Tribunal Remands Case: Violation of Natural Justice, Donors' Evidence Ignored, Fresh Decision Ordered

The Tribunal found that the AO and CIT(A) violated principles of natural justice by not appreciating the Khataunies proving the existence of donors and wrongly holding that certain donors failed to appear. The matter was remitted to the AO for a fresh decision after summoning the thirteen donors and providing the assessee with a proper opportunity of hearing. The appeal was treated as allowed for statistical purposes.

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Issues Involved:
1. Sustaining the addition of Rs. 28,50,000/- by the CIT(A).
2. Failure to appreciate the Khataunies proving the existence of donors.
3. Alleged errors in holding that certain donors failed to appear.

Detailed Analysis:

1. Sustaining the Addition of Rs. 28,50,000/-:
The core issue in this appeal is the confirmation of an addition of Rs. 28,50,000/- by the CIT(A). The assessee, a Charitable Trust registered under section 12A of the Income Tax Act, 1961, filed a return declaring NIL income. The assessment was completed under section 143(3) at an income of Rs. 1,27,46,700/-, with an addition under section 115 BBC. The CIT(A) deleted Rs. 66,46,700/- but confirmed Rs. 61,00,000/-. The Tribunal previously restored the issue concerning thirteen donors to the Assessing Officer (AO) for fresh decision. In remand proceedings, the AO reconfirmed the addition of Rs. 28,50,000/-, which the CIT(A) upheld.

2. Failure to Appreciate Khataunies:
The assessee contended that the AO and CIT(A) erred in not appreciating the Khataunies on record, which proved the existence of donors and fulfilled the mandate of Section 115BBC(3) of the Income Tax Act. The assessee provided addresses of the donors during the remand proceedings, but the AO did not issue fresh summons to the thirteen alleged donors. The Tribunal noted that the AO's failure to issue fresh summons was improper and violated principles of natural justice.

3. Alleged Errors in Holding Donors Failed to Appear:
The assessee argued that the AO and CIT(A) wrongly held that certain donors failed to appear. Specifically, the assessee claimed that Shri Preetam Singh, who donated Rs. 2,50,000/-, appeared before the AO, as evidenced in the assessment order. Similarly, Bhagwant Singh, who donated Rs. 2,50,000/-, was alleged to have not received notice, while other family members appeared. The Tribunal observed that the AO did not summon the donors during remand proceedings, despite the assessee providing their addresses. The Tribunal emphasized the necessity of obtaining specific responses from the Postal Authorities to verify the non-service of notices.

Conclusion:
The Tribunal found that the AO's and CIT(A)'s actions amounted to a violation of natural justice. The AO should have issued fresh summons to the donors to clear doubts. The Tribunal ordered the matter to be remitted to the AO for a fresh decision on merits, after summoning the thirteen donors and providing the assessee with an adequate opportunity of hearing. The appeal was treated as allowed for statistical purposes.

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