Prithvi Softech Ltd Now Known as Prithvi Exchange (India) Ltd., CHENNAI V. ITO Corporate Ward 1(1), CHENNAI

ITA 2414/CHNY/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1011 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 03-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMOL B KIRTANE
• Assessee Lawyers: D ANAND
• Keywords: Principle of natural justice; Wrong claim

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . , ! '# $ , BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ I.T.A.NOS.2414 & 2415/CHNY/2017 / ASSESSMENT YEARS :2012-13 & 2013-14 M/S.PRITHVI SOFTECH LTD., [ NOW KNOWN AS M /S.PRITHVI EXCHANGE (INDIA) LTD., ] NO.11, EAST SPUR TANK ROAD, CHETPET, CHENNAI 600 031. VS. THE INCOME TAX OFFICER, CORPORATE WARD 1(1), CHENNAI.600 034. [PAN AAACO 1097 L ] ( $% / APPELLANT) ( &'$% /RESPONDENT) / APPELLANT BY : MR.D.ANAND,ADVOCATE /RESPONDENT BY : MR.AMOL B.KIRTANE, JCIT,D.R ! ' #$% / DATE OF HEARING : 18 - 0 9 - 201 8 &' #$% / DATE OF PRONOUNCEMENT : 18 - 0 9 - 201 8 ( / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAI NST THE COMMON ORDER OF THE COMMISSIONER OF INCOME-TAX (APP EALS)-3, ITA NOS.2414 & 2415/CHNY/2017 :- 2 -: CHENNAI IN APPEAL NOS.127 & 138/2016-17/A-3, DATED 30.06.2017 FOR THE ASSESSMENT YEARS 2012-13 AND 2013-14. 2. MR.D.ANAND REPRESENTED ON BEHALF OF THE ASSESSEE, AND MR.AMOL B. KIRTANE REPRESENTED ON BEHALF OF THE REVENUE. 3. AS BOTH THE APPEALS INVOLVED IDENTICAL ISSUE, THE S AME IS DISPOSED OFF BY THIS COMMON ORDER. 4. IT WAS SUBMITTED BY LD.A.R THAT THE ONLY ISSUE IN THE ASSESSEES APPEAL WAS AGAINST THE ACTION OF LD.CIT(A) IN CONFI RMING THE DISALLOWANCE OF CLAIM OF DEDUCTION U/S.35(1)(II) OF THE ACT IN RESPECT OF THE DONATION GIVEN BY THE ASSESSEE TO M/S.SCHOOL OF HUMAN GENETICS AND POPULATION HEALTH, KOLKATA (PAN:AABAS 4570 M). IT WAS A SUBMISSION THAT THE LD. ASSESSING OFFICER HAD RELIE D UPON THE STATEMENT RECORDED ON 27.01.2015 FROM SMT.SAMADIRTA MUKHERJEE SARDAR, SECRETARY OF THE TRUST. IT WAS A FURTHER SUBMISSIO N THAT ADMITTEDLY AN OPPORTUNITY OF CROSS-EXAMINATION HAD BEEN OFFERED T O THE ASSESSEE, THE SAME WAS GIVEN TO THE ASSESSEE AT KOLKATA AND T HE TIME PROVIDED WAS VERY SHORT. IT WAS A SUBMISSION THAT THE ASSES SEE HAD NO OBJECTION, IF THE ISSUE IN BOTH THE APPEALS WAS RES TORED TO THE FILE OF THE AO FOR RE-ADJUDICATION AFTER GRANTING THE ASSES SEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE ITS CASE. ITA NOS.2414 & 2415/CHNY/2017 :- 3 -: 5. IN REPLY, LD.D.R VEHEMENTLY SUPPORTED THE ORDER S OF THE LD. ASSESSING OFFICER AND THE LD.CIT(A). IT WAS A SUBM ISSION THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THE CO-ORDI NATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S.MEGATRENDS INC., CHENNA I VS. THE ACIT, CHENNAI IN ITA NOS.417 & 740/CHNY/2017 VIDE ORDER D ATED 05.03.2018 WHEREIN THE ISSUE HAS BEEN HELD AS FOLLOWS:- 11. COMING TO THE ISSUE OF THE DONATIONS IN RESPEC T OF WHICH, THE ASSESSEE HAS CLAIMED WEIGHTED DEDUCTION U/S.35(1)(II) OF THE ACT, IT IS NOTICED THAT THE AO HAS DISBELIEVED THE DONATIONS ON THE BASIS OF STATEMENT RECORDED FR OM ONE MR.SWAPAN RANJAN DAS GUPTA, ONE OF THE MAJOR SHAREH OLDERS OF HHBHRF AND ON ACCOUNT OF A LETTER FROM CROSS AND IN RESPECT OF M/S.SHGPH ON THE BASIS OF SURVEY REPORT. IT IS NOTICED THAT THE ONUS OF PROVING THE GENUINENESS OF THE