LITTLE SERVANTS OF DIVINE PROVIDENCE CHARITABLE SOCIETY,PATHANAMTHITTA vs. ACIT, EXEMPTION CIRCLE, THIRUVANANTHAPURAM

PDF · subscribers
ITA 129/COCH/2024Status: DisposedITAT Cochin29 November 2024AY 2016-17Bench: SHRI INTURI RAMA RAO (Accountant Member), SHRI PRAKASH CHAND YADAV, JM & SA No. 148/Coch/2024 Assessment Year: 2016-17 Little Servants of Divine Providence Charitable Society House of Providenced, Kunnamatham Pathanamthitta 689581 [PAN: AAATL2831J] .......... Appellant Vs. ACIT, Exemption Circle Aayakar Bhavan, Kowdiar, P.O. .......... Respondent Thiruvananthapuram 695003 Appellant by: Shri Paulson K.P., CA Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 20.11.2024 Date of Pronounc3 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that corpus donations do not form part of income. The matter was remitted to the AO to verify if corpus donations were treated as income and exclude them if so.

What were the facts?

The assessee, a charitable society registered under Section 12A, filed a return of nil income. The AO assessed total income at Rs. 58,54,807/-, including excess income not applied for charitable activities. The CIT(A) confirmed the AO's action.

What were the issues?

Whether corpus donations should be treated as income for the purpose of computing total income and income applied for charitable purposes.

Which sections of the Income-tax Act were involved?

Section 12A,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH

Before: SHRI INTURI RAMA RAO, AM & SHRI PRAKASH CHAND YADAV, JM

For Appellant: Shri Paulson K.P., CA
For Respondent: Smt. Leena Lal, Sr. D.R
Hearing: 20.11.2024Pronounced: 29.11.2024

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.

3.

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.

4.

Being aggri4eved, the assessee is in appeal before us in the present appeal.

5.

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.

7.

In the result, the appeal filed by the assessee is partly allowed and the stay application is dismissed.

More judgments on Section 12A

All 6,064 judgments and leading authorities on Section 12A →

Recent GST High Court judgments

Search GST case law →