Rekha Goenka, CHENNAI V. ITO, CHENNAI

ITA 2244/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9119 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-04-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 11-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MURALI MOHAN
• Assessee Lawyers: F C JAIN
• Keywords: Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI ... , ! ' #, % &' BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ ITA NO.2244/MDS/2015 ) *) / ASSESSMENT YEAR : 2011-12 MRS. REKHA GOENKA, 11, KONDI CHETTY STREET, PARRYS, CHENNAI - 600 001. PAN : AACPG 1362 M V. THE INCOME TAX OFFICER, NON CORPORATE WARD 3(2), CHENNAI - 600 034. (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI F.C. JAIN, CA ./,- 0 1 / RESPONDENT BY : SHRI MURALI MOHAN, JCIT 2 0 3% / DATE OF HEARING : 27.04.2016 45* 0 3% / DATE OF PRONOUNCEMENT : 01.06.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, CHENNAI , DATED 14.10.2015 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2. SHRI F.C. JAIN, THE LD. REPRESENTATIVE FOR THE A SSESSEE, SUBMITTED THAT THE ASSESSEE DONATED AN AMOUNT OF ` 20,00,000/-, 2 I.T.A. NO.2244/MDS/15 DURING THE YEAR UNDER CONSIDERATION, TO A CHARITABL E INSTITUTION KNOWN AS SOCIETY FOR WELFARE OF THE HANDICAPPED PE RSONS AT DURGAPUR. THE DONATION WAS, IN FACT, TRANSFERRED B Y RTGS MODE ON 30.03.2011 THROUGH A BANK ACCOUNT MAINTAINED WITH I NDIAN BANK, HARBOUR BRANCH, CHENNAI. THE ASSESSING OFFICER BY PLACING RELIANCE ON THE LETTER DATED 24.03.2014, SAID TO BE RECEIVED FROM THE SOCIETY FOR WELFARE OF THE HANDICAPPED PERSONS, DUR GAPUR, KOLKATA, DISALLOWED THE CLAIM OF THE ASSESSEE. THE RECIPIENT-SOCIETY DENIED THE RECEIPT OF ` 20,00,000/- BY LETTER DATED 03.02.2014 AND THE DONATION HAS NOT REACHED THE BENEFICIARY SOCIET Y. THE ASSESSING OFFICER HAS ALSO OBSERVED THAT THE SOCIET Y DENIED HAVING A BANK ACCOUNT WITH AXIS BANK, KOLKATA. THE ASSESS ING OFFICER WITHOUT GIVING A COPY OF THE SO-CALLED LETTER SAID TO BE RECEIVED FROM THE SOCIETY ON 24.03.2014, PASSED THE ASSESSMENT OR DER ON THE VERY SAME DAY, I.E. ON 24.03.2014. THE LD. REPRESE NTATIVE FURTHER SUBMITTED THAT THE ASSESSING OFFICER REPRODUCED COP Y OF THE LETTER AT PAGE 4 OF THE ASSESSMENT ORDER. AFTER RECEIVING TH E ASSESSMENT ORDER ONLY, THE ASSESSEE CAME TO KNOW THAT THERE WA S A LETTER FROM THE SOCIETY CLAIMING THAT A BANK ACCOUNT WAS OPENED IN THE AXIS BANK WITH THE HELP OF SOME MISCREANTS. 3 I.T.A. NO.2244/MDS/15 3. THE LD. REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE WAS ABLE TO OBTAIN THE BANK STATE MENT FROM AXIS BANK IN RESPECT OF THE ACCOUNT TO WHICH THE MONEY W AS TRANSFERRED. THE ASSESSEE HAS FILED A COPY OF THE BANK STATEMENT FROM THE AXIS BANK. ACCORDING TO THE LD. REPRESENTATIVE, THE REC IPIENT-SOCIETY IN FACT RECEIVED FUNDS FROM THE VERY SAME ACCOUNT AND FUNDS WERE ALSO TRANSFERRED TO THE RECIPIENT-SOCIETYS ACCOUNT FROM THIS ACCOUNT. THEREFORE, THERE WAS A TRANSACTION BETWEEN THE RECI PIENT-SOCIETY FROM AND OUT OF THE BANK ACCOUNT TO WHICH THE ASSES SEE HAS TRANSFERRED THE FUNDS. THEREFORE, THE LETTER DATED 24.03.2014 CLAIMING THAT THERE WAS NO SUCH BANK ACCOUNT FOR TH E RECIPIENT- SOCIETY IS NOT CORRECT. SINCE THE ASSESSEE HAS PAI D THE MONEY TO AN APPROVED INSTITUTION ENGAGED ITSELF IN CHARITABLE A CTIVITY, THE SAME IS ELIGIBLE FOR DEDUCTION WHILE COMPUTING THE TAXABLE INCOME. 