REKHA GOENKA,CHENNAI vs. ITO, CHENNAI

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-4, Chennai, dated 14.10.2015 and pertains to assessment year 2011-12.

Shri F.C. Jain, the Ld. representative for the assessee, submitted that the assessee donated an amount of `20,00,000/-, known as “Society For Welfare Of The Handicapped Persons” at Durgapur. The donation was, in fact, transferred by RTGS mode on 30.03.2011 through a bank account maintained with Indian Bank, Harbour Branch, Chennai. The Assessing Officer by placing reliance on the letter dated 24.03.2014, said to be received from the Society For Welfare Of The Handicapped Persons, Durgapur, Kolkata, disallowed the claim of the assessee. The recipient-society denied the receipt of `20,00,000/- by letter dated 03.02.2014 and the donation has not reached the beneficiary society. The Assessing Officer has also observed that the Society denied having a bank account with Axis Bank, Kolkata. The Assessing Officer without giving a copy of the so-called letter said to be received from the Society on 24.03.2014, passed the assessment order on the very same day, i.e. on 24.03.2014. The Ld. representative further submitted that the Assessing Officer reproduced copy of the letter at page 4 of the assessment order. After receiving the assessment order only, the assessee came to know that there was a letter from the Society claiming that a bank account was opened in the Axis Bank with the help of some miscreants. that the assessee was able to obtain the bank statement from Axis Bank in respect of the account to which the money was transferred.

On the contrary, Shri Murali Mohan, the Ld. Departmental Representative, submitted that the Assessing Officer made elaborate enquiry. The assessee claimed before the Assessing Officer that the recipient-society, namely, Society For Welfare Of The Handicapped Persons, Durgapur, Kolkata, was an approved society for the projects under Section 35(1)(ii) of the Act. The recipient-society by letter dated 24.03.2014, clarified that they do opened with the help of some miscreants, including the bank officials. The recipient-society has also informed the Assessing Officer that they have already lodged complaint with the police and the matter was being investigated by Criminal Investigation Department of the West Bengal Police. The recipient-society has also informed the Assessing Officer that the matter was also informed to the Reserve Bank of India. Therefore, it was obvious that the bank account was opened in a fraudulent manner with Axis Bank and the Society For Welfare Of The Handicapped Persons, Durgapur, which obtained the approval under Section 35 of the Act was not the real beneficiary of the bank account to which the money was transferred by the assessee. On a query from the Bench when the letter of the recipient-society is dated 24.03.2014, how the Assessing Officer was able to incorporate the same as part of the assessment order? The Ld. representative clarified that the Assessing Officer might have received the same by FAX or e-mail.

We have considered the rival submissions on either side and perused the relevant material available on record. The Assessing Officer incorporated the copy of the letters said to be written by the Society For Welfare Of The Handicapped Persons, Durgapur, Kolkata dated 03.02.2014 and 24.03.2014 as part of the assessment order. The assessee claims that the letter dated 24.03.2014 was not furnished to her. Admittedly, the letter was dated 24.03.2014 and the assessment order was also passed on 24.03.2014. Therefore, the Assessing Officer might not have given the copy of the letter dated 24.03.2014 to the assessee. Even assuming for argument sake that a copy of the letter was furnished to the assessee on 24.03.2014, the assessee would not have had time to respond to the letter since the assessment order was passed on 24.03.2014 itself.

The Ld. Departmental Representative contends before this Tribunal that non-furnishing of letter dated 24.03.2014 may not prejudice the interest of the assessee. We have carefully gone incorporated by the Assessing Officer in the impugned assessment order. This letter clarifies that the recipient-society does not have any bank account in Axis Bank and the account in the Axis Bank was opened with the help of some miscreants, including the bank officials. This letter further discloses the pendency of the criminal case. It is further clarified that the recipient-society maintained one account with State Bank of India in Durgapur, Kolkata. However, the assessee claims that the funds were transferred from the so- called Axis Bank account to the account of the society with State Bank of India. This claim of the assessee apparently was not examined by the lower authorities. This Tribunal is of the considered opinion that when the society claims that they have no account in Axis Bank, how the funds were transferred from that account to State Bank of India account needs to be examined.

With the above observation, the appeal of the assessee is allowed for statistical purposes.