LOKMANYA MEDICAL FOUNDATION,CHINCHAWAD vs. DCIT (EXEMPTION), PUNE, PUNE

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ITA 1099/PUN/2026Status: DisposedITAT Pune25 May 2026AY 2020-213 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that substantial justice is more important than procedural delay, especially when the CPC incorrectly taxed entire receipts instead of only income. Therefore, the CIT(A) was directed to condone the delay and decide the appeal on merits.

What were the facts?

The assessee, a charitable trust running a hospital, claimed exemption under Section 11 of the Income Tax Act. The CPC disallowed this exemption and taxed the entire receipts without considering expenditures. The appeal to the CIT(A) was filed with a significant delay.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal solely on grounds of delay, and whether the CPC's action of taxing entire receipts instead of income was permissible.

Which sections of the Income-tax Act were involved?

Section 11,Section 143(1),Section 139(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI Dr. DIPAK P. RIPOTE & SHRI VINAY BHAMORE

For Appellant: Shri Hari Krishan
For Respondent: Shri Amol Khairnar, CIT-DR

PER Dr. DIPAK P. RIPOTE, A.M : These two appeals have been filed by the assessee against the order of the ADDL/JCIT(A)-Delhi passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY. 2020-21 on 19-02-2026, emanating from the Assessment Order u/s 143(1) of the Act, passed by the CPC on 24-12-2021.

2.

Submission of Ld.AR: Ld.AR submitted that these are two appeals filed by the assessee against one order of the Ld.CIT(A). Inadvertently, the assessee has filed two appeals. Ld.AR submitted that one appeal may be dismissed as unadjudicated being duplicate in nature.

2.1. The Ld.AR submitted that assessee had filed return of income on 13- 02-2021 for AY. 2020-21 which was within the time allowed, as CBDT had extended the date of filing of return to 15-02-2021. Assessee had claimed exemption u/s. 11 of the Act being a charitable trust and shown NIL income. Assessee is running a hospital. However, CPC has disallowed assessee’s claim for exemption u/s. 11 of the Act, without providing any opportunity. Ld.AR submitted that apparently it seems that exemption was

ITA Nos. 1099 & 1283/PUN/2026

denied on the ground of delay in filing audit report, but assessee had filed audit report in time. Ld.AR further submitted that there is no specific reason mentioned in the order u/s. 143(1) of the Act for denying exemption. Assessee filed appeal before the Ld.CIT(A) which was delayed by 485 days. Assessee filed affidavit of the Managing Trustee explaining the reasons for delay. Ld.AR submitted that there was a change in the tax practitioner and that caused the delay, as earlier tax practitioner had not shared all the documents. Ld.AR submitted that grave injustice has been caused to the assessee by Ld.CIT(A) by not admitting the appeal. In this case, entire receipts have been taxed u/s. 143(1) of the Act, whereas in the Income Tax Act, only income cab be taxed. Ld.AR submitted that Ld.CIT(A) may be directed to condone the delay and decide the appeal on merits.

3.

Submission of Ld.DR: The Ld.DR relied on the order of the AO and the Ld.CIT(A). However, Ld.DR accepted that only income can be taxed and CPC has erred in taxing entire receipts.

4.

Findings and Analysis: We have heard both the parties and perused the records. In this case assessee had filed return of income on 13-02-2021 u/s. 139(1) of the Act claiming exemption u/s. 11 of the Act. The CPC has denied exemption vide order u/s. 143(1) of the Act. The CPC taxed the entire receipts as income of the assessee without considering the expenditures claimed by the assessee. Aggrieved by the assessment order, the assessee filed an appeal before the Ld.CIT(A) with a delay.

4.1. In this case, the Ld.CIT(A) dismissed the appeal on account of delay. The substantial justice is more important than procedural delay. Admittedly, in this case, CPC has taxed the entire receipts which is not permissible under the Income Tax Act. Under the Income Tax Act only Income can be taxed. Therefore, we agree with the Ld.AR that grave injustice has been caused. In these facts and circumstances of the case, we direct the Ld.CIT(A) to condone the delay and decide the appeal on merits. Accordingly, grounds of appeal raised by the assessee are allowed

ITA Nos. 1099 & 1283/PUN/2026

for statistical purposes. Thus, appeal No. 1283/PUN/2026 is treated as allowed for statistical purposes. Appeal No. 1099/PUN/2026 is dismissed as duplicate appeal.

5.

In the result, the appeal of the assessee in ITA No. 1283/PUN/2026 is allowed for statistical purposes and appeal in ITA No. 1099/PUN/2026 is dismissed as duplicate appeal.

Order pronounced in the open Court on 25th May, 2026

Sd/- Sd/- (VINAY BHAMORE) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/Pune; दिन ांक/Dated : 25-05-2026 TNMM

आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: अपील र्थी / The Appellant 1. प्रत्यर्थी / The Respondent 2. 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘A’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

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