DONATION RESTS ON THE ASSESSEE. HOWEVER, THE AO HA S TAKEN UP HIMSELF THE ONUS TO DISPROVE THE GENUINENESS OF THE DONATION MUCH BEFORE THE ASSESSEE HAS PROVED THE GENUINENESS OF THE DONATION. WHEN AN ASSESSEE STEPS FORWARD TO GIVE D ONATIONS OF RS.1.25 CRS, RS.25.00 LAKHS, RS.1.45 CRS. RESPECTIV ELY, THE ASSESSEE WOULD HAVE ADEQUATE REASONS TO GIVE SUCH D ONATIONS. HERE, IT IS NOTICED THAT THE ASSESSEE HAS NOT BEEN GIVEN ANY OPPORTUNITY TO PROVE THE GENUINENESS BUT THE ASSESS MENT HAS BEEN MADE BASED ON THE EVIDENCES COLLECTED BY THE R EVENUE IN THE COURSE OF THE SURVEY CONDUCTED ON THE RESPECTIV E ORGANIZATIONS. THIS IS NOT PERMISSIBLE. THIS BEIN G SO, IN THE INTEREST OF NATURAL JUSTICE, THE ISSUE OF THE GENUI NENESS OF THE DONATIONS ARE RESTORED TO THE FILE OF THE AO FOR RE -ADJUDICATION. THE AO MUST KEEP IN MIND THAT THE ONUS OF PROVING T HE DONATIONS ARE ACTUALLY DONATIONS AND NOT ACCOMMODAT ION ENTRIES AND THAT THE SAID ORGANIZATIONS WERE ELIGIB LE FOR CLAIMING DEDUCTION U/S.35(1)(II) OF THE ACT RESTS O N THE ITA NOS.2414 & 2415/CHNY/2017 :- 4 -: ASSESSEE. IF THE AO DOES HAVE ANY EVIDENCE TO THE C ONTRARY, IT IS TO BE PUT TO THE ASSESSEE FOR HIS REBUTTAL. THE ASSESSEE SHALL PRODUCE THE RECIPIENTS OF THE DONATION FOR EXAMINAT ION ALONG WITH THE EVIDENCES TO PROVE THE RECEIPT OF THE DONA TION. THE INTERNAL COMMUNICATIONS OF THE REVENUE ARE EVIDENCE S FOR DRAWING AN OPINION ON POSSIBLE WRONG CLAIMS BUT THE Y ARE NOT THE FINAL EVIDENCE. THIS BEING SO, THE ISSUE OF TH E DONATION IN THESE APPEALS ARE RESTORED TO THE FILE OF THE AO FO R RE- ADJUDICATION AFTER GRANTING THE ASSESSEE ADEQUATE O PPORTUNITY TO PROVE THE GENUINENESS OF THE DONATION. LD. DR SUBMITTED THAT THE ISSUE CAN BE RESTORED TO THE FILE OF AO FOR RE-ADJUDICATION IN LINE WITH THE DECISION OF THE TR IBUNAL CITED SUPRA. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ASSESSMENT ORDER IN THE ASSESSEES CASE FOR IMPUGNE D ASSESSMENT YEARS CLEARLY SHOWS THAT OPPORTUNITY OF CROSS EXAMI NATION HAS BEEN GRANTED TO THE ASSESSEE AT KOLKATA, AND ALSO THE TI ME PROVIDED IS ADMITTEDLY VERY SHORT. A PERUSAL OF THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S.MEGATRENDS INC. , REFERRED TO SUPRA CLEARLY SHOWS THAT THIS ISSUE HAS BEEN RESTORED TO THE FILE OF LD. ASSESSING OFFICER FOR RE-ADJUDICATION AFTER GRANTIN G THE ASSESSEE ADEQUATE OPPORTUNITY TO PROVE THE GENUINENESS OF TH E DONATION. 6.1 CONSIDERING THESE FACTS, WE ARE OF THE VIEW THA T THE ISSUE IN THESE TWO APPEALS IS LIABLE TO BE RESTORED TO THE F ILE OF LD. ASSESSING ITA NOS.2414 & 2415/CHNY/2017 :- 5 -: OFFICER FOR RE-ADJUDICATION AFTER GRANTING THE ASSE SSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE ITS CASE. IF THE LD. A SSESSING OFFICER PROPOSES TO RELY IN ANY EVIDENCES, WHICH IS AGAINST THE ASSESSEE, THE SAME SHALL BE PUT TO ASSESSEE FOR CROSS-EXAMINATION AND REBUTTAL. UNDER THESE CIRCUMSTANCES, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2012-13 AND 2013-14 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 18 TH SEPTEMBER, 2018, AT CHENNAI. SD/ - SD/ - ( () . +,+ ) ( ABRAHAM P GEORGE) ! / ACCOUNTANT MEMBER ( $ ) (GEORGE MATHAN) ) ! / JUDICIAL MEMBER . ' / CHENNAI / / DATED: 18 TH SEPTEMBER, 2018. K S SUNDARAM 0 #12 3 2# / COPY TO: 1 . / APPELLANT 3. ! 4# () / CIT(A) 5. 267 #8 / DR 2. / RESPONDENT 4. ! 4# / CIT 6. 79 :' / GF