ITA No. 729/DEL/2022: Sad Bhawna vs. ACIT Central Circle-06, Delhi – A Detailed Judgment Summary

Date of Hearing: 05.07.2023

Date of Pronouncement: 27.09.2023

Judges:

• Sh. C. M. Garg, Judicial Member
• Dr. B. R. R. Kumar, Accountant Member

Parties:

Appellant: Sad Bhawna

Respondent: ACIT, Central Circle-6, New Delhi

Background:

The case under review, ITA No. 729/Del/2022, pertains to the assessment year 2011-12. Sad Bhawna (the appellant), represented by legal counsel, filed an appeal against the order of the ld. CIT(A)-30, New Delhi dated 28.03.2022 concerning disallowances and additions made during the assessment.

Issues Raised:

Both the appellant and the Revenue raised several grounds of appeal. The Revenue challenged the deletion of additions made on account of donations paid for non-charitable purposes totaling Rs.33,03,30,904. On the other hand, Sad Bhawna contested the sustained addition of Rs.5.54,85,329 made by the AO on account of donations to M/s FIIT JEE and further argued about the incorrect facts and violation of natural justice principles enumerated by the CIT(A).

Proceedings:

During the proceedings, it was disclosed how the allegedly charitable donations were routed towards non-charitable endeavors, specifically the FIIT JEE group, essentially for the fundraising for an IPO that later did not materialize. Upon scrutiny, these transactions appeared as manipulative financial maneuvers aimed at tax evasion and fund misrouting under the guise of charitable activities.

Decision:

After considering the arguments from both sides and examining the available records, the ITAT decreed the following:

1. The addition of Rs.33,03,30,904, originally made on account of non-charitable donations but deleted by the CIT(A), was subject to scrutiny due to its utilisation for non-charitable purposes within the FIIT JEE group scenario.
2. The appeal findings drew heavily upon the precedents and evidential substances brought on by similar cases, notably the action and events surrounding the entities related to FIIT JEE group and various trust/society fund movements.
3. The tribunal, in affirming the CIT(A)’s decisions on specific counts and contesting them on others, ultimately concluded that the appellant’s pleas lacked merit, leading to the dismissal of Sad Bhawna’s appeal and allowing the Revenue’s appeal.

In essence, the tribunal confirmed the disallowances and sustained additions made by the lower authorities, aligning them with the broader determinations surrounding the FIIT JEE group’s financial dealings masquerading as charitable transactions.

Conclusion:

The ITAT’s judgment in ITA No. 729/DEL/2022 is a testament to the rigorous scrutiny tax appeals undergo, especially those involving complex financial manoeuvres and alleged charitable activities used for non-charitable purposes. This case underscores the tribunal’s commitment to uphold the integrity of tax laws and the principles of justice.

Order Pronounced in the Open Court on 27/09/2023.

Document prepared by the assistant based on case details provided, illustrating a judgment summary for ITA No. 729/DEL/2022 – Sad Bhawna vs. ACIT Central Circle-06, Delhi.