2017 (9) TMI 425 - AT - Income Tax

Denial of exemptions under section 10(23C)(vi) - AO observed that expenditure has been remitted to the Head Office in the USA and the surplus has not been utilized in India for the charitable purpose - Matter remanded back to AO for fresh adjudication in term of the decision of Hon ble Bombay High Court 2010 (6) TMI 68 - BOMBAY HIGH COURT - Appeal of assessee allowed for statistical purposes

Summary

Issues:
1. Reopening of assessment
2. Denial of exemptions under section 10(23C)(vi) of the Act
3. Denial of deduction in respect of expenditure debited to the income and expenditure account

Reopening of Assessment:
The assessee did not press the issue of the reopening of assessment during the hearing, leading to its dismissal as not pressed.

Denial of Exemptions under Section 10(23C)(vi) of the Act:
The appeals by the assessee involved issues related to the denial of exemptions under section 10(23C)(vi) of the Income Tax Act. The CIT(A) had held that the appellant was not entitled to exemption under this section as the surplus income was remitted to the Head Office in the USA and not utilized in India for charitable purposes. The appellant contended that it fulfilled all conditions for exemption under section 10(23C)(vi) and challenged the denial of exemption.

Denial of Deduction in Respect of Expenditure:
Another issue was the denial of deduction in respect of expenditure not debited to the Income and Expenditure Account. The CIT(A) confirmed the action of the DDIT in not allowing the deduction of expenditure incurred by the applicant in the USA towards educational courses provided in India. The CIT(A) observed that the expenditure could not be considered genuine unless supported by reliable documentary evidence.

The Tribunal referred to a previous case involving the assessee and the Hon'ble Bombay High Court's directions. The Tribunal agreed with the previous findings and directed the AO to determine the surplus, provide adequate opportunity to the assessee, and grant a reasonable period for compliance with monitoring conditions. The AO was instructed to pass denovo orders in accordance with the law and the High Court's directions.

In conclusion, the Tribunal set aside the orders of the lower authorities and remanded the matter back to the AO for fresh adjudication based on the directions of the Hon'ble Bombay High Court. Consequently, all the appeals of the assessee were allowed for statistical purposes.