Facts of the Case

The assessee, Paras Nath Digambar Jain Uchch Vidyalaya, Giridih, filed an appeal against the order dated 07.03.2023 passed by the Commissioner of Income Tax (Exemption), Patna. The assessee is an educational institution and had approached the CIT (Exemption) for adjudication of its claim under the exemption provisions of the Income-tax Act. During the proceedings before the CIT (Exemption), the assessee failed to furnish the requisite documents and evidences as called for.

Issues Involved

Whether the Commissioner of Income Tax (Exemption) was justified in passing the impugned order when the assessee failed to furnish relevant documents, and whether the matter deserved restoration to provide the assessee an opportunity to substantiate its claim.

Petitioner’s Arguments

The assessee submitted that it was unable to produce the required documents before the CIT (Exemption) during the earlier proceedings. It was prayed that the matter be restored to the file of the CIT (Exemption) so that the assessee could furnish all relevant documents and cooperate fully in the proceedings for proper adjudication of its claim.

Respondent’s Arguments

The Revenue submitted that adequate opportunities were granted by the CIT (Exemption) and despite such opportunities, the assessee failed to produce the necessary documents. The Revenue supported the order passed by the CIT (Exemption).

Court Order / Findings

The ITAT Ranchi observed that a perusal of the record clearly showed that the assessee had not furnished the required details before the CIT (Exemption). However, considering the nature of the matter and in the interest of justice, the Tribunal held that the issues deserved to be restored to the file of the CIT (Exemption) for fresh adjudication after granting the assessee adequate opportunity of being heard and to furnish all relevant documents.

Important Clarification

The Tribunal clarified that while non-furnishing of documents may justify an adverse order, principles of natural justice require that a reasonable opportunity be provided where the assessee undertakes to cooperate and place all relevant material on record.

Final Outcome

The appeal filed by the assessee was partly allowed for statistical purposes, and the matter was restored to the file of the Commissioner of Income Tax (Exemption), Patna for fresh adjudication in accordance with law after granting adequate opportunity to the assessee.

Link to Download Order- https://www.mytaxexpert.co.in/uploads/1769079961_PARASNATHDIGAMBERJAINUCHCHVIDYALAYAGIRIDIHVS.CITEXEMPTIONPATNA.pdf

 

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