Itat/90/2023 Ia No:ga/2/2023 Commissioner Of Income Tax, Exemption, Kolkata v. M/S. Anandalok

OD-10 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/90/2023IA NO:GA/2/2023COMMISSIONER OF INCOME TAX, EXEMPTION, KOLKATA VS.M/s. ANANDALOK BEFORE : THE HON’BLE ACTING CHIEF JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : 8[th] May, 2023 Appearance :Mr. Prithu Dudhoria, Adv.…for the appellant Mr. Somnath Ganguli, Sr. Adv.Mr. Sukalpa Seal, Adv.Mr. Bhaskar Sengupta, Adv.Ms. Priyamvada Singh, Adv.…for the respondent The Court : This appeal by the revenue under Section 260A of the IncomeTax Act, 1961 (the Act) is directed against the order dated October 21, 2022passed by the Income Tax Appellate Tribunal, `B’ Bench, Kolkata (Tribunal) inI.T.A No.2128/Kol/2018 for the assessment year 2014-15. The revenue hasraised the following substantial questions of law for consideration :- Whether on the facts and in the circumstances of the case as well as in lawthe Learned Income Tax Appellate Tribunal erred in law allowing theapplication of income to the tune of Rs.3.84 crores on account of free distribution of medicine by simply relying on upon the photograph of medicalcamp, copies of the request letters from various social organizations and theannual flood report, 2013 which provided the broad picture of flood situationof the district without considering the direct and circumstantial evidencescollected during the assessment proceedings ? We have heard Mr. Prithu Dudhoria, learned standing counsel appearingfor the appellant/revenue and Mr. Somnath Ganguli, learned senior counsel forthe respondent/assessee. The learned Tribunal allowed the appeal filed by the assessee challengingthe order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] who hadaffirmed the order passed by the Assessing Officer under Section 143(3) of theAct. The Assessing Officer doubted the genuineness of the expenditure incurredby the assessee on free distribution of medicines to patients and other socialorganizations during the flood situation. On going through the order impugnedas well as the order passed by the CIT(A), we find that the entire matter wasbased upon the statement recorded from one Dr. Chatterjee. Admittedly, the saidDr. Chatterjee had been working in the assessee hospital and had initiallyresigned and thereafter rejoined the organization after a period of more than ayear. The said Dr. Chatterjee through whom the statements were recorded wasnot made available for cross-examination by the Assessing Officer. The learned Tribunal after taking note of the facts and the materialsplaced on record held that there was a flood in the district of Midnapore and thefinding recorded by the Assessing Officer and the CIT(A) was contrary to the The learned Tribunal after taking note of the facts and the materialsplaced on record held that there was a flood in the district of Midnapore and thefinding recorded by the Assessing Officer and the CIT(A) was contrary to the records. Furthermore, the learned Tribunal found that it is not in dispute thatthe assessee is engaged in charitable activities of providing free medicines,medical aid and treatment to the needy and poor operating hospital andconducting medical campaigns and these activities of the assessee were neverdoubted by the Income Tax department in the year under consideration or in theprevious or succeeding years. Further, the documents in the nature ofphotographs produced before the Tribunal were also examined and it was foundthat the medical camp was conducted by the assessee to cater to the poor andaffected people of the concerned area. Furthermore, the learned Tribunal hasseen that requests were received by the assessee from various socialorganizations for giving free medicines so that the same could be distributed tothe people affected by the floods. Further, the learned Tribunal noted thepurchase of medicines were verified by the Assessing Officer by issuing noticeunder Section 133(6) of the Act to various suppliers who are confirmed to havesupplied medicines to the assessee. Thus, the learned Tribunal came to theconclusion that the Assessing Officer had based his conclusion solely upon astatement recorded from an office bearer of the social organization anddisallowed the expenses incurred by the assessee for supplying free medicines tosocial organizations. That apart, the Tribunal also noted that the assessee wasnot provided the opportunity to cross-examine despite specific request made bythe assessee vide letter dated 7[th] December, 2016 requesting that they may bepermitted to cross-examine the office bearer of the social organization. Thus,without affording such an opportunity the Assessing Officer could not havedrawn adverse inference against the assessee. Further, we find that the Assessing Officer based his findings on a statement recorded from one Dr.Chatterjee. Interestingly, the said Dr. Chatterjee was working as a residentMedical Officer in the assessee hospital from 1997 and according to him, due tocertain personal issues between himself and the assessee hospital he left thehospital in March, 2013 and again rejoined in July, 2015. It appears that astatement was recorded from the said Doctor on 1[st] December, 2016 which couldnot have been of any relevance. Such supply of medicines by the assessee wasstated to have been done during October, 2013. Furthermore, the said Dr.Chatterjee was also not made available for cross-examination by the assessee. Thus, in the light of the factual conclusion arrived at by the Tribunal, wefind no questions, much less substantial questions of law, arises forconsideration in this appeal. Accordingly, the appeal fails and is dismissed. The application for stay being IA NO:GA/2/2023 is also dismissed. (T.S. SIVAGNANAM, J.) ACTING CHIEF JUSTICE (HIRANMAY BHATTACHARYYA, J.)