RKKR FOUNDATION,CHANDIGARH vs. DCIT, EXEMPTION CIRCLE 1, CHANDIGARH, CHANDIGARH

ITA 477/CHANDI/2024Status: DisposedITAT Chandigarh28 September 2026AY 2018-1918 pages
AI SummaryRemanded

What were the facts?

The assessee, RKKR Foundation, filed an appeal against the order of the CIT(A)/NFAC, Delhi dated 28.02.2024 for Assessment Year 2018-19. The assessee's appeal before the CIT(A) was dismissed ex-parte. The assessee contended that the CIT(A) erred in passing an ex-parte order without considering submissions, without granting a personal hearing, and without issuing a show-cause notice. The assessee also challenged the validity of the assessment order passed by the jurisdictional assessing officer under section 143(3) on grounds of lack of jurisdiction and limitation. Furthermore, the assessee raised substantive issues regarding the disallowance of donations, disallowance of agricultural expenses, and addition of income from transfer/redemption of bonds and FDs. The assessee also challenged the levy of interest under sections 234B and 234C and initiation of penalty under section 270A.

What did the Tribunal hold?

The Tribunal noted that the assessee's counsel declined to advance arguments on the merits of the additions, confining submissions to jurisdictional and limitation issues. The Tribunal observed that the CIT(A) had dismissed the appeal ex-parte after granting multiple opportunities, which the assessee challenged. However, the Tribunal also noted that the issues relating to jurisdiction and limitation, specifically raised before the CIT(A), had not been appropriately adjudicated in a speaking order due to the assessee's non-compliance. Considering the failure of the assessee to properly assist the first appellate authority and the Tribunal on the merits, and the lack of proper adjudication on jurisdictional and limitation issues, the Tribunal deemed it appropriate in the interest of justice to restore the matter to the file of the CIT(A) for fresh adjudication. The impugned order of the CIT(A) was set aside, and the matter was remanded for a comprehensive, reasoned, and speaking order on all grounds, including jurisdictional/legal grounds and merits, after affording adequate opportunity to both parties. The Tribunal explicitly stated it expressed no opinion on the merits of the issues.

What were the issues?

1. Whether the CIT(A) erred in law and on facts by dismissing the assessee's appeal ex-parte, violating principles of natural justice and procedural fairness, as per grounds 1, 1.1, 1.2, 1.3, and 1.5. 2. Whether the assessment order passed by the jurisdictional assessing officer under section 143(3) is without jurisdiction, barred by limitation, and illegal, as per grounds 2, 2.1, 2.2, 2.3, and 2.4. 3. Whether the CIT(A)/assessing officer erred in disallowing the donation of Rs. 70,00,000 to Unique Social Foundation as application of income by treating it as corpus donation, contrary to Explanation 2 to section 11(1) (Grounds 3 and 3.1). 4. Whether the CIT(A)/assessing officer erred in holding that donations of Rs. 3 crore and IDBI bonds of Rs. 11.05 crore to IILM Education Trust were violative of section 13(1)(c) due to alleged related entities, without appreciating their independent status and the utilization of funds (Grounds 4, 4.1, 4.2, and 4.3). 5. Whether the CIT(A)/assessing officer erred in disallowing agricultural expenses of Rs. 17,01,548, holding they were not for the trust's aims and objects, despite land being used pending change of use and the activity being within the trust deed scope (Grounds 5 and 5.1). 6. Whether the CIT(A)/assessing officer erred in treating bonds of Rs. 11,05,90,040 and FDs of Rs. 9,82,25,550 as income under section 11(3) for ceasing to remain invested in prescribed modes, without appreciating that investments were from general funds and redemption of FDs was to a specified mode (Grounds 6, 6.1, and 6.2). 7. Whether the CIT(A)/assessing officer erred in levying interest under sections 234B and 234C (Ground 7). 8. Whether the CIT(A)/assessing officer erred in initiating penalty under section 270A for underreporting of income due to misreporting (Ground 8). Assessee's Contentions: The assessee argued that the ex-parte dismissal was bad in law. It contended that the assessment order was without jurisdiction and barred by limitation. On merits, it argued that donations were general, not corpus; the relatedness to IILM Edu was baseless; agricultural expenses were within the trust deed; investments in bonds and FDs were from general funds and their redemption was to a permissible mode. The assessee also challenged interest and penalty. Revenue's Contentions: The judgment does not record specific contentions from the Revenue on the merits of the grounds.

Which sections of the Income-tax Act were involved?

Section 11(1),Section 11(2),Section 11(3),Section 11(5),Section 13(1)(c),Section 13(3),Section 143(3),Section 144B,Section 153,Section 234B,Section 234C,Section 270A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
आयकर अपीलीय अिधकरण,च"ीगढ़ "ायपीठ “बी” , च"ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: VIRTUAL MODE "ी लिलत कुमार, "ाियक सद" एवं "ी िवजय वमा" , लेखा सद" BEFORE: SHRI. LALIET KUMAR, JM & SHRI. VIJAY VARMA, AM आयकर अपील सं./ ITA No. 477/Chd/ 2024 िनधा"रण वष" / Assessment Year : 2018-19 RKKR Foundation The DCIT बनाम Rai Complex, Sector 48B, Exemption Circle-1 Chandigarh-160047 Chandigarh "ायी लेखा सं./PAN NO: AAHFR7133C अपीलाथ"/Appellant ""थ"/Respondent िनधा"रती की ओर से/Assessee by : Shri Rahul Srivastava, Advocate राज" की ओर से/ Revenue by : Smt. Kusum Bansal, Pr. CIT, DR सुनवाई की तारीख/Date of Hearing : 09/09/2026 उदघोषणा की तारीख/Date of Pronouncement : 28/09/2026

आदेश/Order PER VIJAY VARMA, A.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 28/02/2024 for the Assessment Year 2018-19. 2. In the present appeal Assessee has raised following grounds: Re: Ex-parte dismissal of first appeal - invalid

1.

That on the facts and circumstances of the case and in law, the order dated 28.02.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeals Centre [`CIT(A)'] is bad in

The order continues below.

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