DIRECTOR OF INCOME TAX Vs. MODERN CHARITABLE FOUNDATION

JUDGEMENT

(1.) The assessee is a Charitable Trust registered under the Societies Registration Act XXI of 1860. It had filed the return for the assessment year 1999-2000 declaring the income at nil, which was accepted by the Assessing Officer under Section 143(1)(a) of the Income Tax Act. However, thereafter, the assessment was re-opened by issuing a notice dated 30.3.2006 under Section 148 of the Act, on the basis of the information received from the Director of Income Tax (Investigation) that the assessee had received certain accommodation entries in its account on 08.1.1999. After the re-opening of the case, the Assessing Officer went through the records again and found that the assessee had taken donations in the sum of Rs. 53,52,900/- and unsecured loan of Rs. 1,14,58,500. The Assessing Officer asked the assessee to give details in respect thereof. A numbers of opportunities were provided by the Assessing Officer for this purpose but the assessee failed to avail the said opportunities and furnish the details thereof to the following effect:-

(2.) In these circumstances, the Assessing Officer passed re-assessment order treating the donations of Rs. 53,52,900/- and unsecured loan of Rs. 1,14,58,500 as undisclosed income and made the additions under Section 68 of the Income Tax Act.

(3.) The assessee filed an appeal there against before the CIT(A) and produced some documents/evidence for the first time before the CIT(A). On the evidence, the CIT(A) asked for remand report. The Assessing Officer in his remand report objected to the admission of the additional evidence on the ground that the requirements of Rule 46A of the Income Tax Rules were not satisfied as the assessee had failed to produce the same before the Assessing Officer in spite of various opportunities given and no reasons whatsoever were given by the assessee as to why such evidence could not be produced before the Assessing Officer, which the assessee is sought to produce before the CIT(A). However, the documents which were produced were not verified by the Assessing Officer and, therefore, he did not furnish any comments thereupon. The CIT(A) admitted the evidence and allowed the appeal of the assessee on the basis of the said additional evidence holding that on the basis of this evidence, the assessee was able to point out the source of donations as well as loans and how the said donations and loans were duly applied for the objective of the assessee/society.