ARULMIGU VETTUDAIYAR KALIAMMAN THIRUKOVIL,SIVAGANGAI vs. ITO, EXEMPTIONS WARD,, MADURAI

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ITA 2677/CHNY/2025Status: DisposedITAT Chennai01 June 2026AY 2017-186 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) should have properly examined the reasons for the delay in filing the appeal. The matter was restored to the CIT(A) to decide the condonation of delay and, if condoned, to adjudicate the appeal on merits.

What were the facts?

The assessee trust did not file its return of income for AY 2017-18. The AO made additions to income, denying exemption under sections 11 and 12 due to non-filing of return and audit report. The CIT(A) dismissed the assessee's appeal due to a significant delay in filing, without adjudicating on merits.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal in limine on grounds of delay without adjudicating the issues on merits. Whether sufficient cause existed for the delay in filing the appeal.

Which sections of the Income-tax Act were involved?

Section 11,Section 12

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI INTURI RAMA RAO & SHRI MANU KUMAR GIRI

Hearing: 28.04.2026

आदेश / O R D E R

PER MANU KUMAR GIRI, JM:

The captioned appeal filed by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi, [CIT(A)] dated 22.07.2025 for Assessment Year 2017-18.

2.

Brief facts of the case: The assessee trust is engaged in running Temple during the FY 2016-17 and from the records available, it is observed that the assessee had not filed its return of income for the

ITA No 2677/Chny/2025 (AY 2017-18) Arulmigu Vettudaiyar Kaliamman Thirukovil Vs ITO, Exemption Ward :: 2 :: year under consideration. The Assessing Officer (AO) was in receipt of information indicating cash deposits aggregating to Rs.31,97,601/- made during the demonetisation period, along with other credits reflected in the assessee's bank accounts. Accordingly, a notice u/s. 142(1) of the Income-tax Act was issued on 13.12.2017 requiring the assessee to furnish its return of income on or before 12.01.2018. The AO has recorded in the assessment order that neither the return of income nor Form No.10B was filed by the assessee up to 31.03.2018. The assessment order further details the various opportunities afforded to the assessee during the course of proceedings and the extent of compliance made in response thereto. After considering the material available on record, including the submissions furnished by the assessee, the AO completed the assessment determining the total income at Rs.1,37,60,998/-. In doing so, an addition of Rs.1,15,01,598/- representing the excess of income over expenditure for the relevant year was brought to tax by treating the assessee as an Association of Persons (AOP) and denying the benefit of exemption under sections 11 and 12 on account of failure to file the return of income and audit report within the prescribed time. A further addition of Rs.22,59,400/- was made on the ground that the contributions received were not utilized for public religious or charitable purposes.

3.

Aggrieved by the assessment order, the assessee preferred an appeal before the ld. Commissioner of Income Tax (Appeals). However, the ld. CIT(A), vide order dated 22.07.2025, dismissed the appeal in limine on the ground that there was a huge delay in filing the appeal and declined to condone the same. As a result, the issues raised by the assessee were not adjudicated on merits.

ITA No 2677/Chny/2025 (AY 2017-18) Arulmigu Vettudaiyar Kaliamman Thirukovil Vs ITO, Exemption Ward :: 3 :: 4. Aggrieved by the said order, the assessee is in appeal before this Tribunal. The assessee has prayed for condonation of delay and has also sought an opportunity to place the relevant documents and explanations before the appellate authority. 5. The ld. Authorised Representative (AR) submitted that the delay in filing the appeal before the ld. CIT(A) was neither wilful nor deliberate and occurred due to bona fide reasons beyond the control of the assessee. It was further submitted that the assessee possesses relevant documents and evidences to substantiate the source of cash deposits and that the matter deserves to be examined on merits in the interest of justice. 6. The ld. Departmental Representative (DR), on the other hand, supported the order of the ld. CIT(A) and submitted that the assessee failed to establish sufficient cause for the delay. Accordingly, he prayed for dismissal of the appeal.

7.

