TOUFEEQ CHARITABLE TRUST,MALAPPURAM V. ITO, EXEMPTION, THRISSUR

ITA 818/COCH/2025

AI Insights

The case involves the Toufeeq Charitable Trust, which is a trust registered under section 12A of the Income Tax Act, 1961, aimed at running educational institutions for charity. For the Assessment Year 2015-16, the trust filed a return claiming nil income and sought exemption under section 11 of the Act. However, the Income Tax Officer (Exemption), Thrissur, assessed the trust's income at Rs. 6,42,219, disallowing various expenditures claimed. The CIT(A) upheld these disallowances, leading to the trust's appeal to the ITAT. The ITAT criticized the CIT(A)'s reliance on the Supreme Court's decision in Goetze (India) Ltd. v. CIT, which was deemed inapplicable, and noted the absence of cogent reasons for the disallowances.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790195 (ITAT-COCHIN)
• Duration Of Justice: 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 31-10-2025
• Other Referred Cases: Goetze (India) Ltd. v. CIT [2006] 284 ITR 323
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEETHU S.
• Keywords: Revenue expenditure; Capital expenditure; Principle of natural justice; Charitable institution
• Section: 143(3); 11; 12A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM ITA No. 818/Coch/2025 Assessment Year: 2015-16 Toufeeq Charitable Trust .......... Appellant C-14,139, Thaqua, Andathode, Malappuram [PAN: AAATT6160E] vs. The Income Tax Officer (Exemption), Thrissur .......... Respondent Assessee by: ------- None ------- Revenue by: Ms. Neethu S. Sr. DR Date of Hearing: 27.11.2025 Date of Pronouncement: 28.11.2025 O R D E R This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Agra [CIT(A)] dated 14.08.2025 for Assessment Year (AY) 2015-16. 2. Brief facts of the case are that the appellant is a trust duly registered u/s. 12A of the Income Tax Act, 1961 (the Act). It is founded with the object of running educational institution for charity. The return of income for AY 2015-16 was filed on 14.06.2016 disclosing Nil income after claiming exemption u/s. 11 of the Act. The Against the said return of income, the assessment was completed by the Income Tax Officer (Exemption), Thrissur Printed from counselvise.com 2 ITA No. 818/Coch/2025 Toufeeq Charitable Trust (hereinafter called \"the AO\") vide order date 15.12.2017 passed u/s. 143(3) of the Act at total income of Rs. 6,42,219/-. While doing so, the AO had not allowed the capital expenditure as application of income on the ground that no claim was made in the return of income. Similarly, the AO had not allowed the following items as application of income: - i) Revenue expenditure as per return 1,52,99,147 ii) Capital expenditure as claimed 4,55,460 iii) 15% of statutory exemption u/s. 11 of Rs. 1,95,25,678/- 29,28,852 3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal by holding that the disallowance of capital expenditure of Rs. 25,40,942/- cannot be allowed as no claim was made for exemption in the return of income placing reliance on the decision of the Hon'ble Apex Court in the case of Goetze (India) Ltd. v. CIT [2006] 284 ITR 323. The learned CIT(A) also confirmed the disallowance of other items. 4. Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal. 5. When the appeal was called on nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, I proceed to dispose of the appeal after hearing the learned Sr. DR. Printed from counselvise.com 3 ITA No. 818/Coch/2025 Toufeeq Charitable Trust 6. At the outset, I find that the CIT(A) had passed a very cryptic order without giving reasons as to why he is concurring with the view of the AO. The decision of the Hon'ble Apex Court Goetze (India) Ltd. (supra) has no application on the appellate authority. There are no fetter on the powers of the appellate authority to entertain new claims. Similarly, the CIT(A) had passed a very cryptic order while confirming the other disallowances without giving cogent reasons. Thus, the CIT(A) had passed the order in gross violation of the principles of natural justice. Therefore, the matter is restored to the file the CIT(A) for fresh disposal in accordance with law after affording reasonable opportunity of hearing to the appellant. 7. In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 28th November, 2025. Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 28th November, 2025 n.p. Printed from counselvise.com 4 ITA No. 818/Coch/2025 Toufeeq Charitable Trust 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 Printed from counselvise.com "