SRI VENKATESHWARA EDUCATIONAL TRUST,KANCHIPURAM vs. DCIT(EXCEMPTION), CHENNAI

Deputy Commissioner of Income Tax (Exemptions), Chennai Circle, Chennai U/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’) for the A.Y. 2014- 15 vide order dated 30.12.2016.

At the outset, the ld.counsel for the assessee stated that the assessee is an educational trust at Kanchipuram running Engineering College in the name of Lord Ayyappa Institute of Science and Technology. It was stated that the college was closed during the year 2017. For the assessment year 2014-15, the assessment proceedings took place during December, 2016 and assessment was framed by the AO u/s.143(3)of the Act, vide order dated 30.12.2016. The books of accounts and records were called for, unfortunately the entire records were washed away in the unfortunate floods occurred in Chennai during 2015. It was stated that during the hearing process before the CIT(A) the assessee could not produce the documents and even before the AO, it was not produced because these were not available and the order was passed since it was time barring. The AO framed assessment and made addition towards capital work-in-progress of Rs.1,15,62,993/- in the absence of details. The CIT(A) also upheld the addition and dismissed the appeal of the assessee by observing in para 6.3 as under:-

Now, the assessee stated that it has collected all the evidences in record regarding expenses incurred in construction of Lord Ayyappa Institute of Engineering and Technology and complete details i.e., copies of vouchers are enclosed in assessee’s paper-book at pages 7 to 152 and valuation report by the Valuer as approved by the Income Tax Department is 161 to 166. The ld.counsel stated that these documents were now reconstructed by gathering from the suppliers and it was requested that these should be admitted and matter may be restored back to the file of the AO.

When these facts were confronted to ld. senior Departmental Representative, he objected to admissibility of additional evidences but could not controvert to the arguments of the ld.counsel for the assessee that these evidences were destroyed in floods of Chennai during 2015, where entire records of the assessee were washed away along with the original records. Now the assessee has reconstructed these evidences and these are vital for deciding the issue of addition of capital work-in-progress amounting to Rs.1,15,62,993/-.

After hearing both the sides, we are of the view that these evidences are vital for deciding the issue and hence, we admit these evidences and remand the matter back to the file of the AO for fresh adjudication after considering these evidences. The orders of the lower authorities i.e., of the AO

In the result, the appeal of the assessee is allowed for statistical purpose.