We have heard the rival submissions, perused the orders of the lower authorities and examined the material available on record. The short issue arising for consideration in the present appeal is whether the ld. CIT(A) was justified in dismissing the assessee's appeal in limine on the ground of delay without adjudicating the issues raised on merits.

8.

It is an undisputed fact that the assessee is a trust engaged in running a temple. The assessment was completed by the AO determining the total income at Rs.1,37,60,998/- after denying exemption under sections 11 and 12 of the Act and making additions aggregating to Rs.1,37,60,998/-. Aggrieved by the assessment order, the assessee preferred an appeal before the ld. CIT(A). However, the ld. CIT(A) dismissed the appeal on the ground

ITA No 2677/Chny/2025 (AY 2017-18) Arulmigu Vettudaiyar Kaliamman Thirukovil Vs ITO, Exemption Ward :: 4 :: that there was substantial delay in filing the appeal and declined to condone the same. Consequently, the grounds raised by the assessee challenging the additions made by the Assessing Officer were not examined on merits.

9.

Before us, the ld. Authorised Representative submitted that the delay was occasioned by bona fide reasons and was neither intentional nor deliberate. It was further submitted that the assessee is in possession of relevant records and supporting documents to explain the source of cash deposits and to substantiate its claim for exemption under the provisions of the Act. The assessee has therefore sought an opportunity to place all relevant materials before the first appellate authority.

10.

Having considered the rival submissions, we are of the view that the issue regarding condonation of delay requires a proper and comprehensive examination by the ld. CIT(A). The impugned order does not indicate that the explanation offered by the assessee was examined in detail with reference to supporting materials, if any, nor does it reflect a detailed consideration of whether sufficient cause existed for the delay. Since dismissal of the appeal on the ground of limitation results in denial of adjudication on merits, the matter requires a more thorough consideration in the interests of substantial justice. At the same time, we are of the considered opinion that the question whether the delay deserves to be condoned has to be decided by the ld. CIT(A) upon examination of the explanation, affidavit and other supporting evidence that may be furnished by the assessee. Therefore, without expressing any opinion on the sufficiency or otherwise of the reasons for the delay, we deem it fit to restore the matter to the file of the ld. CIT(A).

ITA No 2677/Chny/2025 (AY 2017-18) Arulmigu Vettudaiyar Kaliamman Thirukovil Vs ITO, Exemption Ward :: 5 :: Accordingly, we set aside the impugned order of the ld. CIT(A) and restore the matter to his file with a direction to afford adequate opportunity to the assessee to explain the delay in filing the appeal. The assessee shall be at liberty to file affidavits, supporting documents and any other evidence which may substantiate the reasons for the delay. The ld. CIT(A) shall examine the explanation furnished by the assessee and decide the issue of condonation of delay in accordance with law by passing a speaking order. In the event the delay is condoned, the ld. CIT(A) shall proceed to adjudicate the appeal on merits after granting adequate opportunity of hearing to the assessee and shall pass a reasoned order dealing with all grounds of appeal raised before him.

11.

We make it clear that we have not expressed any opinion on the merits of the additions made by the Assessing Officer and all issues relating to exemption under sections 11 and 12, taxability of the receipts, source of cash deposits and other grounds raised by the assessee are left open to be adjudicated by the ld. CIT(A) in accordance with law.

12.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on the 01st day of June, 2026, in Chennai.

Sd/- Sd/- (इंतूरी रामा राव) (मनु कुमार िग$र) (INTURI RAMA RAO) (MANU KUMAR GIRI) लेखा सद%या/ACCOUNTANT MEMBER &या�यक सद%य/JUDICIAL MEMBER

ITA No 2677/Chny/2025 (AY 2017-18) Arulmigu Vettudaiyar Kaliamman Thirukovil Vs ITO, Exemption Ward :: 6 :: चे&नई/Chennai, (दनांक/Dated: 01st June, 2026. SNDP, Sr. PS

आदेश क� ��त)ल*प अ+े*षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

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