The aforesaid submission could not be disputed by the learned counsel for the revenue. 4. For the reasons assigned in the aforementioned judgments passed by two Division Benches of this Court, the substantial questions of law framed in this appeal are answered in favour of the assessee and against the revenue. 5 5. In the result, the order of the Income Tax Appellate Tribunal insofar as it pertains to the Assessment Year 2006-07, is hereby quashed. Accordingly, the appeal is allowed. Sd/- JUDGE Sd/- JUDGE RV "