CARE INDIA SOLUTIONS FOR SUSTAINABLE DEVELOPMENT,DELHI vs. DCIT, CENTRAL CIRCLE- 14, DELHI

Inspite of issue of notice none appeared on behalf of the assessee nor any adjournment application was moved. Therefore, these two appeals are disposed of after hearing the Ld. DR.

The assessee is a non profit organization and registered u/s.12A of the Act as well as 80G of the Act. The AO in the course of assessment proceedings for A.Y.2017-18 noticed that assessee has claimed certain expenses which are in the nature of provision for leave encashment, provision for gratuity, leave equalization reserve, prior period expenses and expenses in foreign currency and required the assessee to submit the details. However, it appears that the assessee did not furnish justification for claiming such expenses. Thus, the AO treated these expenses as unascertained liabilities and denied deduction u/s.11 of the Act.

The assessee preferred appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee for non compliance. We observed from the order of the Ld. CIT(A) that the assessee requested for adjournment on two occasions. By and large the appeal of the assessee was dismissed for non prosecution by Ld. CIT(A).

On perusal of the statement of facts filed by the assessee before the Tribunal we observed that the assessee furnished substantial details on 23.12.2019 and the remaining details was furnished on 24.12.2019 and 26.12.2019 as called for by the AO. However, the AO without even referring to the details and submissions furnished by the assessee denied the expenses holding them as unascertained liabilities.

Similarly in A.Y.2018-19 we observed that the claim for deduction u/s.11 of the Act was denied on various administrative expenses and fund rising expenses claimed by the assessee, observing that these expenses were not incurred for charitable purpose. The Ld. CIT(A) sustained the order of the AO in denying exemption u/s. 11 of the Act. In the statement of facts filed by the assessee it is the contention of the assessee that various details and explanations called for by the AO were duly complied with. The order of the Ld. CIT(A) is also of non speaking order except placing reliance on the order of the AO.

In the circumstances in the interest of justice both these appeal are restored to the file of the AO for denovo adjudication of the issues in these appeals. Needless to say that the AO shall provide adequate opportunity to the assessee to file necessary details and submissions to prove the contentions of the assessee.

In the result, both the appeals of the assessee are allowed for statistical purpose.