ITO Vs Achula Darneichong Sailo (ITAT Kolkata)
The Income Tax Appellate Tribunal (ITAT) Kolkata has set aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)] in the case of ITO vs. Achula Darneichong Sailo regarding income tax exemption under Section 10(26) of the Income Tax Act, 1961. The case involved the late Dr. John Lalremsiama Sailo Ryntathiang, a Scheduled Tribe doctor running Bethany Hospital in Shillong, whose income was claimed as exempt under the provision. The Revenue contested the CIT(A) order, arguing that the exemption was granted without verifying the sources of income, including substantial cash deposits amounting to ₹2.43 crores and high-value banking transactions. ITAT observed that the lower authority had not sufficiently examined whether the income accrued from exempt sources, leading to the decision being set aside for a fresh review.
The Tribunal noted procedural lapses, particularly in verifying whether the hospital’s revenue and professional fees fell within the exemption criteria. It also highlighted that previous assessments granting similar exemptions did not automatically apply to later years. Since the legal heir of the deceased doctor faced technical issues with the tax portal, preventing timely responses, ITAT ruled that the appeal process be conducted afresh. The case is now remanded to CIT(A) for a de novo review, allowing the taxpayer to present additional evidence supporting the exemption claim under Section 10(26).
