Hebrom Ministry, Kandhamala v. ITO,

ITA 118/CTK/2011 | 2006-2007
Pronouncement Date: 14-03-2011

Appeal Details

RSA Number 11822114 RSA 2011
Assessee PAN AAATH6020K
Bench Cuttack
Appeal Number ITA 118/CTK/2011
Duration Of Justice 15 day(s)
Appellant Hebrom Ministry, Kandhamala
Respondent ITO,
Appeal Type Income Tax Appeal
Pronouncement Date 14-03-2011
Appeal Filed By Assessee
Bench Allotted SMC
Assessment Year 2006-2007
Appeal Filed On 28-02-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (SMC) CUTTACK BENCH CUTTACK ( ) BEFORE . . HONBLE SHRI K.K.GUPTA ACCOUNTANT MEMBER. / ITA NO. 118/CTK/2011 / ASSESSMENT YEAR 2006 - 07 HEBRON MINISTRY AT. NEAR POLICE STATION TAKABALI DIST.KANDHAMAL PAN:AAATH 6020 K - - - VERSUS - INCOME - TAX OFFICER PHULBANI WARD PHULBANI ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELL ANT : / SHRI J.M.PATTNAIK AR / FOR THE RESPONDENT: / SHRI J.KHANRA DR / ORDER (SMC) . . SHRI K.K.GUPTA ACCOUNTANT MEMBER . THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DT.7.12.2010 OF THE COMM ISSIONER OF INCOME - TAX (APPEALS) ON THE ASSESSMENT MADE U/S.143(3)/147 OF THE INCOME - TAX ACT 1961 BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2006 - 07. 2. THE ASSESSEE IS A NGO REGISTERED UND ER INDIAN TRUST ACT ON 16.10.200 0. THE TRUST RECEIVES DONA TION CONTRIBUTION AND INCOME FROM VARIOUS ACTIVITIES AND APPLIES THE FUND FOR PROMOTING OBJECTS OF THE TRUST. IT FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION CLAIMING THE EXCESS OF INCOME OVER THE EXPENDITURE TO THE EXTENT OF 7 678 EXEMPT U/S.11 OF THE ACT. THE CIT BHUBANESWAR REJECTED THE APPLICATION OF THE ASSESSEE TRUST SEEKING REGISTRATION U/S.12AA. T HE ASSESSING OFFICER ISSUED NOTICE U/S.148 OF THE ACT AND AFTER HEARING THE ASSESSEE TRUST HELD THE ENTIRE AMOUNT OF RECEI PTS OF 4 94 562 RECEIVED BY THE ASSESSEE TRUST AS DONATION CONTRIBUTION INCOME AS TAXABLE FROM VARIOUS OTHER ACTIVITIES IN ABSENCE OF REGISTRATION BEING GRANTED U/S.12AA. IN APPEAL BEFORE THE LEARNED CIT(A) ITA NO. 118/CTK/2011 2 BESIDES CHALLENGING THE LEGALITY OF REOPENING THE ASSESSMENT U/S.147 THE ASSESSEE ALSO CHALLENGED THE HOLDING OF ENTIRE RECEIPTS AS INCOME OF THE ASSESSEE. THE LEARNED CIT(A) UPHELD THE ACTION U/S.147 . HE FOUND THAT THE ASSESSEE HAD UTILISED INCURRING EXPENSES OF 4 91 562 TO HAVE BEEN APPLIED FOR P ROMOTION OF OBJECTS OF THE TRUST UNDER THE HEAD PROGRAM EXPENSES BESIDES ADMINISTRATIVE AND OTHER EXPENSES. THE LEARNED CIT(A) OBSERVED THAT BOOKS OF ACCOUNT BILLS AND VOUCHERS COULD NOT BE PRODUCED BY THE ASSESSEE. THEREFORE HE ESTIMATED 25% OF THE TO TAL EXPENSES OF 4 91.562 AS INADMISSIBLE AND ACCORDINGLY DETERMINED THE TAXABLE INCOME OF THE TRUST AT 1 30 568 WHICH INCLUDES 7 678 CLAIMED AS EXCESS OF INCOME OVER THE EXPENDITURE BY THE ASSESSEE . AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. THE LEAR NED AR OF THE ASSESSEE CHALLENGE D THE ACTION U/S.147 OF THE ACT AS ALSO THE DISALLOWANCE OF 25% OF TOTAL EXPENDITURE ON ESTIMATE WHICH ACCORDING TO THE LEARNED AR OF THE ASSESSEE IS HIGH AND EXCESSIVE AND WITHOUT ANY BASIS . THE LEARNED DR ON THE OTHER H AND SUPPORTED THE IMPUGNED ORDER OF THE LEARNED CIT(A). 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCE I FIND THAT ADMITTEDLY THE APPLICATION OF THE ASSESSEE TRUST SEE KING REGISTRATION U/S.12AA HAS BEEN REJECTED BY THE CIT. IN ABSENCE OF SUCH REGISTRATION U/S.12AA THE ASSESSEE - TRUST IS NOT ENTITLED TO BENEFIT U/S.11 OF THE ACT. THEREFORE I AM OF THE CONSIDERED VIEW THAT THE LEARNED CIT(A) WAS JUSTIFIED IN UPHOLDING TH E ACTION OF THE ASSESSING OFFICER U/S.147 OF THE ACT WHO RESORT ED TO TAX INCOME HAVING ESCAPED ASSESSMENT. THE ASSESSING OFFICER HELD THE ENTIRE RECEIPTS BY THE ASSESSEE TRUST AS INCOME IMPLIEDLY DISALLOWING THE CLAIM OF EXPENSES. HOWEVER THE LEARNED CIT(A) HAS OBSERVED THAT THE LEARNED CIT IN HIS ORDER ITA NO. 118/CTK/2011 3 DT.30.7.2007 HAS NOTED THAT THE TRUST APPLIED THE INCOME FOR PERSONAL BENEFITS OF THE CHAIRMAN OF THE TRUST THEREBY ONLY HELD 25% OF THE TOTAL EXPENSES CLAIMED AS INADMISSIBLE. IN VIEW OF THE ASSESSEE NOT HAVING OBTAINED REGISTRATION U/S.12AA I AM OF THE CONSIDERED VIEW THAT 25% DISALLOWANCE OF THE TOTAL EXPEN SES COULD NOT BE ASSIGNED TO THE PERSONAL EXPENSES ALONE IN VIEW OF THE EXISTING PROVISIONS OF INCOME - TAX LAW GOVERNING THE ASSESSEES SEEKING EXEMPTION U/S.12AA. THEREFORE I SUSTAIN 15% DISALLOWANCE OF THE EXPENSES INCLUDING 7 678 AS EXCESS OF INCOME OV ER EXPENDITURE AS RETURNED BY THE ASSESSEE ON HIS FAILURE TO PURSUE SEEKING REGISTRATION U/S.12A WHICH THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED . THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 14 TH MARCH 2011 S D/ - ( . . ) (K.K.GUPTA) ACCOUNTANT MEMBER. ( ) DATE: 14 TH MARCH 2011 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : HEBRON MINISTRY AT. NEAR POLICE STATION TAKABALI DIST.KANDHAMAL 2 / THE RESPONDENT: INCOME - TAX OFFICER PHULBANI WARD PHULBANI 3 . / THE CIT 4 . ( )/ THE CIT(A) 5 . / DR CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY / BY O RDER [ ] SENIOR PRIVATE SECRETARY ( ) (H.K.PADHEE) SENIOR.PRIVATE SECRETARY. ITA NO. 118/CTK/2011 4