Save A Family Plan (India) Vs DCIT (Exemptions) (Kerala High Court)
The case involves an appeal by a charitable trust registered under Section 12A of the Income Tax Act, 1961, claiming benefits under Section 11 of the Act. During the financial year 2013-14 (Assessment Year 2014-15), the appellant received domestic and foreign donations and distributed donations to 72 other institutions, also registered under Section 12A. The Assessing Officer, upon examining the appellant’s accounts, accepted the return of income in the assessment order dated 30.12.2016. Subsequently, the Commissioner of Income Tax (Exemptions), Kochi, initiated suo motu revisional proceedings under Section 263 and, by order dated 29.03.2019, set aside the assessment order, directing the Assessing Officer to re-examine the matter. The Commissioner reasoned that exemptions under Section 11(1)(a) should only apply if donations were made to institutions with a similar categorization under the Foreign Contribution (Regulation) Act, 2010 (FCRA).
The appellant appealed against this revisional order to the Income Tax Appellate Tribunal, Cochin Bench, which held that the donations constituted application of income for charitable purposes and were not affected by the FCRA provisions. However, the Tribunal further observed that donations should align with the trust’s objects and, since the assessment order did not address this, there was no illegality in the Commissioner’s exercise of Section 263 powers. The appellant contested this reasoning, raising two legal questions: whether the Tribunal correctly upheld the Commissioner’s exercise of revisionary jurisdiction, and whether evidence existed to justify such invocation.
