M/S. PROVINCIAL HOUSE SISTERS OF CHARITY,MANGALORE vs. THE ASSISTANT COMMISSIONER OF INCOME TAX (EXEMPTIONS), CIRCLE - 1, MANGALORE

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ITA 1038/BANG/2017Status: DisposedITAT Bangalore25 January 20192 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the additional ground of appeal raised by the assessee concerning the treatment of fixed deposits as application of income. The assessee withdrew this additional ground during the hearing.

What were the facts?

The assessee, a charitable trust, claimed fixed deposits of Rs. 1,04,20,489/- as accumulation for application of income under Section 11(2) of the Income Tax Act. The CIT(A) did not treat these deposits as such accumulation.

What were the issues?

Whether fixed deposits can be treated as accumulation for application of income under Section 11(2) and as application of income under Section 11(1)(a) for a charitable trust.

Which sections of the Income-tax Act were involved?

Section 11(2),Section 11(1)(a),Section 11(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, BENGALURU

Before: SHRI A.K. GARODIA & SHRI PAVAN KUMAR GADALE

For Appellant: Shri Gurunathan, V.K., Advocate
For Respondent: Shri Vijay Kumar, M., Addl.CIT(DR)
Hearing: 01/01/2019Pronounced: 25/01/2019

The assessee has filed the appeal against the order of the CIT(A), Mangalore, passed in dated 13/03/2017 for the assessment year 2012-13.

2.

The assessee raised the grounds of appeal which are as under: Page 2 of 7 1. “The CIT (Appeals) erred in not treating the fixed deposits amounting to Rs.1,04,20,489/- kept as deposit in State Bank of India as accumulation for application of income as provided under Section 11(2) of the Act though the said amounts of fixed deposits were claimed as accumulation for application of income in the return of income filed on 30.09.2012 under Section I39(4A) of the Act.

2. The CIT (Appeals) erred in not appreciating that the notice of accumulation for application of income vide the return of income filed formed sufficient compliance with the provisions of Section 11(2)(a) of the Act.

3. The learned CIT (Appeals) erred in not treating the fixed deposits amounting to Rs.1,04,20,489/- kept as deposit in State Bank of India as accumulation for application of income as provided under the provisions of Section 11(2)(b) read with Section 11(5) of the Act, though the said deposits were from the income of the trust for use of the objects of the trust.

4.

For these and such other grounds that may be urged at the time of hearing, the Appellant prays that the appeal may be allowed.”

The assessee also raised additional ground which is as under:

The CIT(Appeals) erred in not treating the investment made in fixed deposits as application of income for the purposes of section 11(1)(a) of the Act, even though the Memorandum of Trust of the Appellant contained clauses providing for such investment in fixed deposits and also the funds from the same were utilized towards the objects of the Appellant Trust.

3.

In the course of hearing, the learned AR of the assessee withdrew the additional ground and made an endorsement in the grounds of appeal. Accordingly, we dismiss the additional ground of appeal.

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