2015 (7) TMI 686 - HC - Income Tax

Denial of the benefit of Section 11 - ITAT found no justification in denying the benefit of Section 11 to the Assessee - Held that - It was, incumbent on the Appellant, in terms of the order passed by this Court on 22nd September 2014, to enclose with its affidavit copies of the relevant documents and in particular the confirmation letters/responses filed by 13 of the donors before the AO in the remand proceedings confirming that they had made donations to the Assessee. The affidavit dated 26th November 2014 of the CIT filed pursuant to the above order has been perused by the Court. The said affidavit does not enclose the relevant response/confirmation letters of the 13 donors filed before the AO and also does not indicate why those letters do not satisfy the requirement of the law. Mr. Kamal Sawhney, learned Senior Standing Counsel for the Appellant, did not dispute that the said relevant documents were not enclosed with the affidavit. He, however, sought some more time for that purpose. Considering that since 22nd September 2014 there have been three adjournments granted to the Appellant to comply with the order, the Court is not prepared to grant any further indulgence.The Appellant has been unable to persuade the Court that impugned order of the ITAT suffers from perversity. - Decided against assessee.

Summary

Issues:
Challenge to ITAT order under Section 260-A of the Income Tax Act 1961 regarding denial of Section 11 benefit for AY 2004-05 based on corpus donation authenticity.

Analysis:
The appeal challenged an ITAT order regarding the denial of Section 11 benefits for AY 2004-05 due to lack of authenticity of a corpus donation. The Assessee, an educational institution registered under Section 12-AA of the Act, faced an addition of Rs. 1,31,13,000 to its income by the Assessing Officer (AO) for failing to prove the identity, genuineness, and creditworthiness of donors. The AO's decision was upheld by the Commissioner of Income Tax (Appeals) before the Assessee appealed to the ITAT.

The ITAT observed that the AO did not present accurate facts to the CIT (A) and conducted its examination of donor details, noting that subsequent assessments did not deny Section 11 benefits to the Assessee. The ITAT found no justification for denying the benefit based on the Assessee's capital expenditure exceeding the corpus donation. Despite court directions to submit relevant documents, the Appellant failed to enclose confirmation letters from donors confirming their donations, leading to the dismissal of the appeal.

The Court emphasized the importance of complying with orders and refused further extensions, as the Appellant could not demonstrate perversity in the ITAT's order. The appeal was ultimately dismissed, affirming the ITAT's decision regarding the denial of Section 11 benefits for AY 2004-05 based on corpus donation authenticity.