9911796707
TMI Blog2025 (1) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... facie, a reliance on the report generated for the earlier Assessment Years cannot be basis to conclude that the similar pattern would have been followed by an assessee during the subsequent Assessment Years to do so and would amounting to assessment by sampling which is frowned upon by this Court. Therefore, to that extent, the Impugned Assessment Order deserves an interference. That apart, it appears that the entire amount of expenses incurred by the petitioner towards the salaries of its staffs has been disallowed. Thus, a reading of the table in the Impugned Assessment Order particularly the table which has been extracted stated that no allowance has been made for the expenses incurred by the petitioner towards administrative and salary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2015, 2015-2016 and 2017-2018. 5. Ultimately, in the Impugned Order, the 1st respondent has concluded that the petitioner had a gross receipt of Rs. 351,58,26,857/- and that the petitioner had applied a sum of Rs. 263,31,43,492/- (67% of gross receipt) for charitable purposes and that for the balance of Rs. 115,26,83,365/-, the petitioner had failed to establish any documents to substantiate that the amount was utilized for charitable purposes and therefore the demand has been confirmed on the aforesaid amount. 6. The calculation in the Impugned Order is as under:- Total Income as per Return of Income Rs. Nil Total Receipts Rs. 351,58,26,857/- Applied for Charitable Purpose Rs. 236,31,43,492/- (67% of receipts) Amount not applied during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the petitioner and the learned Senior Standing Counsel for the respondents. 14. The demand has been confirmed in the Impugned Assessment Order dated 14.09.2021 based on the Special Audit Report dated 02.06.2017 of the External Auditor appointed for this purpose under Section 142(2A) of the Income Tax Act, 1961. 15. The Special Audit Report was for the Assessment Year 2014-2015. A reading of Section 142(2A) of the Income Tax Act, 1961 indicates that the report can relate only a particular Assessment Year as the expression used is, if at any stage of the proceedings before him , the Assessing Officer, having regard to the nature and complexity of the accounts, volume of the accounts, doubts about the correctness of the accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acie , a reliance on the report generated for the earlier Assessment Years cannot be basis to conclude that the similar pattern would have been followed by an assessee during the subsequent Assessment Years to do so and would amounting to assessment by sampling which is frowned upon by this Court. 17. Therefore, to that extent, the Impugned Assessment Order dated 14.09.2021 deserves an interference. 18. That apart, it appears that the entire amount of expenses incurred by the petitioner towards the salaries of its staffs has been disallowed. 19. Thus, a reading of the table in the Impugned Assessment Order dated 14.09.2021 particularly the table which has been extracted above indicates that no allowance has been made for the expenses incurr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpretation of case laws . Based on above observations, the Assessment is concluded as per the Draft Assessment Order sent to the Assessee as Show Cause Notice dated 15/08/2021. 21. However, it is the contention of the respondents Department that if no other amount is to be allowed, the respondents Department has to make guess work by invoking Section 144 of the Income Tax Act, 1961. 22. Under these circumstances, the Impugned Assessment Order dated 14.09.2021 is liable to be set aside and is accordingly set aside and the case is remitted back to the respondents to pass a fresh order on merits and in accordance with law independently without getting influenced from the Special Audit Report dated 02.06.2017 under Section 142(2A) of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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