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Facts
The assessee, a charitable organization, filed its return declaring Nil income. The AO initially assessed Nil income but later erroneously computed a total income of Rs. 9,66,49,100/- in the computation sheet. The CIT(A) dismissed the appeal.
Held
The Tribunal found the CIT(A)'s action to be inexplicable and restored the issue to the AO. The AO is directed to recompute the tax liability after affording a reasonable opportunity of hearing to the assessee.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal without adjudicating the grounds of appeal concerning the tax computation, and whether the AO erred in the computation of total income.
Sections Cited
12A
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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, HON’BLE & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE
O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the assessee is preferred against the order of the NFAC, Delhi [hereinafter “the ld. CIT(A)”] dated 03/03/2025 pertaining to AY 2016-17.
The solitary grievance of the assessee relates to the incorrect determination of the total income in the computation sheet. 3. Briefly stated the facts of the case are that the assessee filed its return of income on 16/10/2016 along with the income and expenditure account, balance sheet and audit report in Form 10B declaring total income at Nil. The assessee is a registered charitable organization with Charity Commissioner and ld. CIT(E), Mumbai, u/s 12A of the Act. The main object of the assessee trust is imparting education through educational institutions known as Utpal Shanghvi Global School and 2 Prabhavati Padamshi Soni International Junior College. After examining the return of income, the AO assessed the total income of the assessee at Nil. However, in the computation sheet, the AO erroneously determined the total income at Rs. 9,66,49,100/- and computed the tax liability accordingly. When this was challenged before the ld. CIT(A), the ld. CIT(A) simply rubbished the appeal of the assessee by stating that the assessee’s grounds of appeal
do not arise out of the assessment order and tax computation does not require any separate adjudication.
4. We fail to understand this action of the ld. CIT(A) as the assessee can always challenge the tax liability before the appellate authority. Be that as it may, we restore this issue to the file of the AO. The AO is directed to recompute the tax liability on the assessed income at Nil, after affording a reasonable and adequate opportunity of being heard to the assessee.