2015 (2) TMI 445 - AT - Income Tax

Voluntary donations included in income of the assessee - registration under section 12A of the Act was not available with the assessee for the impugned assessment year. - Held that - Benefit of exemption under section 11 of the Act cannot be given to the assessee. Though the assessee has claimed that the donations were made to the assessee-society directly to the corpus and are not assessable to tax, but this argument can only be considered when the benefit of exemption under section 11 of the Act is available to the assessee. In the absence of any benefit of exemption under section 11 of the Act, this argument has no relevance and the entire receipts in the hands of the assessee are to be examined as a normal cash credit introduced in the books of account, for which assessee is required to furnish the relevant information with regard to the identity and creditworthiness of the creditors and genuineness of the transaction. But in the instant case, the assessee has not furnished the required information before the Assessing Officer and the Assessing Officer was constrained to treat the entire receipts as unexplained cash credit under section 68 of the Act, which was later on confirmed by the ld. CIT(A). Since the ld. CIT(A) has adjudicated the issue in the light of the relevant provisions of the Act, we find no infirmity therein. - Decided against assessee. Scope of Revision u/s 263 - Held that - Scope of jurisdiction of the Assessing Officer is limited and he cannot examine other issues of Advertisement expenses, Rent and other expenses which were not rather referred to in the order passed under section 263 of the Act. The other issues cannot be examined by the Assessing Officer while framing the assessment consequent to the order passed under section 263 of the Act. We, therefore, set aside the order of the ld. CIT(A) in this regard and delete the additions made on account of Advertisement, Rent and other expenses. - Decided in favour of assessee.

Summary

Issues:
1. Addition of donation amount in the income of the assessee.
2. Disallowance of expenses under different heads.

Analysis:
Issue 1: Addition of donation amount
The appellant contested the addition of &8377; 2,00,34,095 received as donation by the Assessing Officer. The Assessing Officer treated the donation as unexplained cash credit under section 68 of the Income-tax Act due to the lack of registration under section 12A, making the appellant ineligible for benefits under section 11. The ld. CIT(A) upheld the addition, stating that without registration under section 12A, the donations were to be treated as income. The Tribunal confirmed this decision, emphasizing the need for relevant information to verify the donations' identity, creditworthiness, and genuineness.

Issue 2: Disallowance of expenses
Regarding the disallowance of expenses under Advertisement, Rent, and other heads, the appellant argued that the Assessing Officer exceeded jurisdiction by considering these issues not referred to in the order under section 263 of the Act. The Tribunal agreed with the appellant, citing precedents that limit the Assessing Officer's scope to issues specified in the order under section 263. Consequently, the Tribunal set aside the ld. CIT(A)'s decision and deleted the additions made on account of Advertisement, Rent, and other expenses.

In conclusion, the Tribunal partially allowed the appeal, confirming the addition of donation amount but deleting the disallowance of expenses not within the scope of the order under section 263.