ANGEL CHRISTIAN CHARITABLE vs. THE DEPUTY DIRECTOR OF

PDF · subscribers
TCA/142/2016HC Madras10 August 2021Bench: Hon`ble Mr Justice T. S. SIVAGNANAM6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the appeals and remanded the matters to the Assessing Officer for fresh consideration. The Court noted a subsequent development: the Commissioner of Income Tax (Exemptions) registered the assessee as a public religious Trust under Section 12AA of the Act with effect from 20.11.2003. This registration, granted after the ITAT's order, was a significant factor. The Court reasoned that in light of this retrospective registration, the assessments for the impugned assessment years (2010-11 and 2011-12) and the assessment orders dated 20.03.2013 and 31.03.2014 needed to be redone. The ITAT's order, the CIT(A)'s order, and the original assessment orders were set aside. The Assessing Officer was directed to redo the assessment, taking into account the Section 12AA registration, after affording an opportunity of personal hearing to the assessee. The substantial question of law was left undecided.

What were the facts?

The assessee, Angel Christian Charitable Foundation India, filed appeals against the orders of the Income Tax Appellate Tribunal (ITAT) for assessment years 2010-11 and 2011-12. The ITAT had confirmed the Commissioner of Income Tax (Appeals) decision, which held that the assessee was not eligible for exemption under Section 11 of the Income Tax Act, 1961. The basis for this denial was that the assessee, while admitting to being a religious organization undertaking religious activities, had not incurred expenses for charitable activities. Crucially, at the time of the ITAT's decision, the assessee did not possess registration under Section 12AA of the Act. However, during the pendency of these appeals before the High Court, the Commissioner of Income Tax (Exemptions) registered the assessee as a public religious Trust under Section 12AA with effect from 20.11.2003.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in holding that the appellant is not eligible for exemption under Section 11 of the Income Tax Act, 1961? Assessee's Contention: The judgment does not explicitly record arguments from the assessee's counsel regarding this issue. However, the subsequent allowance of the appeal and remand implies that the assessee would have argued for eligibility for exemption. Revenue's Contention: The judgment does not explicitly record arguments from the revenue's counsel. However, the revenue's position, as upheld by the lower authorities and implicitly before the High Court, was that the assessee was not eligible for exemption under Section 11 due to lack of charitable activity expenses and absence of 12AA registration.

Which sections of the Income-tax Act were involved?

Section 11,Section 260A,Section 12AA

AI-generated summary — verify with the full judgment below

T.C.A.Nos.142 & 149 of 2016 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 10.08.2021 CORAM The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mr.Justice SATHI KUMAR SUKUMARA KURUP T.C.A.Nos.142 & 149 of 2016 Angel Christian Charitable Foundation India, New No.36, 'H' Block, 13th Main Road, Anna Nagar, Chennai-600 040.

