YOUNG WOMENS CHRISTIAN ASSOCIATION,THIRUVANANTHAPURAM V. OFFICE OF THE INCOME TAX OFFICER, EXPEMTION WARD, TVM, THIRUVANATHAPURAM

ITA 274/COCH/2025

AI Insights

The case involves the Young Womens Christian Association, a charitable society, which appealed against the order of the Commissioner of Income-tax (Appeals) for the assessment year 2016-2017. The society, registered under the Travancore Kochi Literary Scientific and Charitable Societies Registration Act, 1955 and under section 12AA of the Income-tax Act, 1961, filed a return claiming exemption under section 11 of the Act. However, the Income-tax Officer (Exemption) Ward, Trivandrum, assessed the income at Rs.27,53,990, treating income from running a hostel as business income and taxing a shortfall in application of income. The CIT(A) dismissed the appeal without adequately addressing the grounds of appeal, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314223 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Laws Referred To: Income-tax Act, 1961, Travancore Kochi Literary Scientific and Charitable Societies Registration Act, 1955
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL; SENIOR
• Keywords: Business income; Opportunity of being heard

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member ITA No.274/Coch/2025 : Asst.Year 2016-20217 Young Womens Christian Association, YMCA Building M.G.Road, Spencer Junction Thiruvananthapuram – 695 001. PAN : AAATY0504F. v. The Income Tax Officer (Exemption) Ward Trivandrum. (Appellant) (Respondent) Appellant by : --- None --- Respondent by : Smt.Leena Lal, Senior AR Date of Hearing : 05.05.2025 Date of Pronouncement : 08.05.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre / Commissioner of Income-tax (Appeals) [hereinafter “the CIT(A)”] dated 14.02.2025 for the assessment year 2016-2017. 2. Briefly, the facts of the case are that the appellant is a charitable society, duly registered under the Travancore Kochi Literary Scientific and Charitable Societies Registration Act, 1955 on 16.01.1957. The appellant was also registered under the provisions of sec.12AA of the Income-tax Act, 1961 (hereinafter “the Act”). The return of income for the assessment year 2016-2017 was filed on 16th August, 2016 disclosing Nil income after claiming exemption u/s.11 of the Act. Against the said return of income, the assessment was completed by the Income-tax Officer (Exemption) Ward, Trivandrum (hereinafter “the ITA No.274/Coch/2025. Young Womens Christian Association. 2 AO”) vide order dated 30.12.2018 passed u/s.143(3) of the Act at a total income of Rs.27,53,990. While doing so, the income derived from running of hostel was treated by the AO as business income invoking the proviso of sec.2(15) of the Act. Further, while computing the income from the charitable activity, the AO brought to tax the shortfall in application of income amounting to Rs.27,53,986. 3. Being aggrieved by the above assessment order, an appeal was filed before the CIT(A), who vide the impugned order, dismissed the appeal. 4. Being aggrieved, the appellant is in appeal before the Tribunal in the present appeal. When the appeal was called upon, none appeared on behalf of the appellant, despite due service of notice. Therefore, I proceed to dispose of the appeal on merits after hearing the learned Senior DR. 7. I heard the learned Senior DR and perused the material available on record. From the order of the CIT(A), it would be clear that the CIT(A) simply dismissed the appeal after making a reference to the assessment order and the written submissions filed before him. Further, the CIT(A) had not disposed of each grounds of appeal by passing a speaking order. Thus, the order passed by the CIT(A) does not show any application of mind. Accordingly, I am of the opinion that the matter requires remand to the file of the CIT(A) for de novo disposal of the appeal on merits, in accordance with law, after affording a reasonable opportunity of being heard to the assessee. ITA No.274/Coch/2025. Young Womens Christian Association. 3 8. In the result, the appeal filed by the assessee stands partly allowed. Order pronounced on this 8th day of May, 2025. Sd/- (Inturi Rama Rao) ACCOUNTANT MEMBER Cochin; Dated : 08th May, 2025. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "