ARYA MARINE ACADEMY,MUMBAI vs. EXEM. WARD 1(1), MUMBAI, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRYAssessment Year: 2018-19
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 09.02.2024, impugned herein, passed by the National Faceless
Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) under section 250 of the Income Tax Act, 1961
(in short ‘the Act’) for the A.Y. 2018-19
M/s. Arya Marine Academy
In this case, the case of the Assessee was selected for limited scrutiny for the issue “transaction of trust with specified persons”. The Assessing Officer (AO) in order to scrutinize and verify “large payments of salary, rent, interest etc. made to the specified persons as defined u/s 13(3) of the Act” raised the query by issuing notice dated 142(1) of the Act dated 09.11.2019. The Assessee in response to the said notice though submitted certain details such as prescribed form No.10B i.e. audit report u/s 12A(b) of the Act, however, the AO in para 2.2 of the assessment order observed/mentioned that subsequently various letters were issued to the Assessee requiring him to submit the following details with respect to the payment made to the specified persons as defined in section 13(3) of the Act:
“1. Name and mode of payment made
2. Details of the services provided by specified person(s) in lieu of the payment made
3. Justification with supporting documentary evidence for the payment(s) made
4. Need of the service for fulfillment of the object of the trust”
1 The AO further observed that the Assessee, in spite of affording ample and proper opportunities, failed to furnish satisfying and justifying details by corroborative documents and therefore in the constrained circumstances, the AO disallowed the claim of the Assessee to the tune of Rs.29,23,755/- as unqualified for the exemption u/s 11 of the Act and consequently added the said amount to the income of the Assessee. M/s. Arya Marine Academy
The Assessee, being aggrieved, challenged the said addition before the Ld. Commissioner. Though the Assessee filed various documents in support of its case, however, the Ld. Commissioner by observing in para- no.5 at page no.15 of the impugned order the qua same footing as of the AO, also reiterated that the Assessee clearly failed in explaining the queries raised during the assessment proceedings as well as during the appellate proceedings.
The Assessee, being aggrieved is in appeal before this Tribunal. The Assessee, vehemently, submitted that before both the authorities, it had produced all the documents including the audit report, computation of income, authorization by the specified authority for carrying out the activities/objects as enshrined in the object of the Assessee society as well as details of payment made to the specified persons and the bills and vouchers, however, both the authorities sidelined the same and disallowed the claim of the Assessee.
On the contrary, the Ld. D.R. refuted the claim of the Assessee by submitting that it is the onus of the Assessee to establish its case in proper manner, which the Assessee has failed to establish and therefore Assessee is not entitled for any leniency. M/s. Arya Marine Academy
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6. Heard the parties and given thoughtful consideration to the rival claims of the parties and the peculiar facts and circumstances of the case.
From the paper book filed by the Assessee though it clearly appears that the Assessee had filed the relevant documents but it is a fact that the Assessee has not substantiated/established its case in the format in which the authorities below desired so and therefore for proper and just decision of the case and in the interest of substantial justice, this Court is inclined to remand the instant case to the file of the AO for decision afresh, suffice to say by affording reasonable opportunity of being heard to the Assessee. The Assessee is also directed to file the relevant documents as filed before the Ld. Commissioner as well as before this Tribunal, again before the AO and any other documents which would be essentially required. The Assessee is also directed to file the exact and correct address, as the notices sent to the Assessee have been returned back by the Postal Department with the remarks “left” meaning thereby the Assessee is not situated at the address mentioned in form No.36. 7. Thus, on the aforesaid reasons and taking into consideration the peculiar facts that this case pertains to A.Y. 2018-19, this case is accordingly remanded to the file of the Juri ictional AO for decision afresh, with a direction to decide the instant case within six months from the date of receipt of this order.
M/s. Arya Marine Academy
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8. In the result, the appeal filed by the Assessee stands allowed for statistical purposes.
Order pronounced in the open court on 09.01.2025. (NARENDER KUMAR CHOUDHRY)
JUDICIAL MEMBER
* Kishore, Sr. P.S.
Copy to: The Appellant
The Respondent
The CIT, Concerned, Mumbai
The DR Concerned Bench
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By Order
Dy/Asstt.