expenses by charitable society later on found bogus expense

[sm surana]

As per investigation it was found that some of the expenses claimed, by the charitable society as application of income,were not genuine. What is the fallout ? whether it will be reduced from the amount applied or will be added to income ? please guide and also quote the relevant court cases and section of the act also . thanks

[DR.MARIAPPAN GOVINDARAJAN]

It will be added to the income. If the amount is considerably large, reopening of assessment is possible.

AI Summary

Disallowance of bogus charitable expenses leads to addition to taxable income and potential reassessment action. Bogus expenses claimed as application of income by a charitable society are treated as non-genuine and are added back to taxable income; where amounts are substantial, reopening of prior assessments or reassessment proceedings may be initiated to correct filings.