2013 (7) TMI 89 - HC - Income Tax

Non-Service of rejection orders - Tribunal denied benefit of Section 80G to assessee - Held that - no material to controvert the allegation of the assessee about the non-furnishing of the copies of the statement recorded as well as the records seized and in fact, it is a matter of record that the Income Tax Appellate Tribunal itself has pointed out about the non-furnishing of the copies of the seized records to the assessee-Trust - Matter is remanded back to the Commissioner of Income Tax.

Summary

Issues:
1) Denial of benefit under Section 80G
2) Upholding order based on material not furnished to assessee
3) Denial of exemption under Section 80G due to undisclosed income of Chairman

Analysis:
1) The case involves the denial of the benefit of Section 80G to the assessee. The Tribunal upheld the denial, leading to the appeal. The Trust, a Public Charitable Trust registered under Section 12A of the Income Tax Act, sought renewal of approval under Section 80G(5)(vi). However, the approval was refused, prompting the appeal against the Tribunal's decision.

2) Another issue raised was the Tribunal's decision based on material not provided to the assessee. Following a search at the premises of the assessee and the Trustee, certain documents were seized. The assessee requested copies of the seized records and statements but was denied. The Tribunal considered the lack of objection from the assessee earlier and upheld the decision, leading to a challenge on the grounds of natural justice violation.

3) Additionally, the Tribunal's decision to deny the exemption under Section 80G due to the undisclosed income of the Chairman of the Board of Trustees was questioned. The Tribunal did not investigate the Chairman's personal sources of income, leading to a contention on the validity of denying the exemption solely based on the Chairman's undisclosed income.

4) The Court acknowledged the lack of furnishing the seized records to the assessee and the Tribunal's observation on the same. The Senior Counsel for the assessee highlighted the subsequent appeal success and the non-furnishing of seized materials until later. The Court noted the absence of evidence to dispute the non-furnishing of documents to the assessee.

5) Ultimately, due to the reliance on seized materials and the failure to provide copies to the assessee, the Court remanded the matter back to the Commissioner of Income Tax for reconsideration in compliance with the principles of natural justice. The Tax Case Appeal was disposed of accordingly without costs.