DAYA SEWA FOUNDATION,MARHAURA , SARAN (CHHAPRA) vs. ITO EXEMPTION WARD MZF, MUZAFFARPUR

Per Sonjoy Sarma, Judicial Member: The present appeal filed by the assessee is directed against the order dated 20.06.2025 passed by the NFAC, Delhi [hereinafter referred to as the ‘Ld. CIT(A)] u/s 250 of the Income Tax Act, 1961 (the ‘Act’) for the assessment year 2018-19. 2. Brief facts of the case are that, the case of the assessee was selected for scrutiny examine the claim of deduction made by the assessee u/s 57 of the Act, against the income assessed under the head of income from other sources u/s 56 of the Act. During the course of assessment proceedings, notice u/s 142(1) of the Act were issued to the assessee requiring assessee to furnish details and supporting documents in respect of claim of expenditure amounting to Rs.13,08,47,089/-.

I.T.A. No.313/Pat/2025 Daya Sewa Foundation ; AY: 2018-19 However, assessee failed to furnish various details i.e., agreement with District Development Agency, acknowledgment of receipts, bill vouchers and supporting documents substantiate in the expenditure claim. In absence of any supporting evidence, the Assessing Officer concluded that expenses were verifiable could not be placed to have been incurred and exclusively for the purpose of charitable income as required u/s 57 of the Act. Accordingly, the Assessing Officer disallow the entire claim of Rs.13,08,47,089/- and assessed the total income at Rs.13,08,47,089/-. 3. Dissatisfied with the above order, assessee went in appeal before the Ld. CIT(A). However, due to failure to produce the books of account, bank statement or any documentary evidence, in support of the expenditure claim, the Ld. CIT(A) sustained the order of the Assessing Officer. 4. Still aggrieved by the above order, assessee is in appeal before this Tribunal. At the time of hearing, the Ld. AR submitted that the order of the lower authorities is not sustainable in law that assessee was unable to furnish relevant documents earlier due to certain constraint. It was further submitted that the assessee is now ready to produce all necessary supporting documents if one more opportunity is granted. 5. On the other hand, the Ld. DR supported the decision of the authorities below and submitted that despite repeated opportunity, assessee failed to substantiate the claim. 6. We have heard the rival submission of the parties and perusing the material available on record, it is evident that assessee failed to produce any supporting documents either before the Assessing Officer or before the Ld. CIT(A), including the books of account such as cash book, bank account statement, ledger accounts and expenditure details. Therefore, disallowance made by the Assessing Officer and sustained by the Ld. CIT(A) was justified based on the material available on record. However,

I.T.A. No.313/Pat/2025 Daya Sewa Foundation ; AY: 2018-19 considering the principles of natural justice and in the interest of fair play, we are of the view that assessee should be granted one final opportunity to substantiate the claim. At the same time, conduct of the assessee shows consistent failure to comply with statutory requirement resulting in delay and wastage in judicial time. Accordingly, we set aside the order of the Ld. CIT(A) and restore the issue to the file of Assessing Officer for fresh adjudication and, directed to assessee to produce the supported documents in order to substantiate its claim and comply to the notices issued by the Assessing Officer without further delay. Further, considering the non-compliance on the part of assessee, we shall direct the assessee to deposit a cost of Rs.50,000/- with the Income Tax Department and produce the receipt before the Assessing Officer at the time of hearing.

Sd/- Sd/- [Laxmi Prasad Sahu] [Sonjoy Sarma] Accountant Member Judicial Member Dated: 22.04.2026 DP, PS Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- 5. CIT(DR)

//True copy// By order Assistant Registrar, Kolkata Benches