Petitioner directed to pursue statutory appeal for assessment order validity & donation exemption eligibility.

The court concluded that the petitioner should pursue the alternate remedy of filing a statutory appeal before the CIT-A regarding the validity of the assessment order and eligibility of donations for exemption. The court emphasized the importance of exhausting alternate remedies, particularly in fiscal matters, and allowed for the exclusion of time spent in the writ petition from the limitation period for filing the appeal. The writ petition was disposed of with directions for the petitioner to address all issues in the appeal, with no costs awarded.

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Issues Involved:
1. Validity of the assessment order dated 29.11.2018.
2. Eligibility of donations for exemption under Section 35(1)(ii) of the Income Tax Act, 1961.
3. Compliance with principles of natural justice, specifically the right to cross-examine witnesses.
4. Availability and appropriateness of an alternate remedy.

Detailed Analysis:

1. Validity of the Assessment Order:
The assessment order dated 29.11.2018 was issued under Section 143(3) of the Income Tax Act, 1961, following a remand by the Income Tax Appellate Tribunal (ITAT). The order in question was challenged by the petitioner on the grounds that the donations made were not eligible for exemption and that there was a violation of principles of natural justice.

2. Eligibility of Donations for Exemption:
The petitioner claimed exemptions for donations made to Herbicure Healthcare Bio-Herbal Research Foundation and School of Human Genetics and Population Health under Section 35(1)(ii) of the IT Act. However, these donations were disallowed by the Assessing Officer (AO) based on findings from a survey that indicated the institutions were providing accommodation entries for bogus donations. The ITAT had previously remanded the matter, directing the AO to provide the petitioner with relevant documents and an opportunity to rebut the evidence.

3. Compliance with Principles of Natural Justice:
The petitioner argued that the AO relied on sworn statements from representatives of the two institutions without providing an opportunity for cross-examination, thereby violating principles of natural justice. The court noted that the statements were recorded under Section 133A of the IT Act, which does not have evidentiary value, as supported by the Supreme Court's ruling in Commissioner of Income-Tax vs. S.Khader Khan Son. The court emphasized that the petitioner should have been allowed to cross-examine the witnesses, especially given the factual disputes regarding the rerouting of donations.

4. Availability and Appropriateness of an Alternate Remedy:
The court pointed out that the petitioner had an alternate remedy available via a statutory appeal to the Commissioner of Income Tax Appeals (CIT-A) under Section 246A of the IT Act. The court highlighted that the CIT-A has the authority to conduct further inquiries or direct the AO to do so under Section 250(4) of the IT Act. The court also referenced the principle from Dunlop India Ltd. and subsequent cases, emphasizing that alternate remedies should be pursued rigorously, especially in fiscal matters.

Conclusion:
The court concluded that the petitioner should be relegated to the alternate remedy of filing a statutory appeal before the CIT-A. It was clarified that all questions and issues raised by the petitioner, including the right to cross-examine, could be addressed in the appeal. The court also allowed for the exclusion of the time spent in the writ petition from the limitation period for filing the appeal and noted that any delay could be condoned by the CIT-A.

Disposition:
The writ petition was disposed of with directions for the petitioner to pursue the alternate remedy of a statutory appeal, with all questions and contentions left open for consideration by the CIT-A. There was no order as to costs, and the connected miscellaneous petition was closed.

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