The Income Tax Appellate Tribunal (ITAT) Ahmedabad bench consisting of P.M. Jagtap, Vice-President, and T.R. Senthil Kumar, Judicial Member held that denial of corpus donation without giving the assessee a reasonable opportunity of being heard is unjust. The appellants were represented by S.N. Soparkar, Urvashi Shodhan, and Parin Shah. The respondent side (Revenue) was represented by S.S. Shukla.
The assessee (Blind Peoples Association India) is a trust registered under the Income-tax Act, 1961. The trust was established with the objective to encourage and foster the development of acquaintance amongst the blind and promote; help persons who are totally blind or of deficient eyesight or handicapped to acquire literacy, industrial knowledge, and training and to help them obtain suitable employment and wherever necessary to grant loans and accord monetary and other assistance.
During the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee has received a corpus donation of Rs.5,39,59,121/- in the year under consideration and the assessee was asked by the Assessing Officer to furnish the relevant details and documents in respect of the said corpus donation but the assessee failed to furnish the same despite giving the number of opportunities. The claim of the assessee for exemption on account of corpus donation amounting to Rs.5,39,59,121/-, therefore, was disallowed by the Assessing Officer. Against the order passed by the Assessing Officer, the assessee preferred an appeal before the Commissioner of Income Tax. The commissioner set aside the action of the Assessing Officer. Aggrieved by the order of the Assessing Officer the Revenue (respondent) preferred an appeal to the ITAT (Income Tax Appellate Tribunal).
After hearing the submissions from the side of the respondents and assessee the authority set aside the order of the Assessing Officer and held that for a decision to be decided on merit it should be decided only after giving the assessee a reasonable opportunity of being heard.
“The learned Counsel for the assessee has taken us through the relevant documents placed in the paper-book to point out that the proper and sufficient opportunity was not afforded by the Assessing Officer to the assessee during the course of assessment proceedings to furnish specifically the details and documents in respect of corpus donation of Rs.5,39,59,121/- received during the year under consideration; and, keeping in view the same, we find merit in the contention of the learned Counsel for the assessee that the learned CIT(A) was fully justified in admitting the additional evidence produced by the assessee-trust in support of its case on the issue under consideration relating to exemption on account of corpus donation of Rs.5,39,59,121/- as per clause (d) of sub-rule (1) of Rule 46A of the Income-tax Rules, 1962. Even the learned DR has not raised any contention to dispute this position,” the Tribunal said.
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