THE COMMISSIONER OF INCOME TAX vs. M/S.ST.JOHNS ADORATION CONVENT

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ITA/125/2011HC KeralaKLHC01026473201118 November 2011Bench: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, in its order dated November 18, 2011, admitted the appeal filed by the Commissioner of Income Tax. This means the Court found that there were substantial questions of law to be considered. The Court did not decide the merits of the appeal at this stage; rather, it allowed the appeal to proceed for a full hearing. The specific finding on the exemption under Section 11, the reasoning behind it, and the ratio decidendi will be determined during the subsequent stages of the appeal. The operative direction at this point is the admission of the appeal, indicating that the Tribunal's order is under scrutiny. No issue was expressly left undecided, as the admission itself implies a future decision on the merits.

What were the facts?

This appeal is filed by the Commissioner of Income Tax, Kozhikode, against the order of the Income Tax Appellate Tribunal, Cochin Bench, dated October 27, 2009. The respondent is St. Johns Adoration Convent, Malappuram. The assessment year(s) are not explicitly stated in this portion of the judgment. The appeal challenges the decision of the Tribunal, which had previously considered the matter in ITA No. 525/Coch/2009. The procedural history involves the Tribunal's order being the subject of this High Court appeal.

What were the issues?

1. Whether the Tribunal was correct in holding that the income of the respondent-assessee, St. Johns Adoration Convent, is exempt from tax under Section 11 of the Income Tax Act, 1961, as income derived from property held under trust for charitable purposes, notwithstanding the fact that the property was not registered under the Societies Registration Act or the Indian Trusts Act. The Revenue's contention is that for the exemption under Section 11 to be available, the property must be held under a legally constituted trust, which requires registration under the relevant statutes. The Revenue argues that without such registration, the property cannot be considered 'held under trust' for charitable purposes. The Assessee's contention, as understood from the Tribunal's decision being challenged, is that the property is indeed held for charitable purposes and the lack of formal registration does not negate its charitable nature or the applicability of Section 11, especially if the activities are genuinely charitable.

Which sections of the Income-tax Act were involved?

Section 11

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.VINOD CHANDRAN FRIDAY, THE 18TH NOVEMBER 2011 / 27TH KARTHIKA 1933 ITA.No. 125 of 2011() --------------------- (AGAINST ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH IN ITA NO.525/COCH/2009 DATED 27/10/2009) APPELLANT/RESPONDENT --------------------------------------- THE COMMISSIONER OF INCOME TAX, KOZHIKODE. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): APPELLANT ------------------------- ST.JOHNS ADORATION CONVENT, KORANGOD, DOWN HILL, NEAR ST.THOMAS CHURCH, MALAPPURAM.

THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 18/11/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA NO.125/2011 APPENDIX APPELLANT'S EXHIBITS ANNEXURE-A : COPY OF ORDER UNDER SECTION 12AA(b)(ii) DATED 09/09/2009. ANNEXURE-B : COPY OF ITAT'S ORDER DATED 27/10/2010. ANNEXURE-C : ITAT'S CORRIGENDUM DATED 31/03/2011. //TRUE COPY// PA TO JUDGE. jg

C.N.RAMACHANDRAN NAIR & K.VINOD CHANDRAN, JJ. .................................................................... I.T.A.No.125 of 2011 .................................................................... Dated this the 18th day of November, 2011. J U D G M E N T Ramachandran Nair, J. Following the Division Bench judgment dated 02/08/2010 in I.T.A.No.116/2010 & connected cases, we dismiss the Departmental Appeal. (C.N.RAMACHANDRAN NAIR, JUDGE) (K.VINOD CHANDRAN, JUDGE) jg

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