Bankim Education Trust Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad remands case of Charitable trust – Addition based on Third-party Search Without Sharing Evidence is Not Valid
Assessee is a charitable education trust. Assessment for A.Y. 2010-11 was reopened u/s 147 based on search in Sigma Group, where an employee allegedly stated that ₹2.24 crore was paid to Assessee for change of management. The trust denied any such transaction & requested copies of the statement & documents, but AO never provided them. Despite this, AO made a huge addition of ₹2,24,97,980 & CIT(A) dismissed the appeal ex-parte without examining merits.
Assessee appealed to the ITAT with a delay of 180 days. The delay was condoned as the authorised CA was seriously ill.
Before ITAT, Assessee requested one more opportunity before CIT(A) to present evidence since the case was never decided on merits. Even the Departmental Representative had no objection to remand.
However, ITAT noted that Assessee was given six opportunities by CIT(A) & still failed to appear. Therefore, ITAT imposed a cost of ₹5,000 payable to the PM National Relief Fund for non-compliance.
ITAT’s Key Observations:
- CIT(A) dismissed appeal without deciding merits, which is improper.
- Addition was made on the basis of a third-party statement, but copy of statement & seized documents were never provided.
- Principles of natural justice violated. Assessee must get a proper chance to rebut or cross-examine.
ITAT Order:
