Anjuman E Farogh E Islam Trust Vs ITO (ITAT Mumbai)
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has set aside an order passed by the Additional/Joint Commissioner of Income Tax (Appeals)-1, Gurugram, concerning the Anjuman E Farogh E Islam Trust for the assessment year 2014-15. The ITAT’s decision effectively restores the appeal to the appellate authority for fresh adjudication, emphasizing the need to provide the trust with a sufficient opportunity to present its case and supporting documentation for claimed expenses.
The case stems from an assessment initiated under Section 147 of the Income Tax Act, 1961, after information regarding the trust’s corpus fund and its claim for exemption under Section 11 was passed on to the Assessing Officer (AO) following the rejection of its application for registration under Section 12A. Despite the issuance of statutory notices, the trust reportedly did not furnish the details requested. Consequently, the AO completed the assessment under Section 144 read with Section 147, assessing the total income at ₹10,57,298 based on the gross donation income declared in the return, as no details of claimed expenses of ₹10,25,123 were provided.
The Additional/Joint CIT(A) subsequently dismissed the trust’s appeal, primarily on the grounds that the trust was not eligible for exemption under Sections 11 and 12 for the assessment year 2014-15 as its registration under Section 12A was granted only on October 31, 2017. The appellate authority also noted the trust’s failure to submit details of expenses during the assessment proceedings or the appeal process, despite being asked to do so.
However, before the ITAT, the trust’s representative argued that while submissions were filed with the appellate authority, the trust believed the case would be sent back to the AO for further examination of the expenses. It was also contended that the AO issued a show cause notice on November 18, 2018, and passed the assessment order just two days later, on November 20, 2018, leaving inadequate time for a response. The representative further stated that the trust maintains audited books of accounts, which are also filed with the Charity Commissioner, and expressed a willingness to provide all necessary documents if granted an opportunity.
Considering the submissions and the material on record, the ITAT found it appropriate to restore the appeal to the file of the Additional/Joint CIT(A). The tribunal directed the appellate authority to allow the trust to furnish all documents and evidence supporting its claim of expenditure and emphasized that a reasonable and adequate opportunity for a hearing must be provided before passing any fresh order. The ITAT also granted the appellate authority the liberty to seek a remand report from the AO to verify the documents submitted by the trust. With these directions, the ITAT set aside the impugned order, allowing the grounds of appeal for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
