SADHUBELLA EDUCATION SOCIETY ,MUMBAI vs. ITO EXEMPTION 2(3), MUMBAI

This appeal by the assessee is preferred against the order dt. 08/02/2024 by NFAC, Delhi [hereinafter “the ld. CIT(A)”] pertaining to AY 2015-16.

The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in confirming the addition of Rs. 54,90,510/- by disallowing the exemption u/s 11 of the Act on the ground that registration u/s 12A (2) of the Act has been granted w.e.f. FY 2016-17 and further erred in no considering the proviso to Section 12A(2) of the Act and provisions u/s 11 and 12 of the Act. 3. There is a delay in filing the appeal. The assessee has filed an affidavit explaining the facts causing the delay. We have carefully considered the contents of the affidavit. We are of the considered view 2 that the assessee was prevented by reasonable and sufficient cause for not filing the appeal in time. Therefore, the delay is condoned. 4. Coming to the facts of the case, the assessee filed its return of income on 16/03/2017 along with income and expenditure account, balance sheet and audit report in Form No. 10B declaring total income at Rs. Nil. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. The assessee responded to the queries raised from time to time. On perusal of the details furnished by the assessee, the AO found that the assessee has claimed exemption u/s 11 of the Act, however, the AO notice that the ld. CIT(E) has granted the registration only w.e.f. FY 2016- 17. The AO accordingly denied the benefits of Section 11 of the Act and assessed income at Rs. 54,90,510/-. The assessee agitated the matter before the ld. CIT(A) but without any success. In fact on perusal of the order of the ld. CIT(A), we find that the appeal has been dismissed in limine for want of prosecution. 5. We have given a thoughtful consideration to the orders of the authorities below. It is an undisputed fact that the ld. CIT(A) has dismissed the appeal in limine without going into the merits of the case and without examining the applicability of the proviso to Section 12A(2) of the Act. Therefore, in the interest of justice and fairplay, we deem it fit to restore the appeal to the files of the ld. CIT(A) with a direction to decide the appeal afresh after affording a reasonable and adequate opportunity of being heard to the assessee and after considering the proviso to Section 12A(2) of the Act.

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