MIDNAPORE COLLEGE,WEST MIDNAPORE vs. I.T.O., WARD - 38(1), PASCHIM MIDNAPORE

ITA 2409/KOL/2026Status: DisposedITAT Kolkata29 September 2026AY 2016-20178 pages
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What were the facts?

The assessee, Midnapore College, filed three appeals (ITA Nos. 2407, 2408 & 2409/KOL/2026) against the orders of the Commissioner of Income Tax (Appeals)-NFAC, Delhi, for Assessment Year 2016-17. The appeals were filed with a delay of 36 days, which was condoned by the Tribunal due to the assessee's explanation of a tax advocate's failure to provide timely advice. The original assessment was an ex-parte best judgment assessment under Section 147 read with Section 144 of the Income Tax Act, 1961, where cash deposits of ₹63,43,690/- were treated as unexplained income under Section 69A. The CIT(A) upheld this addition, leading to the current appeals concerning the quantum of income, penalty under Section 271(1)(b) for non-compliance with notices, and penalty under Section 271(1)(c) for alleged concealment of income.

What did the Tribunal hold?

The Tribunal noted that both the Assessing Officer and the CIT(A) had passed ex-parte orders due to the assessee's non-compliance. In the interest of justice and fair play, and considering the assessee's request for a remand to the Assessing Officer for de novo assessment with an opportunity to present sufficient evidence, the Tribunal decided to set aside both the orders of the Assessing Officer and the CIT(A). The matter was remitted to the Assessing Officer for reassessment. The assessee was directed to be given a reasonable opportunity of being heard and was cautioned against seeking unnecessary adjournments. Consequently, the grounds of appeal in ITA No. 2407/KOL/2026 were partly allowed for statistical purposes. For ITA Nos. 2408/KOL/2026 (penalty under Section 271(1)(b)) and 2409/KOL/2026 (penalty under Section 271(1)(c)), since the quantum appeal was set aside and the assessment was to be done afresh, the orders of the lower authorities were also set aside and remitted to the Assessing Officer with a direction to reframe the penalty orders after the finalization of assessment proceedings. All grounds in these penalty appeals were also partly allowed for statistical purposes. The Tribunal did not decide the substantive issues of addition and penalties on merits.

What were the issues?

1. Whether, on the facts and in law, the CIT(A) erred in dismissing the assessee's plea regarding violation of natural justice and upholding the ex-parte best judgment assessment order passed under Section 147 r.w.s. 144 of the Act, when non-compliance with notices under Section 142(1) was involuntary due to the inaugural year of digital e-compliance and the assessee's lack of technical familiarity, constituting a reasonable cause. 2. Whether, on the facts and in law, the CIT(A) erred in confirming the addition of ₹63,43,690/- by treating valid cash deposits as deemed income under Section 69A of the Act, given that the assessee is a government-aided college and the deposits represent standard academic and institutional fees collected from students. 3. Whether, on the facts and in law, the CIT(A) erred in upholding the penalty of ₹20,000/- under Section 271(1)(b) for alleged non-compliance with notices under Section 142(1), when the non-compliance arose from a bona fide oversight and technical glitches by the counsel, constituting a reasonable cause under Section 273B of the Act. 4. Whether, on the facts and in law, the CIT(A) erred in upholding the penalty of ₹19,60,200/- levied under Section 271(1)(c) for alleged concealment of income, when the addition was based on full disclosure and the deposits represented academic fees, and a difference of opinion does not equate to concealment, as per CIT vs. Reliance Petroproducts Pvt. Ltd. Assessee's Contentions: The assessee argued that the non-compliance with notices was involuntary due to technical unfamiliarity with the e-portal in the inaugural year of digital compliance, constituting a reasonable cause. The cash deposits of ₹63,43,690/- were standard academic and institutional fees collected from students and thus not unexplained money under Section 69A. The assessee is a government-aided college eligible for exemption under Section 10(23C). The penalties under Sections 271(1)(b) and 271(1)(c) were also unjustified as the non-compliance and alleged concealment arose from bona fide reasons and a difference of opinion, not deliberate evasion. The assessee sought remand to the Assessing Officer for de novo assessment with sufficient evidence. Revenue's Contentions: The Revenue relied on the orders of the CIT(A), stating that the assessee had not complied with the notices issued.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 69A,Section 115BBE,Section 271(1)(b),Section 271(1)(c),Section 273B,Section 10(23C)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH AT KOLKATA

Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

These three appeals filed by the assessee are against the separate orders of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 [the ITA No(s). 2407, 2408 & 2409/KOL/2026 Assessment Year(s) 2016-17 Midnapore College. 'Act'] for AY 2016

The order continues below.

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