Gayatri Anand Education Society Vs. ITO (ITAT Delhi)
Cross-Examination Denied & Evidence Ignored – Tribunal Remands Bogus Donation Addition Assessee, registered charitable society, filed NIL return claiming exemption u/s 11. Based on information from Mumbai Investigation Wing about alleged bogus donations from Podar Group, AO reopened assessment u/s 147 & assessed income at ₹5.90 crores, adding (i) ₹1.50 crores as bogus donation & (ii) ₹4.40 crores corpus donation as revenue receipt. AO relied only on third-party statement of Mr. Kiritkumar Suba recorded u/s 131 during Podar survey, without granting cross-examination. CIT(A)/NFAC upheld AO’s order & also rejected additional evidence (confirmations from 47 donors) under Rule 46A, alleging they were written by the same person.
Before Tribunal, Assessee argued that donations were received via banking channels & confirmations were available. It relied on SC rulings in Khader Khan Son (statements not evidence without corroboration) & Andaman Timber (cross-examination mandatory). It also cited coordinate bench decision in Podar Group’s own case where donations were held genuine.
Tribunal observed that both AO & CIT(A) failed to conduct independent inquiry or verification with donors before treating donations as bogus. Since assessee had produced confirmations, outright rejection was unjustified. In the interest of justice, Tribunal restored the matter to AO, directing:
- Assessee to produce all documentary evidence,
- AO to conduct independent enquiry with donors,
- Proper opportunity of hearing to be given.
Accordingly, Tribunal set aside CIT(A)’s order & remanded matter to AO for de novo assessment, allowing appeal partly for statistical purposes
