INCOME TAX OFFICER, VARANASI V. NEONATAL HEALTH ACADEMY, VARANASI

ITA 132/VNS/2024

AI Insights

The case involves two appeals by the Revenue against the orders of the Commissioner of Income Tax (Appeals) concerning the disallowance of conference and seminar expenses claimed by the Neonatal Health Academy for the assessment year 2019-20. The Assessing Officer initially disallowed the expenses due to lack of substantiating details, which were later accepted by the CIT(A) based on additional evidence provided by the assessee. The Revenue challenged this acceptance, arguing that the additional evidence was not properly scrutinized and that the Assessing Officer was not given a chance to examine these details. The Tribunal agreed with the Revenue's position, leading to the restoration of the matter to the Assessing Officer for a thorough examination of the additional evidence and a new decision.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826275 (ITAT-VARANASI)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2026
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2019-2020
• Appeal Filed On: 24-07-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G. P. SINGH
• Assessee Lawyers: MUKESH SRIVASTAVA
• Keywords: Set aside; Additional evidence; Competent authority; Charitable institution
• Section: 143(3)

Judgement Text

"P a g e | 1 IN THE INCOME TAX APPELLATE TRIBUNAL VARANASI CIRCUIT BENCH, VARANASI BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER I.T.A. Nos.131 & 132/VNS/2024 Assessment Year:2019-20 Income Tax Officer, Varanasi. Vs. Neonatal Health Academy, C 29/61 A KH 1, Gaghubeer Maldahiya, Varanssi-221001 PAN:AABTN8789Q (Appellant) (Respondent) O R D E R PER ANADEE NATH MISSHRA:A.M. (A) These two appeals have been filed by Revenue pertaining to assessment year 2019-20 against the respective impugned appellate orders dated 30/05/2024 (DIN & Order No.ITBA/NFAC/S/250/2024- 25/1065255186(1) and dated 31/05/2024 (DIN & Order No. ITBA/NFAC/S/250/2024-25/1065294908(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. The grounds of appeal are as under: Appellant by Shri G. P. Singh, D.R. Respondent by Shri Mukesh Srivastava, Advocate Printed from counselvise.com P a g e | 2 I.T.A. No.131/Varanasi/2024 “1. The learned CIT(A) has failed to appreciate the facts that the addition of Rs.2,34,93,962/- was made by the Assessing Officer under the head conference and seminar expenses as assessee failed to substantiate the same with support of documentary evidences during the course of assessment proceedings even after being provided with multiple opportunities. 2. Because the learned CIT(A) has wrongly accepted the submission of the assessee wherein the assessee has furnished improper details (not supported by documentary evidences) before him. Moreover, the learned CIT(A) has stated in the order that the Assessing Officer had not given a finding that conferences and seminars were not organized by the appellant in the state of UP. In this regard, it is pertinent to note that onus lies on the assessee to prove that the expenditure was incurred for defined purpose only, when the assessee discharges this onus, the assessee would be entitled to deduction under I. T. Act and in the case of assessee and in case of assessee no factual condition was laid by the assessee to establish the genuineness of the expenditure said to have incurred for conference/seminar for charitable purpose. Further, learned CIT(A) has laid great emphasis and relied heavily upon the fact that the payments of the expenses claimed had been made through banking channel. In this context, it is worthwhile to note that the fact that the amount is paid through banking channel does not make the transaction genuine. The assessee needs to explain the transaction properly based on the documents within the parameters of relevant section of I. T. Act. 3. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in law and on the facts that the order of the Assessing Officer was not justified.” I.T.A. No.132/Varanasi/2024 “1. The Ld. CIT(A) has failed to appreciate the facts that the penalty U/s 270 A of the Income Tax Act, 1961 of Rs.1,71,07,822/- was imposed by the AO on the basis of addition made during the course of assessment proceeding after obtaining approval from the competent authority. It is pertinent to note that during the course of assessment proceedings, addition of Rs.2,34,93,962/- Printed from counselvise.com P a g e | 3 was made on account of expenses claimed under the head conference and seminar expenses. This amount of Rs.2,34,93,962/- remained unexplained during the course of assessment proceeding for want of detail and valid explanation from the assessee .In this regard, onus lies on the assessee to prove that the expenditure was incurred for defined purpose only, when the assessee discharges this onus, the assessee would be entitled to deduction under IT ACT, 1961 and in the case of assessee ,no factual condition was laid by the assessee to establish the genuineness of the expenditure said to have incurred for conferences/seminar.” (A.1) For the sake of convenience and brevity; these two appeals are being disposed of through this consolidated order. (B) First we take up the quantum appeal in I.T.A. No.131/Varanasi/2024 . In this case the assessee filed its return of income on 31/10/2019 declaring total income of Rs.32,80,500/-. The Assessing Officer completed the assessment and passed assessment order under section 143(3) read with section 144B of the I. T. Act on 28/09/2021 and determined the total income of the assessee at Rs.2,67,74,462/-, disallowing the assessee’s claim of conference and seminar expenses amounting to Rs.2,34,93,962/-. The disallowance was made by