Appeal allowed under IT Act 1961, case remanded for fresh adjudication

The appeal challenging the order passed under section 144 of the IT Act, 1961, regarding the addition to the taxable income of the assessee trust was allowed for statistical purposes. The case was remanded back to the Assessing Officer for fresh adjudication in accordance with the law, considering the evidence and defense presented by the assessee. The order of the Commissioner of Income Tax(A) was set aside, providing the assessee with a reasonable opportunity to present its case. The decision was pronounced on 11/01/2022.

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Issues: Challenge to order passed u/s. 144 of the IT Act, 1961 regarding addition to taxable income of the assessee trust.

Analysis:
1. The appeal was filed by the assessee challenging the order passed u/s. 144 of the IT Act, 1961, against the order of the Commissioner of Income Tax(A)-40, Delhi. The assessee contested the addition of Rs. 4,15,80,000 to the taxable income of the trust.

2. During the hearing, it was noted that additional evidence submitted by the assessee before the CIT(A) was not admitted. The issue regarding proof of investment under section 11(5) of accumulative profits under section 11(2) was not examined on merits by the CIT(A) as it was not admitted as additional evidence under Rule 46A of the I.T. Rules 1962.

3. Considering the submissions and facts of the case, it was observed that the dispute raised in the appeal needed to be remitted back to the Assessing Officer (AO). The assessment under section 144 of the Act was conducted as the assessee failed to provide evidence of amount accumulated under section 11(2) as per the objects prescribed under section 11(5) of the Act. The AO denied the benefit of accumulated exemption under section 11. The CIT(A) also rejected the additional evidence without properly evaluating the circumstances.

4. Referring to the judgment in Tinbox Company Vs. CIT 249 ITR 216 (2001) and to ensure justice, the issue was directed to be sent back to the AO for fresh adjudication in accordance with the law, taking into account the evidence and defense presented by the assessee. The AO was instructed to provide a reasonable opportunity for the assessee to present its case. Consequently, the order of the CIT(A) was set aside, and the issue was remanded to the AO.

5. Ultimately, the appeal of the assessee was allowed for statistical purposes. The decision was pronounced on 11/01/2022.

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