2020 (12) TMI 6 - AT - Income Tax

Disallowance u/s. 43B(f) - HELD THAT - DR did not object to the suggestion of remanding the issue back to AO for deciding the matter as per the decision of the Hon ble Supreme Court in the case Exide Industries 2020 (4) TMI 792 - SUPREME COURT - In the light of the aforesaid submissions, we set aside the impugned order of the Ld. CIT(A) and direct the AO to decide the impugned issue of leave encashment claim of ₹ 5,17,130/- in the light of the said decision of the Hon ble Supreme Court in the Exide case (supra). Needless to say that assessee should be given proper opportunity of hearing before the AO passes the order as per law. These grounds of assessee s appeal are allowed for statistical purpose. Deduction of donation u/s. 80G - Disallowance of exemption as the assessee did not produce any supporting documents - HELD THAT - Since the assessee could not bring any material to show that the said cheque was encashed, the Ld. CIT(A) did not accept the claim of assessee. According to the Ld. AR, if an opportunity is given to assessee, it is ready to bring evidence on record to show that the assessee, in fact, had given cheque and the payments were in fact, credited in the accounts of said charitable trust. We set aside the impugned order of the Ld. CIT(A) and remand this issue also back to the file of the AO for fresh consideration/adjudication of the issue. If the AO after verification finds that the payments were credited/encashed by the donee-trust which, who enjoys the 80G approval, benefit/claim of deduction, may be allowed in accordance to law. This ground of assessee s appeal is allowed for statistical purpose.

Summary

Issues:
1. Disallowance under section 43B(f) of the Income Tax Act, 1961.
2. Disallowance of deduction of donation under section 80G of the Act.

Issue 1: Disallowance under section 43B(f) of the Income Tax Act, 1961:
The appellant challenged the disallowance under section 43B(f) of the Act amounting to ?5,17,130. The appellant relied on a decision of the Calcutta High Court which was subsequently stayed by the Supreme Court. The AO disallowed the amount pending the Supreme Court's decision. The CIT(A) upheld the disallowance. The appellant argued for remanding the issue back to the AO following the Supreme Court's decision in the Exide case. The ITAT directed the AO to decide the issue in light of the Supreme Court's decision, granting the appellant a proper hearing opportunity.

Issue 2: Disallowance of deduction of donation under section 80G of the Act:
The AO disallowed a deduction of ?1,25,000 claimed under section 80G due to lack of supporting documents. The CIT(A) noted a donation of ?2,50,000 to a charitable trust but dismissed the claim as the donation receipt was issued after the limitation period. The appellant contended that evidence could be provided to show the donation was made and credited to the trust. The ITAT remanded the issue to the AO for fresh consideration, allowing the deduction if payments were verified to have been credited or encashed by the trust within the legal framework.

In conclusion, the ITAT allowed the appellant's appeal for statistical purposes, directing the AO to reconsider both issues in accordance with the legal precedents and evidence provided.