MARY MATHA EDUCATIONAL SOCIETY V. THE COMMISSIONER OF INCOME TAX(PPEALS)

WP(C)/20825/2014

AI Insights

The case involves the Mary Matha Education Society, a charitable institution, which appealed against an interim order requiring them to pay 50% of a tax demand in six monthly installments. The tax demand arose from the institution's claim for exemption on a chitty subscription and depreciation on capital assets, which was disallowed by the Assessing Officer. The first appellate authority granted a stay on 50% of the tax demand, which the petitioner contested in the High Court. The court upheld the appellate authority's decision but modified the start date for the payment installments.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 755738 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 13-08-2014
• Assessment Year: misc
• Other Referred Cases: WPC NO.16311/2014
• Laws Referred To: Travancore-Cochin Literary, Scientific & Charitable Societies Registration Act, 1955, Income-Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: R S KALKURA; M S KALESH; A V PRIYA; HARISH GOPINATH
• Keywords: Assessment Order; Charitable institution; Income tax exemption; Depreciation on capital assets; Chitty subscription
• Section: 12AA

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN WEDNESDAY, THE 13TH DAY OF AUGUST 2014/22ND SRAVANA, 1936 WP(C).No. 20825 of 2014 (C) ---------------------------- PETITIONER : -------------------- MARY MATHA EDUCATION SOCIETY RAJCOT, THYCAUD, TRIVANDRUM - 695 014 REPRESENTED BY ITS CHAIRMAN R. MURUGAN S/O. LATE P. RATNASWAMY, AGED 61 YEARS RESIDING AT 'RAJCOT', TC NO. 24/447 THYCAUD, THIRUVANANTHAPURAM. BY ADVS.SRI.R.S.KALKURA SRI.M.S.KALESH SMT.A.V.PRIYA SRI.HARISH GOPINATH RESPONDENT(S) : ---------------------------- 1. THE COMMISSIONER OF INCOME TAX (APPEALS), TRIVANDRUM AYYAKKAR BHAVAN, KOWDIAR TRIVANDRUM - 695 003. 2. THE ASSISTANT DIRECTOR OF INCOME-TAX (EXEMPTION) TRIVANDRUM, AYYAKKAR BHAVAN, KOWDIAR TRIVANDRUM - 695 003. R1 & R2 BY ADV. SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13-08-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Mn ...2/- WP(C).No. 20825 of 2014 (C) --------------------------------------- APPENDIX PETITIONERS' EXHIBITS : ------------------------------------- EXHIBIT P1 COPY OF THE REGISTRATION CERTIFICATE ISSUED UNDER THE TRAVANCORE -COCHIN LITERARY, SCIENTIFIC & CHARITABLE SOCIETIES REGISTRATION ACT, 1955. EXHIBIT P2 COPY OF THE REGISTRATION UNDER SECTION 12AA OF THE INCOME-TAX ISSUED BY THE COMMISSIONER OF INCOME TAX, TRIVANDRUM DATED 25/2/2005. EXHIBIT P3 COPY OF THE RETURN 30/9/2011 SUBMITTED BY THE PETITIONER. EXHIBIT P4 COPY OF THE ASSESSMENT ORDER DATED 30/3/2014 ISSUED BY THE SECOND RESPONDENT TO THE PETITIONER. EXHIBIT P5 COPY OF THE COMPUTATION SHEET OF THE INCOME OF THE PETITIONER FOR THE ASSESSMENT YEAR 2011-2012. EXHIBIT P6 COPY OF THE MEMORANDUM OF APPEAL SUBMITTED BY THE PETITIONER BEFORE THE IST RESPONDENT DATED 29/4/2014. EXHIBIT P7 COPY OF THE APPLICATION FOR STAY DATED 21/5/2014 SUBMITTED BY THE PETITIONER BEFORE THE FIRST RESPONDENT. EXHIBIT P8 COPY OF THE NOTICE DATED 12/5/2014 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P9 COPY OF THE PETITION FOR EARLY HEARING DATED 21/5/2014. EXHIBIT P10 COPY OF THE APPLICATION DATED 23/5/2014 SUBMITTED BY THE PETITIONERS BEFORE THE SECOND RESPONDENT. EXHIBIT P11 COPY OF THE JUDGMENT DATED 27/6/2014 IN WPC NO.16311/2014. EXHIBIT P12 COPY OF THE ORDER DATED 24.7.2014 ISSUED BY THE FIRST RESPONDENT IN ITA NO. 58/TVM/CIT(A), TVM/14-15. RESPONDENT(S)' EXHIBITS : NIL ------------------------------------------------------------------- //TRUE COPY// P.S. TO JUDGE Mn K.Vinod Chandran, J. --------------------------------------- W.P.(C).No.20825 of 2014-C --------------------------------------- Dated this the 13th day of August, 2014 JUDGMENT The petitioner is aggrieved by the interim order passed in first appeal, as evidenced by Exhibit P12. The petitioner was directed to pay 50% of the demand in six equal monthly instalments, starting from 11.08.2014. 2. The petitioner, a charitable institution, had subscribed to a chitty and had bid the amount at the initial stage itself. The petitioner claimed exemption of the contribution made towards the chitty as eligible for exemption. One another deduction claimed was with respect to depreciation on capital assets. 3. The Assessing Officer disallowed both of the claims. The contribution to the chitty was found to be not eligible for exemption, since the income was applied other than for charitable purposes. With respect to the depreciation on capital assets, it was found that since the assessee has obtained complete exemption on the investments, there cannot be any double benefit and depreciation granted on that respect. The Assessing Officer, hence, WP(C).No.20825 of 2014 - 2 - assessed the income tat the hands of the petitioner, a charitable society, for the income which was alleged to have been applied for the purposes other than charitable purposes. 3. the first appellate authority, on a prima facie consideration, granted stay of 50% of the demand on condition as noticed above. This Court is not convinced of there being any reason for interference with the discretion exercised by the first appellate authority. However, the instalment granted by the first appellate authority shall start from 11.09.2014. With the above modification, the writ petition shall stand dismissed. The appeal shall be considered untrammelled by the observations made herein. Sd/- K.Vinod Chandran, Judge vku. ( true copy ) "