Deputy Commissioner of Income Tax vs. Lok Jagruti Kendra

Parties Involved

Facts Summary

The assessee, Lok Jagruti Kendra, is a Trust established to work for social, economic, political cultural and intellectual development of people through educational activities of all kinds. During the course of assessment, the Assessing Officer analyzed the Balance Sheet of the assessee as of March 31st, 2017, which reflected a significant amount of Rs. 4,60,08,917/- under 'Sundry Creditors' and Rs. 4,96,50,747/- under 'Loans and Advances.' Upon reviewing the ledger accounts submitted by the assessee, the Assessing Officer noted that there were no closing balances for sundry creditors, and only Rs. 4,40,944/- was recorded under loans and advances. The audit report indicated that the trust operates on a cash accounting system, raising concerns about the discrepancies related to the reported liabilities. The Assessing Officer found the explanation of the assessee unsatisfactory, and noted the absence of any evidence to substantiate this substantial liability. The Assessing Officer was of the view that specific amounts were attributed to advance payments for orders, but the significant liability attributed to Bhavya Developers and Organisers Ltd., amounting to Rs.4,51,76,262/-, lacked supporting documentation. The Assessing Officer was of the view that despite multiple opportunities for clarification, the assessee failed to provide adequate documentation regarding transactions with Bhavya Developers and Organisers Ltd. Notably, the PAN associated with this entity was found by th…

Legal Issues

• 1. Whether the Assessing Officer erred in deleting the addition of Rs. 4,51,76,262/- assuming the facts that 'no payment towards the unfinished work was actually made in the year 2002 and also the same has not been claimed as an expenditure even in F.Y. 2002-03 and dispute is pending before the mediator' contrary to the findings recorded by Assessing Officer in Para 15.1 and Para 13.1 Assessing Officer respectively and without confronting any additional evidence to the Assessing Officer.

Judgment Outcome

Decided in favour of Revenue.

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