Kerala High Court
M/S. Voice Of Gospel vs The Income Tax Officer (Exemption) on 25 October, 2024
Author: P Gopinath
Bench: P Gopinath
2024:KER:79630
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
FRIDAY, THE 25TH DAY OF OCTOBER 2024 / 3RD KARTHIKA, 1946
WP(C) NO. 28083 OF 2016
PETITIONER:
M/S. VOICE OF GOSPEL,
MISSION QUARTERS, CEMETRY ROAD,THRISSUR 680 001,
REPRESENTED BY ITS TRUSTEE, K.V. DANIEL.
BY ADV MEERA V.MENON
RESPONDENTS:
1 THE INCOME TAX OFFICER (EXEMPTION),
AYAKAR BHAVAN, ST. NAGAR, THRISSUR - 680 001.
2 COMMISSIONER OF INCOME TAX,
ERNAKULAM, KOCHI - 682018.
3 UNION OF INDIA,
REPRESENTED BY THE SECRETARY TO THE GOVERNMENT OF
INIDA,MINISTRY OF HOME AFFAIRS, FOREIGNERS DIVISION,
(FCRA WING), NDCC - II BUILDING,JAI SINGH ROAD,
NEW DELHI - 110 001.
BY ADVS.
SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT
SRI. P.R.AJITH KUMAR
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
25.10.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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2
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JUDGMENT
The petitioner has approached this Court challenging Ext.P9
order of assessment for the year 2010-11 under the provisions of the
Income Tax Act, 1961 (hereinafter referred to as 'the 1961 Act'). A
reading of Ext.P9 order will show that the petitioner is an assessee, which
has been granted a registration under Section 12A of the 1961 Act. In the
returns filed by the petitioner for the year 2010-11, 'Nil' income was
declared and the petitioner - assessee had also disclosed that it had
received Rs.1,83,39,074/- as foreign contribution. However, on noticing
that as per the returns filed under the Foreign Contribution (Regulation)
Act, 1976 (hereinafter referred to as 'the 1976 Act') and the Rules framed
thereunder, the petitioner had received a foreign contribution of
Rs.2,27,35,071/-, re-assessment proceedings were initiated against the
petitioner leading to the issuance of Ext.P9 order.
2. The learned counsel appearing for the petitioner would
vehemently submit that there is obviously some mistake as the petitioner
had not filed any return under the 1976 Act showing the foreign
contributions for the relevant year to the tune of Rs.2,27,35,071/- as
against Rs.1,83,39,074/- as disclosed in the return of income. It is
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submitted that the petitioner had produced its bank account statements
before the Assessing Authority to show that it had received foreign
contributions only to the extent of Rs.1,83,39,074/- and the figure of
Rs.2,27,35,071/- allegedly taken from the returns filed by the petitioner
under the 1976 Act, is a mistake. It is submitted that since the petitioner
enjoys registration under Section 12A of the 1961 Act, the respondents
could not have imposed any liability on the petitioner to pay tax on the
differential amount (difference between the foreign contribution declared
in the return filed under the 1961 Act and the foreign contribution
declared in the returns filed under the 1976 Act). It is the contention of
the learned counsel appearing for the petitioner that the difference in the
figures reported as foreign contribution for the relevant year are on
account of difference in the amounts reported in the returns filed in
Form FC-3 under the 1976 Act and in Form FC-6 under the provisions of
the same enactment. It is submitted that Form FC-6 was introduced only
for the first time in the year 2011 and the details (if any) contained in the
form filed in Form FC-6 cannot be a ground for initiating re-assessment
proceedings against the petitioner. It is submitted that this Court may
therefore set aside Ext.P9 order as being without jurisdiction and as
being unsustainable in law.
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3. The learned Senior Standing Counsel appearing for the
Income Tax Department vehemently opposes the grant of any relief to
the petitioner. It is submitted that the petitioner had obtained a
registration under Section 12A of the 1961 Act in the year 1997. It is
submitted that the original assessment of the petitioner for the
assessment year 2010-11 was completed on 14.03.2013 and the total
income assessed was 'Nil'. It is submitted that on receiving information
that the petitioner had received Rs.2,27,35,071/- as foreign contribution
(as per the returns filed by the petitioner under the 1976 Act) as against
the foreign contribution disclosed in the return (Rs.1,83,39,074/-) re-
assessment proceedings were initiated against the petitioner culminating
in Ext.P9 assessment order. It is submitted that despite the fact that
several opportunities were given to the petitioner to produce books of
accounts etc, the petitioner failed to produce any books of accounts
justifying or establishing that the amount of foreign contribution
received for the previous year relevant to the assessment year 2010-11
was only Rs.1,83,39,074/- as against the amount of foreign contribution
declared in the returns filed under the 1976 Act. It is submitted that the
petitioner took the stand that the records were lost. It is submitted that
for an entity registered under Section 12A of the 1961 Act, the exemption
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arises out of the provisions contained in Section 11 of the said Act and
there are conditions relating to application of income. It is submitted that
in such circumstances, the difference in the foreign contribution declared
in the Income Tax return and the foreign contribution declared in the
returns filed under the 1976 Act has to be brought to tax as unaccounted
income. It is submitted that the contention of the learned counsel for the
petitioner that the petitioner was not aware of the details furnished in the
return filed under the 1976 Act cannot be accepted as the filing of such
returns under the 1976 Act is mandatory and the petitioner itself had
provided various details to enable filing of returns under the provisions
of the said Act. It is submitted that since the issues involve disputed
questions of fact and no point of jurisdiction has been raised, the writ
petition is liable to be dismissed on the ground that the petitioner has an
effective alternate remedy against Ext.P9.
