Rotary Noida Research and Social Welfare Trust vs. Assessing Officer

Parties Involved

Facts Summary

The assessee, Rotary Noida Research and Social Welfare Trust, is a charitable institution operating a blood bank and providing blood and related services to the needy and critically ill patients. A special audit was conducted due to discrepancies in the accounts for Financial Year 2017-18, which revealed fictitious/non-existent assets recorded in the books to camouflage the shortfall arising from the embezzlement of funds by Mr. Satish Singhal and Mr. Rahul Goel. The embezzled amount was quantified as Rs.1,77,70,265/-. The Assessing Officer disallowed this amount while computing the taxable income of the assessee, alleging that the assessee failed to establish the fact of embezzlement and that the amount had become irrecoverable. The assessee provided a copy of the FIR registered under various sections of the Indian Penal Code, alleging that Mr. Satish Singhal had utilized FDRs of the trust for his personal use and illegally transferred blood units.…

Legal Issues

• 1. Whether the disallowance of the amount due to alleged embezzlement by the Assessing Officer is justified.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon