Ita/272/2010 Of Commissioner Of Income Tax, Kottayam v. The Nilackal St.thomas Church, Kottayam

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HON'BLE MR. JUSTICE BABU MATHEW P.JOSEPH THURSDAY, THE 8TH DAY OF MARCH 2012/18TH PHALGUNA 1933 ITA.No. 272 of 2010 ( ) --------------------------- ITA.943/2008 of I.T.A.TRIBUNAL,COCHIN BENCH ----------- APPELLANT/RESPONDENT: -------------------------------- THE COMMISSIONER OF INCOME TAX, KOTTAYAM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S)/APPELLANT: ----------------------------------- THE NILACKAL ST.THOMAS CHURCH AND ECUMENICAL CENTRE TRUST, DEVALOKAM, KOTTAYAM PIN-686 038. BY ADVS. SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS SRI.P.GOPINATH THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 08-03-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: svs I.T.A. NO. 272/2010 APPENDIX PETITIONER'S ANNEXURES: ANNEXURE A:TRUST DEED. ANNEXURE B:CIT'S ORDER F. NO.205/TECH/80G/48/CIT.KTM./2007-08DATED 30/09/2008. ANNEXURE C:ITAT'S ORDER IN ITA NO.943/COCH/2008 DATED 25/02/2010RESPONDENT'S ANNEXURES: NIL /TRUE COPY/ svs P.A. TO JUDGE. C.N.RAMACHANDRAN NAIR & BABU MATHEW P.JOSEPH, JJ. .................................................................... I.T.A.No.272 of 2010 ....................................................................Dated this the 8[th] day of March, 2012. J U D G M E N T Ramachandran Nair, J. This is an appeal filed by the Revenue against the order of the Tribunal holding that the respondent is entitled toregistration under Section 80G(5)(vi) of the Income Tax Act(hereinafter referred to as the Act for short). 2.We have heard learned Standing Counsel for theappellantRevenueandlearnedSeniorcounselShri.A.K.Jayasankar Nambiar appearing for the respondent. 3.The respondent applied for registration under theabove provisions of the Act for receiving donations forcharitable purposes. Application filed under Rule 11AA of theIncome Tax Rules was rejected by the Commissioner statingthat the accounts produced by the respondent along with theapplication do not show proof of charitable activities carriedon by the respondent. What is clear from Section 80G(5) isthat a Fund or Trust is entitled to registration only if it isengaged in charitable activities. In this case, the respondent is a religious institution which has a claim that it is engaged incharitable activities as well. It is entitled to registration underSection 80G(5B), which is introduced with effect from01/04/2000, only if its 95% of the income is utilised forcharitable purposes. This is certainly a matter which has to beestablished before the Commissioner to entitle for registrationbased on application filed under Rule 11AA of the Income TaxRules. 4.The contention of the Revenue is that the Tribunalin principle agreed that the delay in disposal of the applicationis not a ground for presuming entitlement for registration.However, in the latter part of the order the Tribunal withoutany material held that the assessee is entitled for registration.Learned counsel for the assessee contended that even if theTribunal has not considered any details, the assessee isentitled to have the account verified by the Tribunal to verifywhether the assessee is utilising 95% of it's income forcharitable purposes under Section 80G(5B), failing whichdenial of registration is justified. 4.The contention of the Revenue is that the Tribunalin principle agreed that the delay in disposal of the applicationis not a ground for presuming entitlement for registration.However, in the latter part of the order the Tribunal withoutany material held that the assessee is entitled for registration.Learned counsel for the assessee contended that even if theTribunal has not considered any details, the assessee isentitled to have the account verified by the Tribunal to verifywhether the assessee is utilising 95% of it's income forcharitable purposes under Section 80G(5B), failing whichdenial of registration is justified. After hearing both sides, we are satisfied that theassessee is entitled to one more opportunity to produce theaccounts before the Commissioner to establish that 95% of theincome is utilised for charitable purposes during the year forwhich registration is sought. We therefore allow the appeal byvacating the orders of the Tribunal and that of theCommissioner and restore the matter to the Commissioner forreconsideration based on accounts and evidence which will beproduced by the assessee. We make it clear that theCommissioner is bound to issue an order either under Rule11AA(4) or (5) either by granting or by rejecting theapplication with reasons in support thereof. The assesseeshould be heard before passing any adverse orders against theassessee. This I.T.Appeal is allowed as above. (C.N.RAMACHANDRAN NAIR, JUDGE) (BABU MATHEW P.JOSEPH, JUDGE)