the Assessing Officer on the ground that the assessee did not furnish any details/explanation during the assessment proceedings. The relevant portion of the assessment order is reproduced below: Printed from counselvise.com P a g e | 4 (B.1) The assessee’s appeal against the aforesaid addition of Rs.2,34,93,962/- was allowed by the learned CIT(A) vide impugned appellate order dated 30/05/2024. Based on the details filed during appellate proceedings and the observations of the learned CIT(A) that the assessee was a nonprofit organization in promotion of neonatal health, and further that the payments of the expenses were made through banking channel. The relevant portion of the order of the learned CIT(A) is reproduced below: Printed from counselvise.com P a g e | 5 and the payments of the expenses claimed have been made through banking channel, it is held that the expenditure of Rs.2,34,93,962/- under the head ‘Conference and Seminar Expenses’ have been incurred by the appellant for The purpose of it’s object. Therefore, the disallowance of Rs.2,34,93,962/- Made by the Assessing Officer is not sustainable and hereby deleted. (B.2) The Revenue is in appeal against the aforesaid impugned appellate order of learned CIT(A). At the time of hearing, learned Departmental Representative submitted that the assessee did not furnish any details/explanation during the assessment proceedings. He also submitted that the learned CIT(A) admitted additional evidence, as referred to in paragraph 5.4 of the impugned appellate order of the learned CIT(A). He further submitted that the learned CIT(A) did not provide opportunity to the Assessing Officer to examine the details filed by the assessee during appellate proceedings before the learned CIT(A). He moreover submitted that the additional evidence as referred to in paragraph 5.4 of the impugned appellate order of learned CIT(A), which were admitted by the learned CIT(A), should be subjected to examination and scrutiny of the Assessing Officer. For this purpose, he submitted further, that the disputed matter regarding the disallowance and consequent addition of aforesaid amount of Rs.2,34,93,962/- should be restored back to the file of the Assessing Officer Printed from counselvise.com P a g e | 6 to enable the Assessing Officer to examine the additional evidences filed by the assessee during the appellate proceedings before the learned CIT(A). (C) We have heard both sides. We have perused the materials on record. We are in agreement with the submissions made by the learned D.R. that the additional evidence filed by the assessee during appellate proceedings before the learned CIT(A) should be subjected to scrutiny and examination by the Assessing Officer. In coming to this conclusion, we are guided by provisions of Rule 46A(3) of the Income Tax Rules, reproduced below for the ease of reference: Rule 46(A) (3) The 84[Joint Commissioner] (Appeals) or, as the case may be, the Commissioner (Appeals)] shall not take into account any evidence produced under sub-rule (1) unless the Assessing Officer has been allowed a reasonable opportunity— (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. (C.1) Even if the additional evidences were admitted by the learned CIT(A) under Rule 46A(4) of the Income Tax Rules, the learned CIT(A) failed in examining the merits of the additional evidences on his own as well as in getting these evidences examined by the Assessing Officer. The learned CIT(A) merely states that the Assessing Officer has not done any verification of expenses; and that the Assessing Officer has not given a finding that Conference and Seminar Expenses were not organized by the appellant in the state of Uttar Pradesh. However, the learned CIT(A) also failed in doing the same either on his own; or through a remand. The mere fact that the assessee is a non profit organization and the payments have been made through banking channel is not sufficient to establish the genuineness of the Printed from counselvise.com P a g e | 7 entire claim of expenses, or to establish that the entire expenses were incurred wholly and exclusively for charitable purposes of the assessee. In view of the foregoing, the dispute regarding the aforesaid addition is restored back to the file of the Assessing Officer with the direction to pass de novo order in accordance with law after taking into consideration all relevant materials including the additional evidence filed by the assessee during the appellate proceedings before the learned CIT(A) and after providing reasonable opportunity to the assessee. (D) As regards I.T.A. No.132/Varanasi/2024 regarding imposition of penalty by the Assessing Officer, the same is consequential in nature and the fate of penalty will depend upon the outcome of the order to be passed by learned CIT(A). Accordingly, the impugned orders of the learned CIT(A) is set aside and matter regarding penalty u/s 270A of I. T. Act is also restored back to the file of the Assessing Officer with the direction to pass de novo order in accordance with law after providing reasonable opportunity to the assessee, and after passing de novo assessment order as directed under foregoing paragraph (C.1) of this order. (E) All the grounds of appeal are treated as disposed of in accordance with our directions contained in foregoing paragraphs (C.1) and (D) of this order. (F) In the result, for statistical purposes, both appeals are partly allowed. (Order pronounced in the open court on 05/01/2026) Sd/. Sd/. (KUL BHARAT) (ANADEE NATH MISSHRA) Vice President Accountant Member Dated:05/01/2026 *Singh Printed from counselvise.com P a g e | 8 Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. D.R., I.T.A.T. Printed from counselvise.com "