SRI TALAPAKA ANNAMACHARYA EDUCATIONAL SOCIETY,NEW BOYAPALLY, RAJAMPET vs. INCOME-TAX OFFICER (EXEMPTIONS), TIRUPATI

The assessee before the learned CIT (A) NFAC, has submitted that, despite the books of account and other vouchers and invoices were made available to the AR of the assessee, the same were not produced before the Assessing Officer by him and as such the Assessing Officer has passed the assessment order against the assessee. The learned AR submitted that the above noted fact was specifically mentioned before the learned CIT (A) NFAC and the learned CIT (A) NFAC in para 6 of its order had captured the above noted facts to the following effect:

On the basis of the above it was submitted that since the assessee was ready and willing to produce the books of account, vouchers & invoices etc,, before the learned CIT (A) NFAC, it was incumbent upon the learned CIT (A) NFAC to seek a remand report of the Assessing Officer and decide the issue on merit. However, quite contrary to the above, learned CIT (A) NFAC had dismissed the appeal of the assessee on the ground that the assessee failed to produce the record before the Assessing Officer. It was submitted by the assessee that given an opportunity, the assessee would be able to produce all the books of account, vouchers and invoices etc., before the competent authority and therefore, necessary directions be issued for deciding the issue on merit.

Per contra, the learned DR submitted that the matter may be decided in accordance with the law.

We have heard the rival arguments made by both the sides and perused the material available on record. Undisputedly, there was an error on the part of the AR of the assessee for not producing the record despite its availability before the Assessing Officer. The assessee being an educational institution should be careful in pursuing the litigation before the Revenue Authorities.

However, the fact remains that the assessee raised to the above said plea before the learned CIT (A) NFAC. The learned CIT (A) NFAC had not taken cognizance of the fact and has dismissed the appeal of the assessee as the assessee failed to produce the record before the Assessing Officer. In our view, the above said approach of the learned CIT (A) NFAC cannot be upheld as the learned CIT (A) NFAC has co-terminus power and has duty bound to decide the issue on merit. The above said position has been reiterated by the Hon'ble Delhi High Court in the case of Jansampark Advertising and Marketing reported in 56 Taxmann 286 whereby the Hon'ble Delhi High Court has held that the learned CIT (A) NFAC has co-terminus power to decide the issue. Having held that the learned CIT (A) NFAC should have decided the issue on merit, we are of the considered opinion that the matter required to send back to the file of the Assessing Officer for deciding the issue afresh, subject to assessee giving free education to one girl student belonging to backward community studying in assessee’s educational institution for one semester. The assessee shall file the slip along with the affidavit of the girl student to whom the fee discount has been allowed before the Tribunal. With the above said direction the appeal of the assessee is allowed for statistical purposes. However, the assessee is directed to produce all the evidence before the Assessing Officer at the time of hearing.

In the result, appeal filed by the assessee is allowed for statistical purposes.