The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) restored the trust’s corpus donation matter for a fresh hearing due to the trust’s non-compliance caused by the lack of awareness of notice and email id issues.
Batanagar Education and Research Trust, the assessee operates under the name Batanagar Institute of Engineering, Management, and Science. The assessee declared a total loss of Rs.6,41,07,639 in its income tax return for the financial year 2012-13.
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A survey under Section 133A of the Income Tax Act was conducted at the assessee’s premises, revealing allegations of misuse of funds and involvement in bogus donations. The assessee allegedly received RS. 1,23,87,550 as bogus donations from the School of Human Genetics & Population Health (SHG & PH) among others and voluntarily declared it as income.
SHG & PH admitted to engaging in such transactions through a Settlement Commission application. The Assessing Officer (AO) found donations were accommodation entries, not voluntary or genuine, violations of the assessee’s objects under Sections 12AA and 80G, corpus donations were treated as regular income and included in total income.
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The Trust’s registration under Section 12AA was withdrawn due to money laundering activities and other irregularities. On appeal, the Commissioner of Income Tax (Appeals) [CIT(A)] dismissed the case due to non-compliance by the assessee.
Before ITAT, the assessee submitted the reasons for the non-appearance and non-compliance. The assessee’s counsel submitted that notices issued under Section 250 were sent to the incorrect email ID and not communicated to the Trust’s management by the external Chartered Accountant handling tax matters.
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The assessee submitted that they updated their email IDs on the e-filing portal to ensure future communication is received properly. The assessee’s counsel requested a fair opportunity to present relevant facts and documents in the appeal process.
The two-member bench comprising Rajesh Kumar (Accountant Member) & Pradip Kumar Choubey (Judicial Member)observed that the appeal was dismissed by the CIT(A) solely on the ground of non-compliance by the assessee.
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The tribunal observed that the assessee was not given an opportunity to present facts and documents before the CIT(A). So, the tribunal concluded that the appeal should be restored to the CIT(A) for fresh adjudication. The tribunal directed the CIT(A) to allow the assessee to present its submissions and supporting documents.
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