JASODA SADAN,CUTTACK vs. INCOME TAX OFFICER (EXEMPTION), CUTTACK, CUTTACK

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ITA 225/CTK/2024Status: HeardITAT Cuttack11 July 2024AY 2016-173 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the matter to the AO for readjudication, granting the assessee an opportunity to substantiate its claims. The assessee had failed to provide details to the AO and CIT(A) earlier.

What were the facts?

The assessee, a society registered under Section 12AA, had its donations of Rs. 5,00,000 treated as income by the AO. The AO also made an ad-hoc disallowance of 20% of expenditure and disallowed depreciation. The CIT(A) upheld the AO's findings.

What were the issues?

Whether the AO and CIT(A) erred in treating donations as income and disallowing expenditure and depreciation without proper consideration of evidence and opportunity to the assessee.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 11(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH CUTTACK

Before: SHRI GEORGE MATHAN

Hearing: 11/07/2024Pronounced: 11/07/2024

O R D E R This is an appeal filed by the assessee against the order of the ld CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 08.05.2024 in DIN & Order No.ITBA/APL/S/250/2023-24/1062228665(1) for the assessment year 2016-2017.

2.

It was submitted by the ld. AR that the assessee is a society which has been granted registration u/s.12AA of the Act. It was the submission that the assessee filed its return on 17.10.2016 disclosing total income at Rs.Nil. Subsequently the case of the assessee selected for limited scrutiny wherein the AO treated the donations received of Rs.5,00,000/- as income of the assessee which was already disclosed and included in the gross receipt disclosed by the assessee. It was the submission that the AO has disallowed 20% of expenditure on adhoc estimate basis to the Rs.3,21,500/- without having any cogent reason for such disallowance and without rejecting books of account. It was further submitted by the ld. AR that the disallowance of depreciation claimed by the assessee treating the same as not allowable as per the provisions of Section 11(6) of the Act. In appeal, the ld. CIT(A) has also accepted the findings recorded by the AO and dismissed the appeal of the assessee. It was the prayer of the ld. AR of the assessee that the assessee has produced the documentary evidence as were sought for by the AO, however, those documents have not been considered. Even before the ld. CIT(A) the assessee has filed statement of facts along with grounds of appeal

1.

. But the ld. CIT(A) without providing sufficient opportunity, has dismissed the appeal of the assessee. Therefore, the ld. AR prayed that one more opportunity may be provided to the assessee to represent its case and substantiate its claim before the AO.

3. In reply, ld. Sr. DR vehemently supported the order of the ld. CIT(A) and the ld. AO. It was the submission that restoring the matter to the file of AO would be, in fact, giving the assessee a second round which should not be granted.

4. We have considered the rival submissions. A perusal of the para 2 assessment order, shows that the AO has asked for certain details regarding nature and source of cash deposit, however, there was no compliance made by the assessee upto the completion of assessment resulting into some additions made by the AO. Further on perusal of para 2 of page 3 of the order of the ld. CIT(A), clearly shows that notices were issued to the assessee by the ld. CIT(A), however, no compliance has

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