Not complying with the requirement of production of books of account, vouchers etc. cannot be a reason to deny exemption u/s 11 of the Income Tax Act

IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES “B”: HYDERABAD
(THROUGH VIRTUAL CONFERENCE)

 BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER
AND
SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

ITA No. 351/H/2019
Assessment Year: 2014-15

Income-tax Officer,
(Exemptions), Tirupathi.
(Appellant) 

Vs. 

Madina Enggg. College
under the auspices
Bukharia Educational
Society, Kadapa
(Respondent)

Revenue by: Shri Rohit Mujumdar
Assessee by: None

Date of hearing: 08/06/2021
Date of pronouncement: 18/06/2021

O R D E R

PER L.P. SAHU, A.M.:

This appeal filed by the Revenue is directed against CIT(A), Kurnool’s order dated 03/12/2018 for AY 2014-15 involving proceedings u/s 144 of the Income Tax Act, 1961 ; in short “the Act” on the following grounds:

“1. The Ld C!T(A) erred in allowing the appeal of the assessee.

2. The Ld. C!T(A) erred in deleting the addition made by the AO in respect of the net surplus of Rs. 1,61,95,594/- as the assessee failed to submit evidence in support of the amount spent and also failed to prove that the same was spent only for the aims and objectives of the Society.

3. The Ld. C!T(A) erred in disregarding the fact that no evidences were produced before the AO to substantiate its claim of exemption u/s. 11 of the LT. Act.

4. The Ld. C!T(A) while relying on the submission made by the appellant regarding closure of the college and disputes among board members, erred in ignoring the fact that the assessee failed to prove that the activities of the Society have been pursued and that they were genuine and charitable in nature.

5. Any other ground that may be taken up at the time of hearing.”

2. The assessee M/s Bhukriya Educational Society has been running and educational institution under the name and style of M/s Madina Engineering College at Kadapa. The Society is exempted u/s 12A of IT Act 1961 since dated 27-07-2004. The assessee filed the Return of income for AY 2014-15 ON 18-12-2014 disclosing an income or Rs. NIL claiming exemption u/s 11 of the IT Act 1961. Subsequently, the case was selected for scrutiny. The books of account & vouchers were not provided by the assessee. Only, bank accounts were submitted during the course of assessment proceedings. The assessment proceedings was completed u/s.144 ex-parte on 19.12.2016 by disallowing exemption u/s. 11 of the I.T. Act and treated surplus income of Rs.1,61,95,594/- disclosed in the Return of Income as assessee’s income from business. 

3. When the assessee preferred an appeal before the CIT(A) against the order of AO, the CIT(A) directed the AO to grant exemption u/s 11 and delete the addition of Rs. 1,61,95,594/- following the decision of assessee’s own case for AY 2009-10 wherein the return of income was scrutinized u/s 143(3) of the Act and exemption u/s 11 of the Act was allowed. 

To know more in details find the attachment file