New Life Fellowship Trust vs. ITO

Parties Involved

Facts Summary

The assessee, New Life Fellowship Trust, filed an appeal against the First Appellate Order passed by the Commissioner of Income Tax (Appeals)-Faridabad dated 31.03.2019. The appeal arose from the assessment order dated 19.06.2017 passed by the Assessing Officer under Section 143(3) of the Income Tax Act, 1961 concerning the Assessment Year 2015-16. The assessee challenged the action of the CIT(A) invoking the provision of section 251(1)(a) of the Act whereby enhancement power was invoked to make enhancement on account of certain alleged anonymous donations received by the assessee trust. The assessee was granted registration under section 12AA of the Act and was entitled to claim exemption under section 11 and 12 of the Act. The Assessing Officer made an addition of Rs.12,18,000/- under section 13(3) of the Act in relation to payments made to a specified person. The CIT(A) found merit in the plea of the assessee towards the bonafides of payments made to the specified person and granted complete relief. However, the CIT(A) also observed that certain receipts by way of alleged anonymous donations were received by the assessee trust during the year and resorted to enhancement to the extent of Rs.75,15,734/- by invoking the enhancement power vested under section 251(1)(a) read with Explanation thereto.…

Legal Issues

• 1. Whether the CIT(A) in exercise of enhancement power conferred by the Explanation to Section 251(1)(a) of the Act is entitled to examine sources of income which are outside the mandate of the AO in terms of limited scrutiny notice issued under section 143(2) of the Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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