4. ON THE CONTRARY, SHRI MURALI MOHAN, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSING OFFICE R MADE ELABORATE ENQUIRY. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE RECIPIENT-SOCIETY, NAMELY, SOCIETY FOR WELFARE OF THE HANDICAPPED PERSONS, DURGAPUR, KOLKATA, WAS AN APPROVED SOCIETY FOR THE PROJECTS UNDER SECTION 35(1)(II) OF THE ACT. THE RECIPIENT-SOCIETY BY LETTER DATED 24.03.2014, CLARI FIED THAT THEY DO 4 I.T.A. NO.2244/MDS/15 NOT HAVE ANY ACCOUNT IN AXIS BANK. THE AXIS BANK A CCOUNT WAS OPENED WITH THE HELP OF SOME MISCREANTS, INCLUDING THE BANK OFFICIALS. THE RECIPIENT-SOCIETY HAS ALSO INFORMED THE ASSESSING OFFICER THAT THEY HAVE ALREADY LODGED COMPLAINT WIT H THE POLICE AND THE MATTER WAS BEING INVESTIGATED BY CRIMINAL INVES TIGATION DEPARTMENT OF THE WEST BENGAL POLICE. THE RECIPIEN T-SOCIETY HAS ALSO INFORMED THE ASSESSING OFFICER THAT THE MATTER WAS ALSO INFORMED TO THE RESERVE BANK OF INDIA. THEREFORE, IT WAS OBVIOUS THAT THE BANK ACCOUNT WAS OPENED IN A FRAUDULENT MA NNER WITH AXIS BANK AND THE SOCIETY FOR WELFARE OF THE HANDICAPPED PERSONS, DURGAPUR, WHICH OBTAINED THE APPROVAL UNDER SECTION 35 OF THE ACT WAS NOT THE REAL BENEFICIARY OF THE BANK ACCOUNT TO WHICH THE MONEY WAS TRANSFERRED BY THE ASSESSEE. ON A QUERY FROM T HE BENCH WHEN THE LETTER OF THE RECIPIENT-SOCIETY IS DATED 24.03. 2014, HOW THE ASSESSING OFFICER WAS ABLE TO INCORPORATE THE SAME AS PART OF THE ASSESSMENT ORDER? THE LD. REPRESENTATIVE CLARIFIED THAT THE ASSESSING OFFICER MIGHT HAVE RECEIVED THE SAME BY F AX OR E-MAIL. THE LD. REPRESENTATIVE FURTHER CLARIFIED THAT SINCE THE RECIPIENT- SOCIETY BY LETTER DATED 03.02.2014, CLARIFIED THAT THEY HAVE NOT RECEIVED ANY DONATION FROM THE ASSESSEE BY GIVING A COPY OF LETTER DATED 24.03.2014, THE ASSESSEE MAY NOT BE ABLE TO I MPROVE THE 5 I.T.A. NO.2244/MDS/15 CASE ANY FURTHER. THEREFORE, EVEN ASSUMING FOR ARG UMENT SAKE THAT A COPY OF THE LETTER DATED 24.03.2014 WAS NOT FURNI SHED TO THE ASSESSEE, THE SAME MAY NOT VITIATE THE ASSESSMENT P ROCEEDING. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER INCORPORATED THE COPY OF THE LETTERS SAID T O BE WRITTEN BY THE SOCIETY FOR WELFARE OF THE HANDICAPPED PERSONS, DUR GAPUR, KOLKATA DATED 03.02.2014 AND 24.03.2014 AS PART OF THE ASSESSMENT ORDER. THE ASSESSEE CLAIMS THAT THE LET TER DATED 24.03.2014 WAS NOT FURNISHED TO HER. ADMITTEDLY, T HE LETTER WAS DATED 24.03.2014 AND THE ASSESSMENT ORDER WAS ALSO PASSED ON 24.03.2014. THEREFORE, THE ASSESSING OFFICER MIGHT NOT HAVE GIVEN THE COPY OF THE LETTER DATED 24.03.2014 TO THE ASSE SSEE. EVEN ASSUMING FOR ARGUMENT SAKE THAT A COPY OF THE LETTE R WAS FURNISHED TO THE ASSESSEE ON 24.03.2014, THE ASSESSEE WOULD N OT HAVE HAD TIME TO RESPOND TO THE LETTER SINCE THE ASSESSMENT ORDER WAS PASSED ON 24.03.2014 ITSELF. 6. THE LD. DEPARTMENTAL REPRESENTATIVE CONTENDS BEF ORE THIS TRIBUNAL THAT NON-FURNISHING OF LETTER DATED 24.03. 