SACRED HEART COLLEGE GOLDEN JUBILEE TRUST,ERNAKULAM vs. THE ITO (EXEMPTION), KOCHI

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ITA 284/COCH/2020Status: DisposedITAT Cochin30 November 2022AY 2015-163 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the AO had verified the details of corpus donations and accepted the assessee's claim. The CIT's observations were considered allegations without supporting evidence, and the revisional jurisdiction under Section 263 was not justified solely on the basis of a different interpretation of the donations.

What were the facts?

The Assessing Officer (AO) accepted the assessee's returned income, including corpus donations. The Commissioner of Income Tax (CIT) initiated revision proceedings, arguing that the corpus donations were actually admission fees and thus revenue receipts, not voluntary. The assessee contended that donations were voluntary, supported by receipts, and used for infrastructure, and that the AO had verified these details.

What were the issues?

Whether the CIT was justified in invoking revisional powers under Section 263 to treat voluntary corpus donations as revenue receipts (admission fees) without sufficient evidence, when the AO had already accepted them after verification.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: HON’BLE SHRI SATBEER SINGH GODARA, J.M & HON’BLE SHRI MANOJ KUMAR AGGARWAL, A.M

आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2015-16 arises out of revisional order passed by learned Commissioner of Income Tax (Exemption), Kochi (CIT) on 27-04-2020 u/s 263 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s.143(3) of the Act on 07-11-2017. 2. The Ld. AR advanced arguments supporting the assessment framed by Ld. AO. The ld. CIT-DR supported the impugned order and 2 - justified the revisional proceedings. Having heard rival submissions, the appeal is disposed-off as under.

3.

The Ld. AO accepted the returned income filed by the assessee. However, Ld. CIT sought revision of the order on the ground that corpus donations of Rs.126.50 Lacs were accepted by Ld. AO without enquiring about real nature of the receipt. The assessee assailed the same on the ground that requisite details were furnished and due enquiries were made by Ld. AO while accepting the claim. However, Ld. CIT held that corpus donation is taken only from those students who are seeking fresh admission. Therefore, the donations were not voluntary in nature and the same was nothing but admission fees to be paid at the time of admission. Therefore, it would be a revenue receipt and not a corpus fund. Accordingly, Ld. AO was directed to examine the nature and character of corpus donations. Aggrieved, the assessee is in further appeal before us.

4.

The Ld. AR has submitted that all the donations are supported by receipts which clearly show that the money was received as corpus fund only on voluntary basis. The donations so received by the assessee have been utilized for building infrastructure for setting up of education facilities. All these aspects have been verified by Ld. AO during regular assessment proceedings. The decision of Hon’ble High Court of Kerala in CIT vs. Choice Foundation (134 Taxmann.com 163) has also been relied upon to support the merits of the case.

5.

Upon perusal of assessee’s reply during regular assessment proceedings, we find that the assessee has furnished details of corpus donation as called for by Ld. AO. The Ld. AO, after going through the same, accepted the claim of the assessee and chose not to make any 3 - addition on this account. The observations made by Ld. CIT are more in the nature of allegation without any supporting evidence on record. Once the claim has been accepted by Ld. AO, the same view could be disturbed only if the order is erroneous and prejudicial to the revenue which is not the case here. Simply because Ld. CIT viewed the donation as admission fees, without there being any concrete evidence on record, would not justify invocation of revisional jurisdiction u/s 263. Therefore, the impugned order could not be sustained in law. We order so.

6.

The appeal stand allowed. Order pronounced on 30th November, 2022.

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