Case Law Details

Case Name : Sacred Heart Convent Vs Commissioner of Income Tax (Kerala High Court)
Appeal Number : I.T.A.No.256 of 2013
Date of Judgement/Order : 06/07/2018
Related Assessment Year :

Sacred Heart Convent Vs CIT (Kerala High Court)

The assessee is in appeal from the order of the Tribunal at Annexure-P. The assessee admittedly is a Convent, which is under the Generalate of the Sacred Heart Congregation of the Syro Malabar Church. The constitution of the Generalate speaks of a specific hierarchy with the Generalate as the apex body, Provinces below the Generalate and then the Region and the last unit being the Convents, called the “House”. The appellant is a ‘House’ coming within the constitution of the Generalate. The appellant applied for a registration under Section 12A of the Income Tax Act, 1961 [for brevity “IT Act”]. The same was declined by Annexure-K order. The Commissioner of Income Tax, who considered the application, directed the Income Tax Officer, Ward 1, Thiruvalla to conduct an enquiry. The Income Tax Officer in his report dated 09.06.2011 stated that the applicant is not a separate entity, but one of the Convents under the Generalate. The Income Tax Officer did not recommend the registration under Section 12A, which was accepted by the Commissioner.

2. The appellant was before the Tribunal, which rejected the claim as per Annexure-P. The appellant also relied on Annexure-N wherein a batch of appeals with respect to various Houses, under different Congregations, who have applied for registration; which were declined on the ground that there were no written instrument or constitution. The Tribunal directed fresh consideration of the same.

3. In the present case, the Commissioner does not speak of absence of a written constitution. The appellant also asserts that the constitution of the Generalate regulates the Houses also, which come under the Generalate. The Tribunal also found that the appellant comes under the exclusive control of the Generalate through the hierarchies as disclosed from the constitution and there could be no separate registration granted to the Convent.

4. With the available materials, we are inclined to say that the orders of the Commissioner and the Tribunal are correct. However, we feel that there could be materials examined as to whether the appellant is a separate entity who is entitled to hold property for themselves and who has absolute control in its affairs without interference from the Generalate. A more comprehensive enquiry and reading of the constitution would be required. We are of the opinion that since such facts are involved, there should be a remand to the Commissioner, who shall direct the Income Tax Officer to conduct a comprehensive enquiry and after looking at the constitution also, decide the issue as to whether there could be, as claimed by the appellant, status of a separate entity as distinguished and distanced from the Generalate. To enable such consideration, the orders impugned are set aside.

The appeal is allowed, remanding the matter as indicated above. Parties are left to suffer their respective costs.

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