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Facts
The assessee received Rs. 7.52 Crores as voluntary donations which were claimed as exempt. The AO noted that a large sum was deposited in cash within a few days. The AO added the entire amount to the assessee's total income, noting some dates of collection did not pertain to the impugned Assessment Year.
Held
The Tribunal found that the assessee was not given an adequate opportunity to present its case and rebut the findings of the AO, violating the principle of natural justice. Therefore, the issue was remitted back to the AO for fresh consideration.
Key Issues
Whether the assessee was denied natural justice by not being given an opportunity to rebut the remand report findings and whether the donations were correctly treated as income.
Sections Cited
12A
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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI. KESHAV DUBEY
Per Laxmi Prasad Sahu, Accountant Member :
This appeal is filed by the assessee against the Order passed bythe CIT(A) vide DIN and Order No.ITBA/N FAC/S/250/2024-25/1071525593(1) dated 24.12.2024.
At the outset of hearing, the learned Counsel submitted that during the course of appellate proceeding before the CIT(A), documents were submitted as additional evidence and CIT(A) called for remand report from AO and the AO submitted the remand report dated 22.04.2022 and after receiving the remand report, the learned CIT(A) did not provide opportunity to file rebuttal / rejoinder on the findings recorded by the AO in the remand proceedings and he violated the principle of natural justice and requested that one more Page 2 of 3 opportunity may be given to the assessee since the documents were voluminous and the AO has not examined properly. Therefore, he requested that the matter may be remitted to the AO.
On the other hand, learned DR relied on the Order of lower authorities.
Considering the rival submissions and on perusal of the entire material available on record and Orders of authorities below, we noted that the dispute is regarding 7.52 Crores which was received by the assessee and shown it as voluntary donation and entire receipts were claimed as exempt. The society is registered under section 12A of the Act since 01.04.2004, filed return of income on 30.09.2008 declaring Nil income. Later on 01.12.2008, the return of income was revised declaring total income of Rs.9,680/- reducing the revised claim to Rs.40,930/-. During the course of assessment proceedings, detailed questions were asked and assessee filed reply and from para No.9(a) of the Assessment Order it is noted that sum of Rs.7,52,25,500/- was received from a number of doners which were collected by various volunteers and pooled together and deposited to Trust bank accounts beyond the imagination of belief and the AO noticed that the cash was deposited in 4 accounts viz., Rs.1,50,00,000/- on 06.03.2010, Rs.1,50,00,000/- on 07.03.2010, Rs.3,01,50,000/- on 12.03.2010 and lastly Rs.1,50,75,000/- on 18.03.2008 and he noted that this huge amount cannot be collected within few days. From the above findings of the AO, we noted that the income of the assessee is pertaining to Financial Year 2007-08 relevant to Assessment Year 2008-09. However, the AO has mentioned that cash was collected on 06.03.2010 and 07.03.2010 which is not related to the impugned Assessment Year, and added to the total income of the assessee.
Page 3 of 3 5. Considering the prayer of the assessee and facts of the case and in the interest of justice, we are remitting this issue back to the jurisdictional AO for a fresh consideration and decide the issue as per law after giving reasonable opportunity of being heard to the assessee and assessee is directed to substantiate its case with cogent materials and not to seek unnecessary adjournments, for early disposal of the case.
In the result, appeal filed by the assessee is allowed for statistical purposes.