ACIT EXEMPTIONS, COIMBATORE vs. M/S THE INSTITUTE OF FRANCISCAN MISSIONARIES OF MARY SOCIETY, NILGIRIS

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -2, Coimbatore, dated 15.02.2018 and pertains to assessment year 2014-15.

No one appeared for the assessee inspite of service of notice by RPAD. The Registry has placed on record the postal acknowledgement as proof of service of notice. Therefore, we heard the Ld. Departmental Representative and proceeded to dispose the appeal on merit.

Ms. R. Anitha, the Ld. Departmental Representative, submitted that the assessee claims that excess funds were applied for charitable activity which is to be brought forward and set off in the subsequent year. However, according to the Ld. D.R., there was no discussion about the source of excess money, how the assessee generated funds over and above the income and how it was applied are not available in the assessment order or in the CIT(Appeals) order. According to the Ld. D.R., the CIT(Appeals) has simply referred the judgment of Madras High Court and allowed the claim of the assessee.

We heard the Ld. D.R. and perused the relevant material available on record. As rightly submitted by the Ld. D.R., it is not known how the excess funds were generated by the assessee over and above the income and how the funds were applied for charitable activity. When the excess funds were applied for charitable activity over and above the income of the assessee-trust itself, these details were required for ascertaining whether, in fact, the assessee applied the funds for charitable activity or not. As rightly submitted by the Ld. D.R., these details were not brought on record either by the Assessing Officer or by the Commissioner of Income Tax (Appeals). Therefore, the matter needs to be re- examined by the Assessing Officer. Accordingly, orders of both the authorities below are set aside and the entire issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall re- examine the matter and bring on record the source of income of the assessee, quantum of income and source for excess income, which was said to be generated by the assessee and how all such income were applied by the assessee to the charitable activity and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.