2022 (6) TMI 1201 - AT - Income Tax

Admission of additional evidence by CIT - Assessment of trust - corpus donation received by the trust unexplained - addition u/s 68 - CIT(A) who admitted the additional evidence under Rule 46A and partly allowed the appeal of the assessee on the ground that in the interest of justice, learned CIT(A) can admit the additional evidence - Revenue s contention is that Rule 46A prescribed that appellant shall not be entitled to produce additional evidence before the first appellate authority because in the case before us ample opportunity was given to the assessee to file the evidentiary support of his contention and CIT(A) ought to have record in writing the reason for its admission of additional evidences before him - HELD THAT - CIT(A) can admit additional evidence if he finds it crucial and necessary for the disposal of the appeal. We think if additional evidence is without any blemish and in order to advances the cause of justice the same ought to be admitted. After considering the plethora of judgments, the paramount consideration of the adjudicating authority should be fair disposal of the appeal/case in order to protect interest of justice. As in the present case, assessee could not file certain details before the learned AO but he filed before the learned CIT(A) and learned CIT(A) forwarded same details for the comments of the learned AO and sought remand report. In remand report, learned AO did not doubt the content of documents but objected to filing of additional evidence under Rule 46A. After considering the remand report, CIT(A) decided the matter. As per Income Tax Act, learned CIT(A) has co-terminus power. Thus, we do not find any infirmity in the order of the CIT(A). We agree with the finding of learned CIT(A). - Decided against revenue.

Summary

Issues involved:
1. Admission of additional evidence without satisfaction under Rule 46A of IT Rules, 1962.
2. Deletion of additions made under section 68 of the Income Tax Act.
3. Discrepancies in corpus donations and voluntary contributions claimed by the assessee.

Detailed Analysis:
1. The appeal by the Revenue challenged the CIT(A)'s order admitting additional evidence without satisfaction under Rule 46A of the IT Rules. The Revenue contended that the CIT(A) should not have allowed the additional evidence as the assessee had ample opportunities to provide necessary details. However, the AR argued that the CIT(A) can admit additional evidence in the interest of justice. The ITAT held that the CIT(A) can admit crucial evidence necessary for the appeal's disposal. The adjudicating authority's paramount consideration should be the fair disposal of the case to protect the interest of justice. The CIT(A) sought a remand report from the AO for each additional evidence submitted and decided the matter after considering the remand report. The ITAT found no infirmity in the CIT(A)'s order and agreed with the decision.

2. The Revenue raised concerns about the deletion of additions made under section 68 of the Income Tax Act regarding corpus donations and voluntary contributions. The AO had made additions as the assessee failed to provide complete details and supporting evidence. The ITAT noted discrepancies in the corpus donations claimed by the assessee, where the claimed amount did not match the balance sheet provided. The ITAT also highlighted that the assessee could not provide specific directions from donors for certain amounts. Regarding voluntary contributions, the ITAT found that the assessee did not provide satisfactory explanations or supporting evidence for the amounts claimed. The ITAT upheld the AO's decision to make additions based on the lack of proper documentation and explanations provided by the assessee.

3. The case involved discrepancies in the corpus donations and voluntary contributions claimed by the assessee. The ITAT noted that the assessee, a public charitable/religious trust, failed to provide complete details, specific directions from donors, and supporting evidence for the donations received. The ITAT highlighted instances where the donors did not confirm donations as corpus funds, leading to doubts about the genuineness and creditworthiness of the donations. The ITAT emphasized the importance of providing necessary documentation and explanations to support claimed donations. Ultimately, the ITAT found the justifications given by the assessee for corpus donations and voluntary contributions unsatisfactory, leading to the AO's additions being upheld.

In conclusion, the ITAT dismissed the Revenue's appeal, affirming the CIT(A)'s decision to admit additional evidence and upholding the AO's additions concerning corpus donations and voluntary contributions due to lack of proper documentation and explanations provided by the assessee.