.. Appellant in both Appeals

-vs- The Deputy Director of Income Tax (Exemptions)-III, Aayakar Bhawan Annexe, No.121, Mahatma Gandhi Road, Chennai-600 034. .. Respondent in both Appeals Appeals under Section 260A of the Income Tax Act, 1961 against the order dated 31.07.2015 made in I.T.A.Nos.750 and 751/Mds/2015 on the file of the Income Tax Appellate Tribunal 'A' Bench, Chennai for the assessment years 2010-11 and 2011-12 respectively. For Appellant : Mr.Mr.G.Baskar (In both Appeals) _________ Page 1 of 6 https://www.mhc.tn.gov.in/judis/ T.C.A.Nos.142 & 149 of 2016 For Respondent : Mr.J.Narayanaswamy (In both Appeals) Senior Standing Counsel ****** COMMON JUDGMENT (Delivered by T.S.Sivagnanam, J.) These tax case appeals, by the appellant/assessee, filed under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), are directed against the order dated 31.07.2015, made in I.T.A.Nos.750 and 751/Mds/2015 on the file of the Income Tax Appellate Tribunal 'A' Bench, Chennai for the assessment years 2010-11 and 2011-12 respectively. 2.The appeals were admitted on 02.03.2016, on the following substantial question of law:- “Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in holding that the appellant is not eligible for exemption under Section 11 of the Income Tax act, 1961?” _________ Page 2 of 6 https://www.mhc.tn.gov.in/judis/ T.C.A.Nos.142 & 149 of 2016 3.Heard Mr.G.Baskar, learned counsel for the appellant and Mr.J.Narayanaswamy, learned Senior Standing Counsel for the respondent. 4.The Tribunal, by the impugned order, confirmed the order passed by the Commissioner of Income Tax (Appeals) – VII, Chennai (for brevity “the CIT(A)”) dated 31.12.2014, which were the appeals filed by the assessee, which were dismissed holding that the assessee is not entitled to the benefit of Section 11 of the Act. The Tribunal affirmed such order by observing that the assessee had admitted that they are a religious organization and has undertaken religious pilgrimage and other activities relating to religious and they have not incurred any expenses for the purpose of charitable activity and accordingly, the appeals were dismissed. Challenging the correctness, the tax case appeals have been filed which were admitted on 02.03.2016, to decide the aforementioned substantial question of law. 5.We need not labour much to resolve the controversy raised in these tax case appeals on account of subsequently development, which had taken place during the pendency of these appeals. 6.The Commissioner of Income Tax (Exemptions), Chennai by order _________ Page 3 of 6 https://www.mhc.tn.gov.in/judis/ T.C.A.Nos.142 & 149 of 2016 dated 22.02.2016 had registered the assessee-Trust as a public religious Trust under Section 12AA of the Act with effect from 20.11.2003. In fact, both the CIT(A) as well as the Tribunal in the earlier round had also noted that the appellant Trust did not have the benefit of 12AA registration. However, by order dated 22.02.2016, they have been recognised as a public religious Trust and taking note of the said registration, assessments for the assessment years 2013-14 to 2016-17 have been completed vide assessment orders dated 08.03.2016, 25.11.2016, 01.09.2017 and 09.11.2018 respectively. 7.In the light of the registration having been granted in favour of the appellant/assessee with effect from 20.11.2003, the date on which the assessee-Trust was registered, the assessments, which are impugned before us, have to be necessarily redone. 8.For the above reasons, the tax case appeals are allowed, the orders passed by the Tribunal, the CIT(A) as well as the assessment orders dated 20.03.2013 and 31.03.2014, are set aside and the matters are remanded to _________ Page 4 of 6 https://www.mhc.tn.gov.in/judis/ T.C.A.Nos.142 & 149 of 2016 the Assessing Officer for fresh consideration, who shall redo the assessment, taking note of the registration granted under Section 12AA vide order dated 22.02.2016, with effect from 20.11.2003, after affording an opportunity of personal hearing to the Authorized Representative of the assessee. Consequently, the substantial question of law is left open. No costs. (T.S.S., J.) (S.S.K., J.) 10.08.2021 Index: Yes/ No Speaking Order : Yes/ No abr To 1.The Deputy Director of Income Tax (Exemptions)-III, Aayakar Bhawan Annexe, No.121, Mahatma Gandhi Road, Chennai-600 034. 2.The Income Tax Appellate Tribunal 'A' Bench, Chennai. T.S.Sivagnanam, J. and _________ Page 5 of 6 https://www.mhc.tn.gov.in/judis/ T.C.A.Nos.142 & 149 of 2016 Sathi Kumar Sukumara Kurup, J. (abr) T.C.A.Nos.142 & 149 of 2016 10.08.2021

_________ Page 6 of 6 https://www.mhc.tn.gov.in/judis/

More judgments on Section 11

All 7,190 judgments and leading authorities on Section 11 →

Recent GST High Court judgments

Search GST case law →