Case Number: ITA 834/DEL/2021
Appellant: Reliable Educational Alliance Society, New Delhi
Respondent: CIT (Exemption), Lucknow
Assessment Year: 2015-16
Result: 2015-16
Case Filed on: 2021-07-07
Order Type: Final Tribunal Order
Date of Order: 2023-05-11
Pronounced on: 2023-05-11
This appeal was filed by Reliable Educational Alliance Society against the order dated 24.03.2021 passed under section 263 of the Income Tax Act, 1961, by the Commissioner of Income Tax (Exemption), Lucknow for the assessment year 2015-16. The primary issue was regarding the receipt of a corpus donation of Rs. 1 crore.
The appellant raised the following grounds of appeal:
The case was heard by the Delhi Bench ‘H’ of the Income Tax Appellate Tribunal (ITAT), with Shri Saktijit Dey, Judicial Member, and Shri M. Balaganesh, Accountant Member, presiding over the matter. The appeal was scheduled for a hearing on 01.05.2023 and the order was pronounced on 11.05.2023.
The appellant, represented by Dr. Rakesh Gupta, Advocate, and Sh. Deepesh Garg, Advocate, contended that the AO had conducted a thorough inquiry during the assessment proceedings. The AO had specifically called for details regarding the corpus donation and was satisfied with the explanations and evidence provided by the assessee.
On the other hand, the learned Departmental Representative, Ms. Sapna Bhatia, CIT (DR), argued that the assessee failed to reconcile the receipt of the corpus donation with proper evidence and that the AO had not adequately inquired into the matter.
The Tribunal noted that the AO had indeed conducted detailed inquiries during the assessment proceedings. The AO had issued multiple notices under section 142(1) of the Act, requiring the assessee to furnish details of donations, including corpus donations, along with supporting evidence. The assessee had complied with these notices and provided all the necessary details, including the return of income and bank statements of the donor, M/s. Suran Protsahan.
The Tribunal observed that the CIT (Exemption) had based his findings on the fact that the corpus donation was not reflected in the balance sheets of the assessee and the donor. However, the Tribunal found that this observation was contrary to the materials on record. The balance sheet forming part of the Tax Audit Report clearly reflected the corpus donation.
The Tribunal further noted that the corpus donation was received through a cheque, which was realized in the subsequent financial year. This timing issue did not affect the genuineness of the donation.
Additionally, the Tribunal pointed out that the donor, M/s. Suran Protsahan, was itself a registered charitable trust under section 12AA of the Act, lending credibility to the donation.
The Tribunal concluded that the AO had conducted proper inquiries and had applied his mind with due diligence. Therefore, the assessment order could not be considered erroneous and prejudicial to the interest of Revenue. The Tribunal quashed the impugned order passed under section 263 of the Act and restored the order of the Assessing Officer.
The order pronounced in the open court on 11th May, 2023 was as follows:
Order pronounced in the open court on 11th May, 2023
Sd/- Sd/-
(M. BALAGANESH) (SAKTIJIT DEY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Date: 11th May, 2023
RK/-
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar, ITAT, New Delhi
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