CIT (Exemptions) Vs Hamdard Laboratories (India) (Delhi High Court)
Delhi High Court held that AO is required to bring on record cogent evidence to justify the invocation of Section 13 of the Income Tax Act to deny exemption. Notably, material collected from the internet cannot be termed as corroborative piece of evidence. Accordingly, writ of revenue dismissed.
Facts- Respondent/Assessee is a Trust registered u/s. 12A of the IT Act. The case was selected for scrutiny by the AO. Notably, the two properties were provided for use to the trustees and their families at a consolidated lease rent of Rs.90,000/- per month. The AO held that the provisions of Section 13(2)(b) of the IT Act would disentitle the Respondent/Assessee from availing exemption u/s. 11 and 12 of the IT Act.
CIT(A) held that respondent/assessee is a charitable institution, eligible for exemption u/s. 10(23C)(iv) or u/s. 11 and 12 of the IT Act. Tribunal decided the appeal is favour of the assessee. Being aggrieved, revenue has preferred the present writ.
Conclusion- The CIT(A) noted that the law required the AO to bring on record cogent evidence to justify the invocation of Section 13 of the IT Act to deny exemption, and the material collected from the internet cannot be termed as corroborative piece of evidence. Comparison made with the online inquiries, done by the AO, was not tenable.
