HERALDS OF GOOD NEWS,THANGELLAMUDI vs. INCOME TAX OFFICER (EXEMPTIONS), VIJAYAWADA

This appeal is filed by the assessee against order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal centre, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1066458939(1) dated 05.07.2024 for the

Brief facts of the case are, assessee a Trust filed its return of income for the A.Y. 2013-14 on 27.10.2013 declaring total income at Nil. After processing the return summarily under section 143(1) of the Act, the case was subsequently selected for scrutiny under CASS and statutory notices under section 143(2) and 142(1) of the Act were issued and served on the assessee. In response to the notices, assessee’s representative appeared and furnished the details called for. It was also submitted that the assessee is having registration under section 12A of the Act. It was observed that the assessee has purchased two properties for a consideration of Rs.77,000/- and Rs. 1,92,000/- as per the Registered sale deeds. However, the assessee claimed to have paid an amount of Rs.29,80,000/- over and above the market value agreed upon and declared to the registration authorities. Ld. Assessing Officer (in short “Ld. AO") in the absence of any justification of the amounts paid over and above the registration value amount of Rs.29,80,000/- issued a show-cause notice to the assessee to show-cause why the amount should not be treated as not spent towards charitable purposes. Further, he also observed that the trust has incurred foreign travel expenditure towards Air Tickets Amounting to Rs.5,11,910/-and show-caused the assessee to explain why it should not be excluded from the exemption under section 11 of the Act as having not spent towards charitable purpose.

On being aggrieved with the above additions, the assessee filed appeal before Ld. CIT(A). Assessee made similar submissions before Ld. CIT(A) as submitted before Ld. AO. The Ld. CIT(A) rejected the contentions of the assessee-representative and dismissed the appeal of the assessee.

For these and other reasons that may be urged at the time of hearing, the appellant prays that the orders passed u/s 250 of the Income Tax Act be set aside and the additions made by the Assessing Officer be deleted.”

Ground Nos. 1 and 5 are general in nature and needs no adjudication.

Ground Nos. 2 & 3 relates to addition of Rs.29,80,000/-. On this issue, Ld.Authorized Representative (hereinafter in short “Ld.AR”) submitted that the assessee has paid an amount of Rs.29,80,000/- over and above the document values based on the advice of the Sub-registrar stating that if the document is considered for registration, he would have to apply the same card rate for other transactions. He also further submitted that an affidavit from the seller also enclosed stating that the amount has been received towards sale of property. Further, he also submitted that confirmations letters from the sellers and the bank statements of the sellers are also enclosed in Paper Book page No. 15-17. He therefore pleaded that the addition may be deleted.

Per contra, Ld. Departmental Representative (hereinafter in short “Ld.DR”) relied on the orders of the revenue authorities.

Further, on the Ground No. 4 wherein the Ld. CIT(A) upheld the disallowance of Rs.5,11,910/-. Ld.AR submitted that these expenses are incurred to attend educational seminars to provide education and scientific basis to the students. However, the Ld. AO disallowed a sum of Rs.5,11,910/- stating that it is not charitable in nature by denying exemption under section 11 of the Act. Ld.AR further submitted that it was incurred for deputing the priests for pursing advanced Post Graduation courses and other research works and is incurred in the course of providing their higher education. He therefore pleaded

Per contra, Ld. DR relied on the orders of the revenue authorities.

We have heard both the sides and perused the material available on the record. It was the contention of the assessee that being a missionary organization it has education seminars at different places for providing education to the students. Each seminary is affiliated to some recognized university. After the completion of the period of their study in seminary these students would be ordained as religious priests and they would be associated with their respective congregations for pastoral and philanthropic activities. Sometimes these priests were been deputed abroad by the assessee for advanced Post Graduation studies and other research works and hence the plea of the assessee that this expenditure incurred in the course of providing higher education which is the assessee’s objects of working towards cause of educations and hence they are charitable in nature and deserves to be allowed. However, it was not established by the assessee even before us, the relevance of sending the priests abroad for higher educations. Further, it was not also proved with cogent evidences the details of expenditure incurred towards foreign travel by the assessee. In these circumstances, there is no merit in the argument of the Ld.AR and hence we are not inclined to interfere in the order of the Ld. CIT(A)

In the result, appeal of the assessee is partly allowed.