4. Having heard the learned counsel for the petitioner
and the learned Senior Standing Counsel appearing for the Income Tax
Department, I am of the view that the petitioner has not made out any
case for interference with Ext.P9 in the exercise of the jurisdiction of this
Court under Article 226 of the Constitution of India. The petitioner has
an effective alternate remedy against Ext.P9. That apart, it is the specific
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case of the learned Standing Counsel for the Income Tax Department
that despite several opportunities being given, the petitioner failed to
produce the books of account and took the stand that the books of
account for the year 2010-11 had been lost. I also find merit in the
contention of the learned Standing Counsel that where there is a
difference between the foreign contribution declared in the return of
income filed by the petitioner and the returns filed by the petitioner
under the 1976 Act, it is open to the Income Tax Department to initiate
proceedings for determination of the amount of income that has not been
declared. This is more so because the exemption in terms of the
provisions contained in Section 11 of the 1961 Act is hedged by the
condition that it must be applied for specified purposes. Thus the
difference between the amounts shown as foreign contribution in the
income tax return and the amounts shown in the returns filed under the
1976 Act could be treated as unaccounted income for the purposes of the
1961 Act. However, I do not intend to pronounce anything finally on the
question as to whether the difference between the returns filed by the
petitioner under the 1976 Act and the returns filed under the 1961 Act
automatically leads to the conclusion that there is an unexplained /
unaccounted income in the hands of the petitioner as the petitioner is
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being relegated to the alternate remedy of appeal under the provisions of
the 1961 Act. The contention of the learned counsel for the petitioner that
the Form FC-6 under the 1976 Act was introduced only with effect from
2011 also does not merit acceptance for the reason that even assuming
that the petitioner had filed Form FC-6 wrongly, the fact remains that
there is a difference in the amount reported as foreign contribution
before the Income Tax Authorities and the foreign contributions reported
in the returns filed under the 1976 Act. In other words even assuming
that the filing of Form FC-6 was not mandatory prior to 2011, the fact
remains that there was a difference in the amounts reported as foreign
contributions in Form FC-6 and the foreign contribution mentioned or
disclosed in the return filed under the provisions of the Income Tax Act.
Even assuming that there was no Form FC-6 filed by the petitioner, if the
Income Tax Department were in possession of any information which
would show that the foreign contribution received by the petitioner was
higher than the foreign contribution reported in the income tax return
nothing prevented the Income Tax Authorities from initiating re-
assessment proceedings as was done in this case.
Accordingly, this writ petition will stand dismissed. The
petitioner may file the statutory appeal against Ext.P9 order, in
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accordance with the law. Since this writ petition was pending before this
Court from 23.08.2016 till today, the said period shall be excluded for the
purposes of determining the period of limitation for filing an appeal
against Ext.P9 order.
The writ petition ordered accordingly.
Sd/-
GOPINATH P.
JUDGE
DK
WP(C) NO. 28083 OF 2016
2024:KER:79630
APPENDIX OF WP(C) 28083/2016
PETITIONER EXHIBITS
EXHIBIT P1 COPY OF FORM FC 3 SUBMITTED BY THE
PETITIONER
EXHIBIT P2 COPY OF NOTICE ISSUED BY THE 1ST
RESPONDENT
EXHIBIT P2 A COPY OF FORM FC 6 SUBMITTED BY THE
PETITIONER
EXHIBIT P3 COPY OF OBJECTION FILED BY THE PETITIONER
BEFORE THE 1ST RESPONDNET
EXHIBIT P4 COPY OF NOTICE ISSUED BY THE 1ST
RESPONDENT
EXHIBIT P5 COPY OF NOTICE ISSUED BY THE 1ST
RESPONDENT
EXHIBIT P6 COPY OF NOTICE ISSUED BY THE 1ST
RESPONDENT
EXHIBIT P7 COPY OF REPLY FILED BY THE PETITIONER
BEFORE THE 1ST RESPONDENT
EXHIBIT P8 COPY OF NOTICE ISSUED BY THE 1ST
RESPONDENT
EXHIBIT P9 COPY OF ORDER ISSUED BY THE 1ST RESPONDENT
