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Facts
The assessee, a society registered under Section 12A, filed a Nil income return. The AO added Rs. 2.31 Cr to its income under Section 115BBC, treating it as anonymous donation, after the assessee claimed the amount as anonymous donation towards corpus. The ld. CIT(A) subsequently deleted this addition based on additional evidence provided by the assessee for the first time.
Held
The Tribunal found that the ld. CIT(A) erred in admitting additional evidence without confronting the AO, violating Rule 46A. The Tribunal directed the AO to re-examine the matter de novo in light of a relevant Bombay High Court judgment, affording the assessee a meaningful opportunity of being heard.
Key Issues
Whether the ld. CIT(A) violated Rule 46A by admitting additional evidence without confronting the AO, and the correct treatment of anonymous donations under Section 115BBC.
Sections Cited
12A, 115BBC, 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Inturi Rama Rao & Shri Prakash Chand Yadav
Asst.Year 2018-2019 The Income Tax Officer High Range Rural Ward 1 & TPS v. Development Society Thodupuzha. XIV, 273, Near Post Office Chandra Nagar Palakkad – 678 007. PAN : AAAJH0168A. (Appellant) (Respondent) Appellant by : Smt.Leena Lal, Sr.AR Respondent by : Sri.Padmanathan K.V., Advocate Date of Pronouncement : 22.05.2025 Date of Hearing : 21.05.2025. O R D E R
Per Prakash Chand Yadav, JM :
The present appeal of the Revenue is arising from the order of the National Faceless Appeal Centre / learned Commissioner of Income-tax (Appeals) [“CIT(A)” for short] dated 20.03.2023, having DIN & Order No.ITBA/NFAC/S/250/2022- 23/1050973623(1) and relates to the assessment year 2018- 2019.
Brief facts of the case as coming out from the orders of the authorities below are that the assessee is a society registered u/s.12A of the Income-tax Act, 1961, filed its return of income for the impugned year declaring Nil income. Thereafter the case of the assessee was selected for scrutiny.
. High Range Rural Development Society. During the course of assessment proceedings, the AO observed that the assessee has deposited an amount of Rs.2,31,03,413 in its bank account. The AO asked for the source of this amount from the assessee. In response to which the assessee explained that this is the amount representing anonymous donation towards corpus. However, dissatisfied with the explanation of the assessee, the AO added the amount to the income of the assessee applying the provisions of sec.115BBC.
Aggrieved with the order of the AO, the assessee filed an appeal before the ld.CIT(A) and pointed out that the assessee has received donations from various donors. The ld.CIT(A) referring certain documentary evidences filed by the assessee for the first time before the ld.CIT(A), accepted the claim of the assessee and deleted the addition made by the AO.
Feeling aggrieved with the order of the ld.CIT(A), the Revenue has come up in appeal before us. At the outset, the learned DR pointed out that the Revenue is aggrieved by the action of the CIT(A), admitting additional evidence for the first time before him without confronting to the AO. The learned DR drawn the attention of the bench towards ground No.2.2 in which the Revenue is contending that the ld.CIT(A) has violated the provisions of Rule 46A of the Income-tax Rules.
The learned Counsel appearing on behalf of the assessee relied upon the order of the CIT(A).
. High Range Rural Development Society.
We have heard the rival submissions and perused the material available on record. Perusal of the findings recorded by the ld.CIT(A) would show that the ld.CIT(A) has accepted certain documentary evidences without confronting to the AO. Therefore, in our view the matter requires fresh consideration at the end of the AO for examining the veracity of these documents filed by the assessee before the ld.CIT(A). The learned DR also placed on record the judgment of the Hon’ble Bombay High Court in the case of Everest Education Society v. ACIT reported in (2024) 164 taxmann.com 744 (Bom.), wherein under similar circumstances the Hon’ble Bombay High Court has affirmed the addition of anonymous donation received from 7145 donors. Therefore, we direct the AO to examine the present case de novo in the light of the judgment of the Hon’ble Bombay High Court, cited supra. Needless to say, the AO shall afford meaningful opportunity of being heard to the assessee before passing any order.
In the result, the appeal filed by the Revenue is allowed for statistical purposes.
Order pronounced on this 22nd day of May, 2025.