SWAJAN FOUNDATION,LUCKNOW vs. INCOME TAX OFFICER (EXEMPTION), LUCKNOW

ITA 790/LKW/2026Status: DisposedITAT Lucknow25 September 2026AY 2019-206 pages
AI SummaryAllowed

What were the facts?

The assessee, Swajan Foundation, failed to file its return of income for Assessment Year 2019-20. The Income Tax Department initiated proceedings under Section 148A of the Income Tax Act, 1961, leading to an order under Section 148A(d) holding that income had escaped assessment. A notice under Section 148 was issued, but the assessee did not respond. The Assessing Officer (AO), noting the assessee's GST registration and filings, treated it as a business entity due to lack of proof of its charitable status and the principle of mutuality. The AO estimated profit at 8% on transactions of Rs. 4,50,37,072/-, amounting to Rs. 36,02,965/-, and also added interest income of Rs. 23,796/-. The total income was assessed at Rs. 36,26,761/-. Penalty proceedings were also initiated. The assessee's appeal before the National Faceless Appeal Centre (NFAC), Delhi, was dismissed in limine for non-compliance. The assessee then appealed to the ITAT against the NFAC's order.

What did the Tribunal hold?

The Tribunal condoned the delay of 159 days in filing the appeal, accepting the assessee's explanation regarding technical difficulties in filing on the Income Tax Portal. The Tribunal noted that the AO's order was ex parte and the NFAC had dismissed the appeal in limine for non-compliance. Considering the facts, the Tribunal was of the view that the assessee deserved one more opportunity to present its case. Therefore, the order of the NFAC was set aside, and the file was restored to the Assessing Officer. The AO was directed to provide the assessee with one more opportunity to present its case. The assessee was cautioned to fully comply with the AO's directions in the set-aside proceedings, failing which the AO would be at liberty to pass an order based on available material, even if ex parte. The appeal was allowed for statistical purposes.

What were the issues?

1. Whether the CIT(A) erred in law and on facts by passing an ex parte appellate order and sustaining an ex parte assessment under Section 147 read with Sections 144 and 144B of the Income Tax Act, 1961, without providing a proper opportunity of being heard, thereby violating the principles of natural justice? 2. Whether the CIT(A) erred in law and on facts by sustaining the addition of Rs. 36,02,965/- by treating the appellant trust as a business entity and estimating income at 8% of gross transactions on a presumptive basis, without incriminating material, and ignoring its registration under Sections 12A and 80G of the Act? 3. Whether the CIT(A) erred in sustaining the addition of interest income of Rs. 23,796/- without considering that it was incidental to the trust's charitable activities? 4. Whether the CIT(A) erred in upholding the assessment order despite the AO's failure to properly appreciate the trust's activities and ignoring its trust deed, past records, and departmental portal information? Assessee's contentions (as per grounds of appeal): The CIT(A) erred in passing ex parte orders and violating natural justice. The addition of Rs. 36,02,965/- was erroneous as the assessee is a charitable institution registered under Sections 12A and 80G, and the estimation was made without material. The addition of interest income was also incorrect as it was incidental to charitable activities. The AO failed to appreciate the trust's nature and ignored available records. Revenue's contentions: The Ld. Sr. D.R. supported the orders of the authorities below and submitted that the appeal of the assessee may be dismissed.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(d),Section 147,Section 148,Section 144,Section 144B,Section 272A(1)(d),Section 270A,Section 271A,Section 271B,Section 12A,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW

Before: SHRI. SUDHANSHU SRIVASTAVA

For Respondent: Shri Suidhakar Shukla, D.R

This appeal has been preferred by the Assessee against the order dated 26.11.2025, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2019-20. 2.0 The brief facts of the case are that the assessee had not filed the return of income for the year under consideration. The Income Tax Department was in possession of information that, during the year under consideration, the assessee had undertaken certain transactions and, in this regard, an opportunity was given to the assessee as per provisions of section 148A of the Income Tax Act, 1961 (hereinafter called 'the Act’) and, subsequently, an order under section 148A(d) of the Act was passed by the Assessing Officer (AO) holding the transactions

ITA No.790/LKW/2026 undertaken by the

The order continues below.

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