THE ST. ANDREWS COLLEGE ASSOCIATION,CIVIL LINES vs. ASSESSINF OFFICER, NFAC, DELHI

The brief facts are that the appellant-assessee is an educational institution and running a college. According to the assessee, the college is substantially financed by the government and as such, the total income of the assessee is exempt under Section 10(23C)(iiiab) of the Act. The assessee did not file any Return of Income (RoI) for the relevant assessment year. Subsequently, on the basis of an information received from the DIT (I&CI), Lucknow, it was revealed that the assessee had made cash deposit to

The AO further found that out of total cash deposit, the assessee had failed to explain the nature and source of deposit to the tune of Rs.59,46,350/-. In such circumstances, the AO, by order dated 23.09.2021 under Section 143(3) r.w.s. 144B and 147 of the Act, made the impugned addition.

In appeal, it was contended by the assessee that the income is exempt under Section 10(23C) of the Act and the nature and source of the deposit has been properly explained. The learned CIT(A), however, has dismissed the appeal by the impugned order.

We have heard parties. Perused record.

A perusal of para 4 and 8.5 of the impugned order indicates that the appellant did not remain present as a result of which the learned CIT(A) found that the assessee inspite of grant of sufficient opportunity to explain the nature and source of the entire cash deposit, had failed to establish the same. It is in these circumstances that the impugned addition came to be confirmed.

It is contended on behalf of the assessee that the learned CIT(A) was obliged to decide the appeal on merits in view of sub-section (6) of Section 250 of the Act, the absence of the assessee notwithstanding.

We have considered the submissions made. As noticed earlier, the learned CIT(A) has principally dismissed the appeal on account of absence of the assessee and the consequent failure to explain the source of the amount in respect of which the impugned addition is made. The assessee is an educational institution. In our considered view, it would be appropriate if the assessee is granted one more opportunity to prosecute the appeal on merits and to explain the nature and source of the amount in respect of which the impugned addition is made. This will sub-serve the interest of justice.

In such circumstances, the appeal is allowed. The impugned order is set aside. The appeal is restored to the file of learned CIT(A) for disposal according to law after giving opportunity of hearing to the assessee. The assessee shall co-operate for the appropriate disposal of the appeal. The appeal is allowed for statistical purposes.