UDAYA PROVINCIAL,THRISSUR vs. ACIT(EXEMPTION), KOCHI

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ITA 675/COCH/2024Status: DisposedITAT Cochin22 January 2025AY 2017-18Bench: SHRI INTURI RAMA RAO (Accountant Member)3 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, considering the interest of justice, decided to restore the matter to the file of the CIT(A) for de novo adjudication. This allows the assessee a fresh opportunity of hearing, and all contentions raised by the assessee are to be kept open before the AO.

What were the facts?

The assessee, a trust registered under Section 12A, filed a Nil income return for AY 2017-18 claiming exemption under Section 11. The AO assessed income by treating foreign contributions of Rs. 13,77,682/- as revenue income and denied Section 11 exemption citing a violation of Section 13(1)(c). The CIT(A) allowed Section 11 exemption but confirmed the addition of foreign contribution by treating it as voluntary contribution without specific purpose.

What were the issues?

Whether foreign contributions received by the trust constitute corpus or voluntary contributions and consequently, whether they are taxable as revenue income, thereby affecting the exemption under Section 11 of the Income Tax Act. Also, whether the CIT(A) erred in confirming the addition without sufficient consideration of evidence.

Which sections of the Income-tax Act were involved?

Section 12A,Section 11,Section 143(3),Section 13(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH

Before: SHRI INTURI RAMA RAO, AM

For Appellant: Ms. Niveditha Kammath, Advocate
For Respondent: Smt. Leena Lal, Sr. D.R
Hearing: 17.01.2025Pronounced: 22.01.2025

O R D E R This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-9, Mumbai [CIT(A)] dated 21.05.2024 for Assessment Year (AY) 2017-18.

2.

Brief facts of the case are that the assessee is a trust duly registered u/s. 12A of the Income Tax Act, 1961 (the Act). The return of income for AY 2017-18 was filed on 28.08.2017 declaring Nil income after claiming exemption u/s. 11 of the Act.

3.

Against the said return of income, the assessment was completed by the ACIT (Exemption) (hereinafter called "the AO")

Udaya Provincial House vide order dated 12.12.2019 passed u/s. 143(3) of the Act at a total income of Rs. 21,48,615/-. While doing so, the AO brought to tax a sum of Rs. 13,77,682/- being the amount of foreign contribution treating as non-corpus donation holding to be revenue income. The AO also denied exemption u/s. 11 of the Act on the ground that the appellant violated the condition of section 13(1)(c) of the Act.

4.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order while allowing the exemption u/s. 11 of the Act, confirmed the action of the AO making addition of Rs. 13,77,682/- by holding that foreign contribution of Rs. 13,77,682/- should be treated as voluntary contribution in the absence of evidence that the contributions were made with specific purpose which shall form part of the corpus of the trust and institution.

5.

Being aggrieved, the assessee in appeal before me in the present appeal.

6.

It is submitted that the CIT(A), without considering the evidence, merely confirmed the action of the AO that the foreign contributions are voluntary contributions and, therefore, it is prayed that the matter may be remanded back to the file of the CIT(A) for de novo adjudication.

7.

On the other hand, the learned Sr. DR raised objection for remand of the matter to the CIT(A) for de novo disposal.

Udaya Provincial House 8. Having heard the rival submissions, I am of the considered opinion that in the interest of justice the matter should be restored to the file of the CIT(A) for de novo disposal in accordance with law after affording opportunity of hearing to the assessee. All the contentions raised by the assessee are kept open before the AO.

9.

In the result, the appeal filed by the assessee stands partly allowed.

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