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Facts
The assessee, a trust, appealed an order that confirmed an addition of Rs. 5,29,842/- in taxing its gross receipts. The original assessment disallowed deductions under section 11 as the assessee did not file Form 10B and was not registered under section 12A/12AA.
Held
The Tribunal held that the assessee was not properly served notice by the CIT(A) on the specified e-mail address. Considering the peculiar facts, the assessee was allowed one more opportunity to contest the case at the CIT(A) stage.
Key Issues
Whether the assessee was properly served notice by the lower authorities, and if not, whether the appeal should be remanded for fresh adjudication.
Sections Cited
250, 1961, 12A, 12AA, 11
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Date of Hearing – 26/03/2025 Date of Order – 21/04/2025
Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. The appeal by the assessee is directed against the order passed by the CIT(A), NFAC, Hyderabad dated 22.11.2024 passed under section 250 of the Income Tax Act, 1961 (“the Act”) for the assessment year 2017-18. The grounds of appeal raised by the assessee read as under:
1. In the facts and circumstances of the case and in law, the learned Commissioner of Income tax (Exemptions) has erred in confirming the addition of Rs. 5,29,842/- in taxing the whole gross receipts of the trust.
2. In the facts and circumstances of the case and in law, the learned Commissioner of Income tax (Exemptions) has erred in confirming the denying the claim of expenditure incurred towards the objects of the trust.
In the facts and circumstances of the case and in law, the Ld.Commissioner of Income tax (Exemptions) has erred in not giving proper opportunity of being heard to the assessee and thereby violated the principles of natural justice.” 2. The rival submissions of both the parties have been heard and record perused. The learned Authorised Representative (ld.AR) of the assessee submitted that he has made a very limited prayer before this Bench. The ld. AR of the assessee submits that while fling appeal before ld. CIT(A), the assessee for the purpose service of notice provided e-mail address rastriya@gmail.com. Same e-mail was provided while filing return of income. However, in the particulars of assessee, the assessee has mentioned e-mail address of one of the trustee, i.e., info@ratanchand.co.in. However, for the purpose of service of notice, the assessee specifically given different e-mail Id and mobile number no such notice was issued by ld. CIT(A) on the e-mail specifically provided for service of notice under section 250. Notice sent on the personal e-mail ID of Trustee could not be noticed as they are not well versed with operation of e-mails. The learned AR of the assessee submits that appeal of the assessee was dismissed for want of submission without adjudicating merit of the case. The ld. AR submits that assessee has good case on merit and is likely to succeed if one more opportunity is given to contest the grounds of appeal
on merit and the matter may be restored back to the file of ld. CIT(A). He undertakes on behalf of the assessee to be more vigilant in future and to make timely compliance of the notice issued.
3. On the other hand, ld. Senior Departmental Representative (ld. Sr.DR) for the Revenue submits that in Form 35 the assessee was providing e-mail of trustee as mentioned in Column No.1 in Form 35 against the e-mail address of info@ratanchand.co.in mentioned “yes”. Thus the notice was sent at the e-mail provided by assessee itself. The ld. Sr. DR for the Revenue submits that when no written submission was filed, the ld. CIT(A) has no option to decide the appeal on merit on the material available on record.
4. We have considered both the parties and have gone through the orders of the lower authorities carefully. We find that assessee is a trust registered with Charitable Commissioner Mumbai. While filing return of income, the assessee has shown total receipt of Rs.5,29,840/-. However audit report in Form 10B was not filed. During the assessment, the AO noted that the assessee is not registered under section 12A/12AA. Thus, the AO has not allowed the application under section 11 by taking a view that neither the assessee furnished Form 10B before filing return of income nor assessee is registered under section 12A/12AA. Thus, the entire receipt of the assessee of Rs.5,29,840/- is treated as income of the assessee. On appeal before ld. CIT(A), the action of the AO was upheld inex-parte order. The ld. CIT(A) while confirming the action of the AO held that assessee was given seven opportunities to furnish written submission. Even on merit, the ld. CIT(A) concur with the action of the AO. We find that before us, the ld. AR of the assessee had made a very limited prayer for restoring of appeal to the file of the ld. CIT(A) on the ground that notice on a specified e- mail provided for the purpose of communication of notices was not sent. Considering the fact that ld. CIT(A) has sent the notice on other than e-mail provided for the purpose of service of notice. We find that the assessee is interested in pursuing his appeal on merit. Therefore, considering the peculiar facts of the case, the assessee is allowed one more opportunity to contest the case at the stage of ld. CIT(A).
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 21/04/2025.