ITA 4/2008 BEFORE THE HON’BLE MR JUSTICE RANJAN GOGOI THE HON’BLE MR JUSTICE B.P.KATAKEY Gogoi,J. This appeal under Section 260-A of the Income Tax Act (hereinafter refer red to as the Act) has been admitted on the following substantial questions of l aw: 1) Whether on the facts and in the circumstances of the case, the T ribunal was justified and correct in law in setting aside the order of the Commi ssioner dated 30.03.2007 passed u/s 263 of the Income Tax Act, 1961? 2) Whether on the facts and in the circumstances of the case, is no t the decision of the Tribunal dated 31.08.2007 vitiated by perversity? 2. We have heard Sri U. Bhuyan, learned counsel for the appellant and Sri G K Joshi, learned senior counsel for the respondent-assessee. 3. The facts in brief may be noticed, at the outset. The assessment of the respondent for the assessment year 2004-2005 was c ompleted on 26.9.2006 by Assistant Commissioner of Income Tax, Circle-3, Guwahat i. In the said assessment, benefit of deduction of a sum of Rs.1,15,00,000/-(Rup ees one crore and fifteen lakhs only) under Section 35AC of the Act was granted to the respondent-assessee. The order of assessment in so far as the said deduct ion is concerned was sought to be suo motu revised by the Commissioner of Income Tax in exercise of powers under Section 263 of the Act. In the suo motu revisio nal proceeding, which was contested by the assessee, the deduction allowed by th e Assessing Officer was sought to be substantiated on the basis of the following documents which were placed by the assessee before the learned Commissioner: a) A request letter dt. 24.01.2003 from Rural Development Centre, M anipur to Managing Director of Universal Pipes(P) Ltd. b) Letter dt. 06.02.2003 addressed to Chairman/Secretary of Rural D evelopment Centre, Motbung by Registrar of societies. c) Registration certificate No.379 of 1993 along with their memoran dum of association. d) Notification u/s 35 AC of the I.T. Act, 1961 dt. 21.02.2003 as r ecommended by National Committee for promotion of social & economic welfare duly signed by Director National Committee. e) Gazette Notification New Delhi dt. 22.01.2003 incorporating Rura l Development Centre being eligible for obtaining the donation for A.Y. 2003-04, 2004-05 and 2005-06. f) Confirmation of payment of donation dt. 13.01.2006 in respect of donation received by Rural Development Centre for their project confirming tota l amount of Rs.1,15,00,000/- addressed to Asstt. Commissioner of Income Tax. 4. The suo motu revisional proceeding was decided by the learned Commission er by order dated 30th March, 2007 holding the assessee not to be entitled to th e benefit of deduction allowed by the assessing officer. The learned Commissione r in arriving at the said conclusion took note of the fact that from letter date d 30th March, 2006 of Assistant Commissioner of Income Tax, Imphal as well as th e letter dated 15th November, 2006 of the Deputy Commissioner, Income Tax, Impha l, it was clear that the Rural Development Centre to whom donation was claimed t o have been made by the assessee did not exist at the address furnished in Manip ur. The learned Commissioner also recorded the finding that enquiries revealed t hat the administrative office/branch of the Rural Development Centre at the addr ess given in Gurgaon was also not found to be in existence. It was also recorded by the learned Commissioner that the Rural Development Centre was not an assess ee under the Act and no PAN number was allotted to it and no Return had been fil ed. As the aforesaid requirements were to be fulfilled under Rule 11L(2) of the Income Tax Rules the Commissioner doubted the recommendation of the National Co mmittee and the authenticity of the basis for the Gazette notification dated 22n d January, 2003 mentioning the Rural Development Centre along with the scheme un dertaken by it to be eligible for the purpose of Section 35AC of the Act. Therea fter, the learned Commissioner proceeded to examine the entitlement of the asses seee under the provisions of Section 35CCA of the Act. In this regard, the findi ng of the learned Commissioner was to the effect that the conditions of eligibil ity or the prerequisites laid down had not been fulfilled by the Rural Developme nt Centre. Consequently, the interference with the part of the assessment order was made by the learned Commissioner by the order dated 30th March, 2007. 5. The Assessee, being aggrieved, filed an appeal before the Income Tax App ellate Tribunal, which was allowed by the impugned order dated 31st August, 2008 . Aggrieved, the Revenue has filed the present appeal under Section 260A of the Act, which has been admitted on the questions already noted above. 6. We have perused the order of the learned Tribunal under challenge. The f indings of the learned Tribunal leading to the dismissal of the appeal filed by the Revenue are in the following terms: We have given our careful consideration to the rival submissions made b efore us and have perused the orders of tax authorities. We have also considered the paper book filed by the ld. Counsel for the assessee. From the record, it i s evident that the recipient society was fulfilling all the criteria to be eligi ble for deduction under section 35AC and the prescribed authority has also recog nized such recipient society as eligible society under section 35AC. The society has also communicated with the A.O. in respect of such donation made by the ass essee to it. Since the A.O. has completed the assessment after perusing the deta ils and evidences filed by the assessee in respect of such donation made, the ac tion of ld. CIT in treating such order of A.O. as erroneous is without any cogen t material evidence on record and, therefore, in our considered opinion, such or der of ld. CIT in holding the order of A.O. as erroneous is not correct. We, the refore, set aside the order of ld. CIT(A) and accept the ground raised by the as sessee. 7. The Tribunal is the highest appellate authority under the Act and the la st Court on facts. Wide powers have been conferred on the Tribunal by the prov isions of the Act. In the present case, the learned Tribunal has decided the app eal on the basis of bald conclusions reached by it, ostensibly on a consideratio n of the submissions advanced and the records produced, without, however, disclo sing the basis therefor. As already noticed, the learned Commissioner in the ord er dated 30th March, 2007 had indicated the reasons and the basis on which the s aid authority had come to the conclusion that the relevant part of the assessmen t order should be interfered with as the same is erroneous and prejudicial to th e interest of the Revenue. It was the bounden duty of the learned Tribunal to di scuss the basis on which the learned Commissioner had come to his conclusions an d thereafter arrive at its own conclusions in the matter. Surprisingly, the lear ned Tribunal did not feel it necessary to do so and had thought it proper to dis miss the appeal on the conclusions reached without, however, any discussions as to how such conclusions have been reached. 8. Under section 260A of the Act, appeals lie to the High Court against ord ers passed by the learned Tribunal on substantial questions of law. Such questio ns have been framed at the time of admission of the appeal. The manner in which the learned Tribunal had passed the presently impugned order does not permit us to answer any of the questions framed, as necessary materials and discussions to enable us to do so are absent in the order of the learned Tribunal. 9. We are, therefore, unable to answer the questions framed. At the same ti me having regard to the discussions above we have no other option but to set asi de the order of the learned Tribunal dated 31st August 2007 passed in I.T.A. No. 130 (Gau) of 2007 and remand the matter for a fresh decision on merit, keeping i n mind the principles of law in this regard and our observations as contained ab ove. Consequently, the appeal shall stand disposed of in the above terms.