MESSRS. SOCIAL ACTION FOR EMPOWERMENT AND DEVELOPMENT V. COMMISSIONER OF INCOME TAX

ITA/155/2014

AI Insights

The case involves M/s Social Action for Empowerment and Development of Minorities, which appealed against the orders of the Income Tax Appellate Tribunal that denied them exemption from tax on certain receipts for the assessment years 2006-2007 and 2007-2008. The primary issue was the lack of registration under Section 12AA of the Income Tax Act at the relevant times. Although the registration was granted later, it was effective only from the assessment year 2008-2009 onwards. The tribunal's decision was based on the fact that the registration did not apply retrospectively, and thus, the assessee was not entitled to the tax exemptions for the earlier years.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 755536 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 10-06-2016
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: V L SHENOY; L JAYAWANTH
• Keywords: Donation receipts; Exemption from tax; Income tax appeal; Registration under section 12AA; Loan Receipts
• Section: 12AA; 12A

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU FRIDAY , THE 10TH DAY OF JUNE 2016/20TH JYAISHTA, 1938 I.T.A.No.155 of 2014 AGAINST THE ORDER IN I.T.A.No.49/2012 of I.T.A.TRIBUNAL, COCHIN BENCH, DATED 27.9.2013 APPELLANTS/PETITIONER: M/S SOCIAL ACTION FOR EMPOWERMENT AND DEVELOPMENT OF MINORITIES, P.B.NO.830, ROSY APARTMENTS, NEAR SPAN HOTEL, JAIL ROAD, PUTHIYARA P.O., KOZHIKODE-673 004. REPRESENTED BY ITS PRESIDENT, DOCTOR KUNH AHAMMED KUTTY. BY ADVS.SRI.V.L.SHENOY SRI.L.JAYAWANTH RESPONDENTS: COMMISSIONER OF INCOME TAX, CALICUT, OFFICE OF THE COMMISSIONER OF INCOME TAX, AAAYAKAR BHAWAN, NORTH BLOCK, KOZHIKODE-673 001. R BY SRI.JOSE JOSEPH, SC FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 10-06-2016, ALONG WITH I.T.A.NO.169/2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: I.T.A.No.155 of 2014 APPENDIX PETITIONER'S ANNEXURE: ANNEXURE A1: COPY OF ASSESSMENT ORDER DATED 30.12.2010 PASSED BY INCOME TAX OFFICER WARD 1(2), KOZHIKODE. ANNEXURE A2: COPY OF THE ORDER DATED 18.11.2011 OF THE COMMISSIONER OF INCOME TAX (APPEALS) I, KOZHIKODE. ANNEXURE A3: LIST OF DONORS TOGETHER WITH THEIR NAME AND ADDRESS FOR ASSESSMENT YEAR 2006-2007. ANNEXURE A4: CERTIFIED COPY OF THE ORDER DATED 27-9-2013 OF INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN. ANNEXURE A5: COPY OF JUDGMENT OF HON'BLE HIGH COURT IN W.P. (C)27681/13 DATED 11.11.2013. ANNEXURE A6: COPY OF THE ORDER REFUSING TO GRANT REGISTRATION UNDER SECTION 12A OF IT ACT, 1961 BY CIT, CALICUT DATED 8.1.2014. ANNEXURE A7: COPY OF THE APPEAL PREFERRED BEFORE THE INCOME TAX APPELLATE TRIBUNAL, COCHIN DATED 31.1.2014. ANNEXURE A8: TRUE COPY OF ORDER DATED 8.2.2016 IN CIT (E)/ CHN/12A/G.E.NO.03/ITAT/14-15 PASSED BY COMMISSIONER OF INCOME TAX (EXEMPTIONS) KOCHI. // TRUE COPY // P.A. TO JUDGE ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - I.T.A.No.155 & 169 of 2014 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 10th day of June, 2016 JUDGMENT Antony Dominic, J. The assessee has filed these appeals calling in question the orders passed by the Income Tax Appellate Tribunal in I.T.A.Nos.49/12 and 50/12 concerning the assessment years 2006- 2007 and 2007-2008. 2. Reading of the order passed by the Appellate Tribunal would show that the primary reason for deciding the claim of the assessee for exemption from assessment of tax on donation receipts and loan receipts was on the basis that the assessee did not have registration under Section 12AA of the Income Tax Act. 3. In these appeals, the main contention raised by the counsel for the appellant was that the assessee had applied for registration and that on rejection of its application for registration, they had appealed to the Tribunal and the Tribunal had remitted the matter I.T.A.No.155 & 169 of 2014 : 2 : to the Commissioner for fresh consideration. According to the assessee, since the matter was pending before the Commissioner, the Tribunal should not have disposed of the matter in the manner as it have done now. 4. During the pendency of these appeals, the Commissioner has passed an order, dated 8.2.2016, granting registration to the assessee under Section 12AA of the Act. Now relying on the said order, counsel contends that the matter needs to be remitted back to the Tribunal for fresh consideration. 5. We heard the counsel for the appellant and the learned Standing Counsel appearing for the Revenue. 6. It is true that by order dated 8.2.2016, registration under Section 12AA of the Act has been granted to the assessee. A copy of the order dated 8.2.2016 has been placed on record as Annexure A8. Reading of Annexure A8 disclose that the registration granted I.T.A.No.155 & 169 of 2014 : 3 : to the assessee will take effect only from the assessment year 2008- 2009 and, therefore, the said order cannot be relied on to resist the orders impugned in these appeals, which are passed for the assessment years 2006-2007 and 2007-2008. 7. The counsel for the appellant contended that still the issue whether the order in question has retrospective effect or not is a matter to be considered by the Tribunal. This contention cannot be accepted in the light of Sub Section (2) to Section 12A of the Income Tax Act, 1961 which provide that where an application has been made on or after the 1st June 2007, the provisions of Sections 11 and 12 of the Act shall apply in relation to the Income of such trust or institution from the assessment year immediately following the financial year in which such application is made. This, therefore, shows that the application for registration under Section 12AA having been made by the assessee only in February I.T.A.No.155 & 169 of 2014 : 4 : 2009, the benefit of the order can enure to the assessee only for the assessment year 2008-2009. Therefore, the order cannot come to the rescue of the assessee for the assessment years 2006-2007 and 2007-2008. In such circumstances, we are unable to find any illegality in the order passed by the Tribunal. Appeals fail and are accordingly dismissed. Sd/- ANTONY DOMINIC JUDGE Sd/- DAMA SESHADRI NAIDU JUDGE jes "