CIT-1, CHANDIGARH vs. SIMLA CATHOLIC DIOCESE SOCIETY

This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against the order dated 26.6.2008 (Annexure A-3) passed by the Income Tax Appellate Tribunal, Chandigarh Bench “B”, Chandigarh (hereinafter referred to as “the Tribunal”) in ITA No. 471/CHANDI/2008, for the assessment year 2002-03, claiming the following substantial questions of law:- i) Whether in the facts and circumstances of the case, the Hon'ble ITAT is right in law in holding that the assessee is entitled for exemption GURBACHAN SINGH 2016.05.23 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh -2- under Section 11(1)(a) of the Income Tax Act, 1961? ii) Whether in the facts and circumstances of the case, the Hon'ble ITAT is right in law in holding that trust means faith and not status in the context of the assessee?

Briefly stated, the facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee filed its return of income for the assessment year 2002-03 on 31.3.2005 declaring the income at 'nil' in the status of charitable trust claiming refund of ` 1,88,003/- on account of Tax Deducted at Source (TDS). Since the return was belated and there being a refund, the assessee applied for condonation of delay in filing the return under Section 119(2) (b) of the Act before the Chief Commissioner of Income Tax, who directed the Assessing Officer to treat the return of the assessee for the assessment year 2002-03 as a valid return and consider its claim for refund as per the Act. The Assessing Officer vide order dated 21.11.2007 (Annexure A-1) treated the assessee as an institution and not a trust and assessed the income of the assessee at ` 73,74,140/- plus agricultural income of ` 3,71,955/- rate purposes while disallowing the exemption under Section 11(1)(a) of the Act. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity “the CIT(A)”]. The CIT(A) vide order dated 27.3.2008 (Annexure A-2) allowed the appeal and held that the assessee was entitled to exemption under Section 11(1)(a) of the Act relying upon the judgment dated 29.1.2008 passed by the Tribunal in the case of the assessee for the assessment year 2003-04. Against the GURBACHAN SINGH 2016.05.23 10:29 I attest to the accuracy and authenticity of this document High Court Chandigarh -3- order, Annexure A-2, the revenue filed an appeal before the Tribunal. The Tribunal vide order dated 26.6.2008 (Annexure A-3) upheld the order of the CIT(A) and dismissed the appeal. Hence, the present appeal by the revenue.