EPIPHANIA LUTHERAN CHURCH,RAJAHMUNDRY vs. INCOME TAX OFFICER, WARD 1, RAJAHMUNDRY

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ITA 317/VIZ/2026Status: DisposedITAT Visakhapatnam28 October 2026AY 2019-205 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, after hearing both parties, observed that both orders below were passed ex-parte due to non-prosecution by the assessee. In the interest of justice and fair play, the Tribunal set aside the matter to the file of the Assessing Officer for re-examination of the issues. The assessee was directed to be afforded a reasonable opportunity of being heard and to comply with notices issued by the AO during remand proceedings. The Tribunal imposed a cost of Rs.10,000/- on the assessee, payable to the AP State Legal Services Authority, with proof to be submitted to the CIT(A). The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Epiphania Lutheran Church, an Association of Persons, failed to file its return of income for Assessment Year 2019-20. The Assessing Officer (AO) noted cash deposits of Rs.123.95 lakhs, time deposits of Rs.30.89 lakhs, and interest income of Rs.17.41 lakhs, deeming these as unexplained income. The AO reopened the case under Section 147 and passed an assessment order under Section 147 read with Sections 144/144B, determining total income at Rs.1,41,36,000/-. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)] but with a delay of 227 days. The CIT(A) dismissed the appeal in limine due to the delay, without adjudicating on merits.

What were the issues?

1. Whether the CIT(A) erred in dismissing the appeal on the ground of delay of 227 days without properly appreciating that the appellant was prevented by sufficient and bona fide cause and by not judiciously exercising discretion under Section 249(3) of the Income Tax Act, 1961, and further erred in not adjudicating the issues on merits? Assessee's Contention: The assessee argued that the delay was due to the ill-health of a representative handling tax matters. The CIT(A) dismissed the appeal on technicalities without considering the merits. The assessee sought another opportunity by setting aside the matter to the AO for fresh examination. Revenue's Contention: The Learned Departmental Representative supported the decisions of the authorities below. 2. Whether the assessment order passed under Section 147 read with Sections 144 and 144B is bad in law as no proper and effective opportunity of being heard was provided to the appellant? 3. Whether the AO erred in assuming jurisdiction under Section 147 without valid reasons to believe that income had escaped assessment, making the notice under Section 148 and the consequent assessment bad in law?

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 148,Section 249(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI SONJOY SARMA, HON’BLE & SHRI OMKARESHWAR CHIDARA, HON’BLE

PER SONJOY SARMA, JM: This appeal is filed by the Assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN & Order No: ITBA/NFAC/S/250/2025-26/1085298703(1) dated 29-Jan-2026 for the Assessment Year 2019-20.

2.

The Assessee has raised the following grounds of appeal:

“1. The order passed by the learned Commissioner of Income Tax (Appeals) is contrary to law, facts, and circumstances of the case and is liable to be set aside. 2. The learned CIT(A) erred in law and on facts in dismissing the appeal on the ground of delay of 227 days without properly appreciating that the appellant was prevented by sufficient and bona fide cause from filing the appeal within the prescribed time, and further failed to exercise the discretion vested under section 249(3) judiciously by not condoning the delay. The learned CIT(A) also erred in dismissing the appeal without adjudicating the issues on merits. 3. In the facts and circumstances of the case, the assessment order passed under section 147 read with sections 144 and 144B is bad in law as no proper and effective opportunity of being heard was provided to the appellant. 4. The learned Assessing Officer erred in assuming jurisdiction under section 147 without valid reasons to believe that income had escaped assessment. The notice issued under section 148 is bad in law and the consequent assessment is liable to be quashed.”

3.

Brief facts of the case are that, the assessee is an “Association of Persons” [in short “AOP”] and did not file its return of income for the A.Y. 2019-2020. As per the information available on record, the Assessing Officer [in short “Ld.AO”] noticed that, assessee had deposited cash amounting to Rs.123.95 lakhs in one or more bank accounts, made time deposits of Rs.30.89 lakhs, and interest income of Rs.17.41 lakhs, during the assessment year in question. It was found that, no return of income had been filed by the assessee, therefore, the above transactions were found to be unexplained income in the hands of the assessee. The case of the assessee was reopened under Section 147 of the Act, and an assessment order was passed under Section 147 r.w.s 144/144B of the Act, determining the total income at Rs.1,41,36,000/-.

4.

Aggrieved by the above order, the assessee filed an appeal before the Ld.CIT(A) with a considerable delay of 227 days. Due to the above reason, the Ld. CIT(A) dismissed the appeal of the assessee in limine without adjudicating the issues on merits. Still aggrieved by the above order, the assessee is in appeal before this Tribunal.

5.

At the time of hearing, the Authorised representative stated that, due to ill- health of the one of the representatives, who was taking care of income tax matters was facing significant health issues, therefore appeal of the assessee could not be filed in time before the Ld. CIT(A) in time. However, the Ld. CIT(A) pleased to dismiss the appeal on the issue of technicalities without looking into the merits of the case. He, therefore prayed that another opportunity may be given to the assessee by setting aside the matter to the file of the Assessing Officer, with a direction to re-examine the issue afresh.

6.

On the other hand, the Learned Departmental Representative, supported the decisions of the authorities below.

7.

We after hearing the rival submissions of the parties and perusing the material available on record, Prima facie, we find that both the orders of the authorities below were passed exparte due to non-prosecution, on the part of the assessee. However, in the interest of justice and fair play, we deem it fit to set aside the matter to the file of the Assessing Officer to reexamine the issues afresh, after affording reasonable opportunity of being heard to the assessee. The assessee is also directed to comply with the notices issued by the Assessing Officer during the remand proceedings without any fail.

8.

While parting with this order and looking into the conduct of Assessee, we impose cost of Rs.10,000/- (Rupees Ten Thousand only) from the Assessee, which Assessee shall be deposited in “AP State Legal Services Authority” and copy of the same should be produced before the Ld. CIT(A) to prove that cost has been deposited.

9.

In terms of the above, appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 28th October, 2026.

Sd/- Sd/- OMKARESHWAR CHIDARA SONJOY SARMA ACCOUNTANT MEMBER JUDICIAL MEMBER Visakhapatnam Dated: 28.10.2026 Giridhar, Sr.PS Copy to:

EPIPHANIA LUTHERAN CHURCH, D.NO 2-34-2/1, ALCOT GARDENS, 1 RAJAHMUNDRY-533101, ANDHRA PRADESH

INCOME TAX OFFICER, WARD 1, AAYAKAR BHAWAN, 2 VEERABHADRAPURAM, RAJAHMUNDRY-533105, ANDHRA PRADESH 3 THE PCIT / CIT, 4 THE D.R., ITAT, VISAKHAPATNAM BENCH 5 GUARD FILE

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