Mrugeshbhai Ravindrabhai Desai Vs DCIT (ITAT Ahmedabad)
Income Tax Appellate Tribunal (ITAT) Ahmedabad addressed the appeal filed by Mrugeshbhai Ravindrabhai Desai against the disallowance of a ₹10 lakh donation under Section 35AC of the Income Tax Act, 1961, for the assessment year 2017-18. The case originated from an order by the National Faceless Appeal Centre (NFAC), Delhi, which upheld the Assessing Officer’s (AO) decision to disallow the deduction. The assessee had donated to Bharati Mahila Mandal, a trust alleged to be bogus, with reports indicating that donation receipts were issued upon payment of a 2% commission. The assessee contested the reopening of the case under Section 147, claiming procedural lapses, lack of inquiry, and denial of natural justice.
The ITAT found that both the AO and CIT(A) had not thoroughly examined the issue, as the assessee failed to appear during proceedings. Citing the need for fair inquiry, the ITAT restored the matter to the AO for reassessment. The AO is instructed to provide necessary documents and afford the assessee an opportunity to present evidence. The tribunal emphasized the importance of ensuring natural justice in the faceless appeal regime. Additionally, the counsel for the assessee agreed to contribute ₹2,000 to the Prime Minister’s National Relief Fund.
