The Chandigarh bench of the Income Tax Appellate Tribunal ( ITAT ) has held that taxpayers can be allowed to furnish critical additional evidence before completing an assessment under section 144 of the Income Tax Act, 1961.
Baba Kishan Dasss Education & Charitable Society, the assessee is an educational society running a school by the name of Baba Kishan Dass Education & Charitable Society at Village Salana. The assessee society filed its return of income declaring NIL income on 28/09/2016 which was subsequently revised on 14/11/2017. The case of the assessee was selected for scrutiny. Notice under section 143(2) was issued and thereafter notice under section 142(1) along with a questionnaire and thereafter final show cause was issued and in the absence of any reply submitted by the assessee society, the assessment was framed under section 144 by the AO.
As per the AO, the assessee has filed its return of income under section 10(23C)( iiiad ) of the Act by showing income from other sources at Rs. 69,13,980. As per the AO, in order to claim exemption, the assessee society has to fulfil certain conditions as laid down in the relevant provisions, however in the instant case, the assessee society has failed to furnish the details/ information to substantiate its claim under section 10(23C)( iiiad ) of the Act and therefore the exemption claimed was disallowed and whole of the amount of Rs. 69,13,980/- was brought to tax in the hands of the assessee society.
During the hearing, the AR submitted that the assessment in this case was completed under section 144 of the Act. Regarding non-compliance to the notices issued by the AO, it was submitted that the assessee did not have access to the email –id being located in the small village Salani, Tehsil Amloh District Fatehgarh Sahib where there was no internet facility available.
It was further submitted that the authorized manager cum Principal of the School Sardar Sukhwinder Singh looking after the affairs of school could not give due attention due to medical treatment of his son Charanjeet Singh who was suffering from cancer and who has since met with an untimely death. It was accordingly submitted that there was a reasonable cause for non-appearance before the AO.
It was further submitted that during the appellate proceedings, the assessee sought permission of the CIT(A) to produce additional evidence as per the Rule 46A. However on perusal of the impugned order, it may be noted that the Ld. CIT(A) has failed to record any finding either accepting or rejecting the additional evidence so submitted by the assessee.
A two-member bench comprising Shri Sanjay Garg, Jm & Shri Vikram Singh Yadav, Am observed that the additional evidence so submitted is critical and germane for deciding the matter under consideration and given that the assessment has been completed under section 144, the assessee deserves to be allowed an opportunity to furnish the necessary explanation and documentation in support of its claim for exemption under section 10(23C)(iiiad) of the Act.
In the interest of substantial justice, the Court admit the additional evidence and the matter is remanded to the file of the CIT(A) to examine the matter afresh after providing reasonable opportunity to the assessee. The contentions on merits are thus left open and not adjudicated upon. It would be open for the assessee to raise the same before the CIT(A) who shall consider and decide the same as per law.
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