The Chennai Income Tax Appellate Tribunal denied the Income Tax exemption while stating that the purchase of ‘Jaguar’ is not a charitable activities.
The tribunal observed that the car was purchased in the name of the managing trustee for the simple reason that it gave relief by way of lower road/life tax and insurance charges, by contending that road/life tax and insurance charges payable for a new car registered as a commercial vehicle is much more compared to a ownership car.
The bench noted that the submissions made by the assessee are not acceptable in registering the vehicle in managing the trustee’s name by utilizing the funds of the assessee, in order to save road/life tax and insurance charges which are meant for charitable purposes.
The tribunal noted that the CIT(A) rightly confirmed the view of the Assessing Officer in denying exemption under sections 11 and 12 of the Act to the extent of value of that car.
The bench noted that the CIT(A) asked the assessee to furnish the details, but, however, no details filed before the first appellate authority.
When the tribunal asked for the log book for verification to find out as to whether the said vehicle was used for the purpose of assessee’s activities, the AR could not produce anything in support of his argument to show that the said vehicle was utilized for the purpose of charitable activities.
The bench stated that the submission of the AR that the log book of the vehicle was filed before the Assessing Officer/ CIT(A) is not acceptable, because, a mere statement cannot be taken into consideration without there being any corroborative evidence.
The bench found no infirmity in the order of the CIT(A).
Facts
The assessee is a trust that conducts its activities under the name and style of M/s. Sri Karpaga Vinayagar Educational & Charitable Trust. The objects of the assessee are in carrying out charitable activities, i.e., education, relief to poor, etc.
The assessee filed its return of income admitting NIL income and under scrutiny notices under section 143(2) and 142(1) of the Act issued in response to which, the assessee uploaded the details as called for through e-proceeding facility.
On examination of details of capital expenses, the Assessing Officer found a vehicle by name “Jaguar XF 3.0 L Premium Luxury” purchased in the name of managing trustee for a value of ₹.62,68,647/- along with insurance of ₹.1,64,923/-.
The Assessing Officer issued show-cause notice to the assessee asking to explain why violation under section 13(1)(c) of the Act should not be quantified and exemption under section 11 & 12 of the Act should not be denied.
The assessee offered explanation which was found by the Assessing Officer as not acceptable. Accordingly, value of the above said car for ₹.62,68,645/- was charged to tax by denying exemption to that extent.
Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the CIT(A).
The bench noted that the same submissions as submitted before the Assessing Officer were reiterated before the CIT(A).
Conclusion
The tribunal dismissed the appeal.
Case Details
Case Name: Sri Karpaga Vinayagar Educational and Charitable Trust V/S The Income Tax Officer, Exemptions Ward, Madurai.
Citation: I.T.A. No.263/Chny/2024
Court: ITAT Chennai
Judge: Shri S.S. Viswanethra Ravi, Judicial Member & Shri S.R. Raghunatha, Accountant Member
Decision Date: 31/07/2024