2014 MAY NOT PREJUDICE THE INTEREST OF THE ASSESSEE. WE HAVE CA REFULLY GONE 6 I.T.A. NO.2244/MDS/15 THROUGH THE LETTER OF THE SOCIETY DATED 24.03.2014, WHICH WAS INCORPORATED BY THE ASSESSING OFFICER IN THE IMPUGN ED ASSESSMENT ORDER. THIS LETTER CLARIFIES THAT THE RECIPIENT-SO CIETY DOES NOT HAVE ANY BANK ACCOUNT IN AXIS BANK AND THE ACCOUNT IN TH E AXIS BANK WAS OPENED WITH THE HELP OF SOME MISCREANTS, INCLUD ING THE BANK OFFICIALS. THIS LETTER FURTHER DISCLOSES THE PENDE NCY OF THE CRIMINAL CASE. IT IS FURTHER CLARIFIED THAT THE RECIPIENT-S OCIETY MAINTAINED ONE ACCOUNT WITH STATE BANK OF INDIA IN DURGAPUR, KOLKA TA. HOWEVER, THE ASSESSEE CLAIMS THAT THE FUNDS WERE TRANSFERRED FROM THE SO- CALLED AXIS BANK ACCOUNT TO THE ACCOUNT OF THE SOCI ETY WITH STATE BANK OF INDIA. THIS CLAIM OF THE ASSESSEE APPARENT LY WAS NOT EXAMINED BY THE LOWER AUTHORITIES. THIS TRIBUNAL I S OF THE CONSIDERED OPINION THAT WHEN THE SOCIETY CLAIMS THA T THEY HAVE NO ACCOUNT IN AXIS BANK, HOW THE FUNDS WERE TRANSFERRE D FROM THAT ACCOUNT TO STATE BANK OF INDIA ACCOUNT NEEDS TO BE EXAMINED. MOREOVER, WHEN THE ASSESSING OFFICER RECEIVED A LET TER DATED 24.03.2014 FROM THE SOCIETY, THE COPY OF THE SAME S HALL BE FURNISHED TO THE ASSESSEE. SINCE THE COPY OF THE L ETTER WAS NOT FURNISHED, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THERE WAS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. WHEN T HE ASSESSING OFFICER RECEIVED A LETTER FROM THE RECIPIENT-SOCIETY CLAIMI NG THAT THEY HAVE 7 I.T.A. NO.2244/MDS/15 NO BANK ACCOUNT IN AXIS BANK AND THE ONLY ONE BANK ACCOUNT IS MAINTAINED WITH STATE BANK OF INDIA, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER OUGHT TO HAVE GIVEN AN OPPORTUNITY TO THE ASSESSEE TO RESPOND TO THE AB OVE CLAIM OF RECIPIENT-SOCIETY. SINCE SUCH AN OPPORTUNITY WAS N OT GIVEN TO THE ASSESSEE, THIS TRIBUNAL IS OF THE CONSIDERED OPINIO N THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER A FTER FURNISHING A COPY OF THE LETTER DATED 24.03.2014 TO THE ASSESSEE . ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE A ND THE ASSESSING OFFICER IS DIRECTED TO FURNISH A COPY OF THE LETTER DATED 24.03.2014 SAID TO BE RECEIVED FROM THE SOCIETY FOR WELFARE OF THE HANDICAPPED PERSONS, DURGAPUR, KOLKATA AND THEREAFT ER DECIDE THE ISSUE AFTER GIVING REASONABLE OPPORTUNITY TO THE AS SESSEE. IT IS MADE CLEAR THAT THIS TRIBUNAL IS NOT COMMENTING UPO N THE MERIT OF THE ADDITION MADE BY THE ASSESSING OFFICER AND IT I S FOR THE ASSESSING OFFICER TO DECIDE THE SAME IN ACCORDANCE WITH LAW WITHOUT BEING INFLUENCED BY ANY OF THE OBSERVATION MADE BY THE CIT(APPEALS) AND MADE BY THIS TRIBUNAL IN THIS ORDE R. 7. WITH THE ABOVE OBSERVATION, THE APPEAL OF THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8 I.T.A. NO.2244/MDS/15 ORDER PRONOUNCED ON 1 ST JUNE, 2016 AT CHENNAI. SD/- SD/- ( ! ' # ) ( ... ) (CHANDRA POOJARI) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 1 ST JUNE, 2016. KRI. 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-4, CHENNAI-34 4. PRINCIPAL CIT-5, CHENNAI 5. 9< .3 /DR 6. =) > /GF.