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Facts
The assessee, a charitable trust, claimed exemption under Section 11 read with Section 2(15) of the Income Tax Act for AY 2017-18. The AO disallowed the exemption, treating the income from hiring assets to non-members as taxable. The CIT(A) upheld the AO's order ex-parte.
Held
The Tribunal noted that the issue had been decided in favour of the assessee in previous years by the High Court and ITAT. However, since the CIT(A) order was passed ex-parte and the assessee missed a reasonable opportunity to present its case, the matter was remanded.
Key Issues
Whether the CIT(A) order passed ex-parte without giving the assessee a reasonable opportunity of being heard is sustainable and whether the income from hiring assets to non-members is eligible for exemption.
Sections Cited
12A, 2(15), 11, 139, 143(3), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRINARENDRA KUMAR BILLAIYA & SHRI ANIKESH BANERJEE
Per Anikesh Banerjee (JM): The instant appeal by the assesseewas filed against the order of the National Faceless Appeal Centre, Delhi*in short,’Ld.CIT(A)’], passed under section 250 of the Income-tax Act, 1961(in short, ‘the Act’), date of order 15-10-2024 for A.Y. 2017-18. The impugned order emanated from the order of the Learned Assistant Commissioner of Income-tax (Exemption), Circle-1, Mumbai (in short the “Ld. AO”),passed under section 143(3), date of order 18/12/2019.
2 ITA 559/Mum/2025 Goregaon Sports Club 2. The brief facts of the case is that the assessee is a charitable trust registered as charitable organization with the CIT(E), Mumbai under section 12A of the Act bearing registration No.INS/13638 dated 21/06/1980. The assessee is also registered under Societies Registration Act, 1860. The main objects of the assessee are to encourage physical education of training and coaching for various sports discipline and to provide and facilitate indoor and outdoor games. The assessee filed the return under section 139 and claimed exemption under section 11 read with section 2(15) of the Act. The assessee carrying on the said activities for 15 years. The assessee’s case was selected for scrutiny. Finally, the order was passed and the Ld.AO observed that major activities of the assessee is hiring assets to non members for celebration purpose and therefore, assessee is not eligible for deduction under section 11 of the Act. Finally, the Ld.AO ascertained the gross income amount to Rs.19,23,85,823/- and after deducting the expenses amount to Rs.13,28,47,019/-, the balance amount is treated as taxable income which is amount to Rs.5,95,38,804/- and added back with the total income of the assessee. The assessee filed appeal before Ld. CIT(A). The Ld.CIT(A) passed an exparte order and upheld the impugned assessment order. Being aggrieved, the assessee filed an appeal before us.
The Ld. AR filed a written submission comprising pages 1 to 159. The Ld. AR submitted that the appealwas completed ex parte and the assessee was ono- complied during assessment proceeding. However, the issue in question has already been adjudicated upon by the Hon’ble Bombay High Court in relation to A.Y. 2010–11, and the Coordinate bench of ITAT-Mumbai has also decided the same issue in favour of the assessee. In support of this, the assessee placed reliance on the order of the ITAT, Mumbai Bench “G” in ITA No. 7033/Mum/2016,
3 ITA 559/Mum/2025 Goregaon Sports Club pronounced on 16/05/2018. The Ld. AR contended that the impugned issue stands covered in favour of the assessee.
The Ld. DR contended that the Ld. CIT(A) failed to consider the issue in light of the documents placed before him. The Ld. DR further submitted that the appellate order was passed ex parte, as the assessee was unable to appear and produce the requisite materials before the Ld. CIT(A).
We have heard the rival submissions and perused the material available on record. We find that the addition of Rs.5,95,38,804/- made by the Assessing Officer has already been considered by the Coordinate Bench of the ITAT, Mumbai in other assessment years. However, it is evident that the assessee was unable to furnish all the relevant documents before the Ld. CIT(A), thereby missing a reasonable opportunity to present its case. Accordingly, we deem it appropriate to remand the matter to the file of the Ld. CIT(A) for fresh adjudication after affording the assessee a reasonable opportunity of being heard. We are refraining from expressing any opinion on the merits of the case so as not to prejudice the outcome of the de novo appellate proceedings. Needless to state, the assessee shall be granted a fair and reasonable opportunity to present its case during the set-aside proceedings. Conversely, the assessee is expected to act diligently and extend full cooperation in the remanded appellate proceedings.
4 ITA 559/Mum/2025 Goregaon Sports Club 6. In the result, appeal bearing