S N D P YOGAM KOZHENCHERRY UNION,PATHANAMTHITTA V. ITO, WARD 2, THIRUVALLA

ITA 244/COCH/2025

AI Insights

The case involves SNDP Yogam Kozhencherry Union, a registered charitable trust, which appealed against the orders of the National Faceless Appeal Centre (NFAC), Delhi, for the Assessment Years 2015-16 and 2016-17. The primary issue was the taxability of voluntary contributions received towards a building fund, amounting to Rs. 21,26,524/-, in the absence of registration under section 12AA of the Income Tax Act, 1961. The Income Tax Officer (ITO) had assessed this amount as taxable income, which was upheld by the CIT(A). The Tribunal, after hearing the Senior Departmental Representative, dismissed the appeal, confirming that without section 12AA registration, the income from voluntary contributions is taxable under section 2(24) of the Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312277 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Keywords: Charitable institution
• Section: 147; 148; 11; 12AA; 2

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM ITA Nos. 243 & 244/Coch/2025 Assessment Years: 2015-16 & 2016-17 SNDP Yogam Kozhencherry Union .......... Appellant Kozhencherry, Pathanamthitta 689641 [PAN: AAQAS3285G] vs. The Income Tax Officer, Ward - 2, Thiruvalla .......... Respondent Appellant by: ------- None ------- Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 28.04.2025 Date of Pronouncement: 30.04.2025 O R D E R These appeals filed by the assessee is directed against the orders of the National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 31.12.2024 & 23.12.2024 for Assessment Years (AY) 2015-16 & 2016-17. 2. Since identical issues are involved in these appeals, they are heard together and disposed of by this common order. For the sake of convenience and clarity the facts relevant to the appeal bearing ITA No. 243/Coch/2025 for AY 2015-16 are stated herein. 3. Brief facts of the case are that the appellant is a registered charitable trust. The appellant trust does not enjoy registration u/s. 12AA 2 ITA Nos. 243 & 244/Coch/2025 SNDP Yogam Kozhencherry Union of the Income Tax Act, 1961 (the Act). No regular return of income u/s. 139(1) of the Act was filed by the appellant. Subsequently, based on the information that the appellant trust made cash deposit in specified bank notes (SBN) to the extent of Rs. 17,92,645/-, the AO formed an opinion that income escaped assessment to tax. Accordingly a notice u/s. 148 of the Act was issued to the appellant on 07.09.2019. In response to the notice u/s. 148, the appellant filed return of income on 07.11.2019. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-2, Thiruvalla (hereinafter called \"the AO\") vide order dated 24.09.2021 passed u/s. 147 r.w.s. 144B of the Act at a total income of Rs.17,92,645/-. While doing so, the AO brought to tax a sum of Rs. 21,26,524/- being the amount of donations received towards building fund by holding that in the absence of certificate of registration u/s. 12AA of the Act exemption u/s. 11 cannot be granted. 4. Being aggrieved, an appeal was filed before the CIT(A), contending that the voluntary contributions cannot be brought to tax as they are cap[ital in nature. However, the CIT(A) rejected the contention of the appellant and dismissed the appeal. 5. Being aggrieved, the appellant is in appeal before the Tribunal in the present appeal. 6. When the appeal was called on nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, I proceeded to dispose of the appeal after hearing the learned Sr. DR. 7. Admittedly, the appellant is a charitable trust registered under the Charitable Trust Act. However, the appellant trust does not enjoy 3 ITA Nos. 243 & 244/Coch/2025 SNDP Yogam Kozhencherry Union registration u/s. 12AA of the Act. In the background of these facts the issue that arises for my consideration is whether the voluntary contributions received by the appellant trust towards building fund are liable to tax. Provisions of clause (2a) of sub-section (24) of section 2 defines income to include voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes. Therefore, in the absence of registration u/s. 12AA of the Act, such income does not qualify for exemption u/s. 11 of the Act and is clearly taxable in view of the plain provisions of section 2(24) of the Act. The fact that the voluntary contributions were made towards building fund do not alter this position. I do not find any merit in the grounds of appeal raised by the assessee. 8. In the result, the appeals filed by the assessee stand dismissed. Order pronounced in the open court on 30th April, 2025. Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 30th April, 2025 n.p. 4 ITA Nos. 243 & 244/Coch/2025 SNDP Yogam Kozhencherry Union 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 "