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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI PRAKASH CHAND YADAV, JM
Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 27.12.2023 for Assessment Year (AY) 20016-17.
SA No.148/Coch/2024 Little Servants of Divine Providence Charitable Society 2. Brief facts of the case are that the assessee is a society registered under the Society Registration Act. It is also registered u/s. 12A of the Income Tax Act, 1961 (the Act) .The return of income for AY 2016-17 was filed on 16.10.2016 disclosing total income of Rs. Nil. Against the said return of income assessment was completed by the ACIT (Exemption Circle), Thiruvananthapuram (hearing after “the AO”) vide order dated 17.02.2018 passed u/s. 143(3) of the Act at total income of Rs. 58,54,807/-. While doing so the AO has brought to tax the excess income which was not applied for charitable activities.
Being aggrieved, an appeal was filed before the CIT(A) contending that for the purpose of computing total income, the amount of corpus donations cannot be considered as income of the assessee society. However, the CIT(A) confirmed the action of the AO without adverting to the submissions of the assessee society. The CIT(A) merely confirmed the action of the AO.
Being aggri4eved, the assessee is in appeal before us in the present appeal.
After hearing the rival submissions and pursuing the material on record, we are of the considered opinion that the matter requires remission to the file of the AO with a direction to verify, whether the corpus donations were treated as income. It is the settled position of law that the corpus donations do not form part of income. Therefore, if it is found on due verification that the corpus donations are treated as income, the same may be excluded by the AO for the purpose of computing the quantum of income applied for charitable purposes.
SA No.148/Coch/2024 Little Servants of Divine Providence Charitable Society 6. Since the quantum appeal of the assessee is disposed of, the stay application becomes infructuous, hence dismissed.
In the result, the appeal filed by the assessee is partly allowed and the stay application is dismissed.