M/S. VINAYAKA EDUCATIONAL TRUST,BANGALORE vs. THE INCOME-TAX OFFICER, (EXEMPTIONS) WARD-2, BANGALORE

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ITA 192/BANG/2023Status: DisposedITAT Bangalore08 May 2023AY 2016-175 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal before the CIT(A), stating that substantial justice should be preferred over technicalities. The appeal was remanded to the CIT(A) to decide the matter on merits after granting a proper opportunity of being heard.

What were the facts?

The assessee, Vinayaka Educational Trust, filed an appeal before the CIT(A) after a delay of 386 days. The assessee claimed that the delay was due to notices and the assessment order being sent to an old email ID and address, leading to a violation of natural justice.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) should be condoned due to non-service of notices, and whether the assessment order is bad in law due to violation of principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1),Section 11(1)

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Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE

Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI

For Appellant: Smt. Sunaina Bhatia, CA, Shri Sankar Ganesh K

ORDER

PER BEENA PILLAI, JUDICIAL MEMBER Present appeal is filed by assessee against order dated 20.01.2023 passed by NFAC, Delhi for A.Y. 2016-17. 2. At the outset, the Ld.AR submitted that the Ld.CIT(A) dismissed appeal in limine as there was a delay in filing the appeal by 386 days. 3. The Ld.AR submitted before the Ld.CIT(A) as under: “2.1 The appellant has filed the following facts of the case :

1.

Page 2 of "The appellant, Vinayaka Educational Trust is a Charitable Trust engaged in providing education having PAN AAA TV6033C at No. 2/55/1, MRG House, Outer Ring Road, Opposite Lumbini Garden, Veerannapalya, Bangalore - 560045.

2.

For the assessment year 2016-17, based on the audited statement of accounts, the appellant has computed its total income as per the provisions of the Income Tax Act, 1961 and has filed its return of income on 17th October, 2016 declaring a total income at Nil.

3.

Further on 31st January 2 020, while viewing the income tax portal our consultant informed that there was pending e-proceedings and an outstanding demand of Rs. 68,56,300/- under section 144 and dated 25th December, 2018.

4.

The assessment was completed by the Learned Assessing Officer by denying the claim made under section 11(1) of the Income Tax Act, 196 1 recomputed the appellants income to Rs.1,54,95,958/- and raised a demand of Rs. 68,56.300/-.

5. The Learned Assessing Officer has also stated in the assessment order Page no 1 and 2 that there was no response from the assesse to the notice issued to the assesse.

6.

In the above regards, all the mail communication was made to the Trusts old mail ID (balakrishnaitr(at)gmail.com) which belongs to their previous Accountant. However, they have updated their latest Email ID (exe .accounts(at)groupmrg.com) in the Profile in their Income Tax Portal during the Assessment Year 2017 - 2018 and they are continuously using the same mail ID.

7. During the Assessment Proceedings, all n tices were sent to the old mail ID hence, the appellant could not respond to the notices.

8.

It is seen from the Income Tax portal that the notice under section 143(2) was actually served upon the assessee on 1 8th December, 2017.

9.

Therefore, it is submitted that the order of Learned Assessing Officer is in violation of principles of natural justice on account of omission to serve the notice under section 143(2) within the prescribed time limit for initiation of assessment proceedings. Consequently, the impugned reassessment order is liable to be quashed.

10.

Since, the Learned Assessing Officer has not served the notice under section 143(2), 142(1) of the Income Tax Act, 1961 and issue letters, the initiation of assessment proceedings is bad in law and contrary to the provisions of the Income Tax Act.

11.

The appellant is aggrieved with the decision of the Assessing Officer and hence this appeal before the' learned Commissioner of Income Tax (Appeals).”

4. Before us, the Ld.AR has filed the condonation petition which was annexed with the form 35. It is submitted therein that the Page 3 of delay was caused due to the fact that none of the notices and the assessment order relating to assessee for the relevant Assessment Year under consideration were served on assessee and the assessee came to know about the same only on 31.01.2020 when the last day of filing the appeal had already expired. It is submitted that the address mentioned in the assessment order was not the registered address of the assessee as on the passing of the assessment order and that the assessee had changed the address on the PAN which was brought to the notice of the Ld.CIT(A). It is also submitted that the email ID of the assessee was also intimated post the assessment order to the Ld.CIT(A). However the notices by the Ld.CIT(A) were also sent to the old address which was no longer in use by the assessee.

5.

The Ld.AR thus submitted that in the interest of justice, the appeal may be remanded to the Ld.CIT(A) as the delay in filing the appeal before the Ld.CIT(A) was not because of any lapse or with any intention. The reason for delay was beyond the control of assessee. She placed reliance on the decision of Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471. We have perused the submissions advanced by both sides in the light of records placed before us.

6. When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of non deliberate delay. We have to prefer substantial justice rather than technicality in deciding the issue. As observed by Hon’ble Page 4 of Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors.(supra), if the application of the assessee for condoning the delay is rejected, it would amount to legalise injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Accordingly, we condone the delay of 386 days in filing the appeal before Ld.CIT(A).

7.

We remand this appeal back to Ld.CIT(A) with the direction to pass necessary orders on merits after considering the evidences and documents filed by assessee in respect of its claims. Needless to say that proper opportunity of being heard must be granted to assessee. In the result, the appeal filed by assessee stands allowed for statistical purposes. Order pronounced in the open court on 08th May, 2023.

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