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Facts
The assessee, a charitable trust, filed its return for AY 2015-16. The assessment order was passed under Section 143(3) by the AO, and the CIT(A) dismissed the appeal. The assessee appealed to the tribunal, raising grounds including lack of opportunity and non-consideration of documents.
Held
The tribunal noted that the CIT(A) order did not provide details of hearing or notices and that the email address for notices was incorrect. The tribunal set aside the CIT(A)'s order and restored the issues to the AO for fresh adjudication after granting an opportunity of being heard.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without providing a proper opportunity of hearing and considering the assessee's submissions and documents.
Sections Cited
250, 143(3), 11, 234B
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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
order : 28.03.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member:
1. 1. The present appeal preferred by the Assessee is directed against the order, dated 02/12/2024, passed by the National Faceless Appeal Centre (NFAC) [hereinafter referred to as ‘the CIT(A)’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 22/12/2017, passed under Section 143(3) of the Act for the Assessment Year 2015-2016.
2. The Assessee has raised following grounds of appeal : “1. The Learned Commissioner of Income Tax (Appeals)-NFAC ("Ld. CIT(A)") has erred in dismissing the appeal without giving due opportunity of being heard. On the facts and circumstances of the case and in law, the order passed by the CIT(A) is unjustified and is against the principal of natural justice.
1. Assessment Year 2015-2016
The Ld. CIT(A) has erred in confirming the action of Ld. AO of "converting limited scrutiny into complete scrutiny without complying with the instructions given in Instruction no. 5/2016 dated 14.07.2016 and making additions on the issues which was not the reasons of limited scrutiny" without dealing with the same. On the facts and circumstances of the case, the assessment order passed under section 143(3) of the Act is without jurisdiction and ought to be quashed.
Without prejudice to ground no. 1 and 2. L.d. CIT(A) has erred in confirming the action of Ld. AO of denying exemption under section 11 of the Income-tax Act on the grounds that the appellant has carried out commercial activity. On the basis of facts and circumstances of the case and in law, the exemption u/s 11 of the Act ought to be allowed. 4. Without prejudice to ground no. 1. 2 and 3. the Ld. CIT(A) has erred confirming the action of Ld. AO in taxing the entire income instead of income of Rs.25.24,000/- (i.e. alleged income from commercial activity). On the basis of facts and circumstances of the case and in law, income taxable, if any, ought to be restricted to Rs.25,24,000/-. 5. Without prejudice to ground no. 1. 2. 3 and 4. the L.d. AO has erred in not allowing donation of Rs.19.20,000/- as an expenditure while computing taxable income. On the basis of facts and circumstances of the case and in law, donations made of Rs. 19,20,000/- ought to be allowed as an expenditure while computing taxable income. 6. The Ld. CIT(A) has erred in confirming action of Ld. AO of not granting TDS credit of Rs. 50,480/- without dealing with the same. On the basis of the facts and circumstances of the case and in law, Ld. AO ought to have granted TDS credit of Rs.50,480/- to the appellant. 7. The Ld. AO has erred in levying interest under section 234B of the Act amounting to Rs.8.55.638/-, On the facts and circumstance of the case and in law, the interest levied under section 234B ought to be deleted.” 3. The relevant facts in belief are that Assessee, a charitable trust filed return of income for Assessment Year 2015-2016 on 29/09/2015. The case of the Assessee was selected for scrutiny and assessment under Section 143(3) of the Act was framed on the Assessee vide Assessment Order, dated 22/12/2017, and the income of the Assessee was assessed at INR.51,92,367/- after disallowance claim of exemption under Section 11 of the Act and bringing to tax excess 2 Assessment Year 2015-2016 of receipt over expenditure of INR.25,24,000/- as business income of the Assessee. The appeal preferred by the Assessee against the aforesaid Assessment Order was dismissed vide order dated 02/12/2024 passed by the Learned CIT(A). Therefore, the Assessee has preferred the present appeal before the Tribunal on the ground reproduced in paragraph 2 above.
We have heard both the sides and have perused the material on record.
The Learned Authorised Representative for the Assessee appearing before us has sought setting aside of the impugned order on the ground that the notice of hearing were not served upon the Assessee. It was also contended that even during the assessment proceedings the submission/documents filed by the Assessee were not considered by the Assessing Officer and therefore, issues be restored to the file of the Assessing Officer. Per contra, it was contended by the Learned Departmental Representative that there was no infirmity in the order passed by the CIT(A).
In view of the above submission, we have perused the material on record. On perusal of record we find that the email address specified in appeal in Form 35 filed by the Assessee challenging the Assessment Order, the email address specified was amit.shah@nashah.com and the Assessee had not opted for receipt of notices/communications over email. However, on perusal of the printout of Income Tax Business Application Portal (placed at Page No. 43 of the paper book filed by the Assessee) we find that the notice of hearing has been issued by the Learned CIT(A) at email address “efiling@nashah.com”. We find that the order passed by the CIT(A) does not provide any details of hearing or notices. Further the said impugned order does not contain any discussion on the 3 Assessment Year 2015-2016 contentions raised on behalf of the Assessee in the Statement of Facts and Ground of Appeal
filed before the CIT(A) along with appeal in Form
35. Accordingly, we set aside the order, dated 02/12/2024, passed by the CIT(A). The Learned Authorised Representative for the Assessee has contended that the documents/details furnished by the Assessee during the assessment proceedings were not taken into consideration by the Assessing Officer. On perusal of the Paper Book filed by the Assessee we find that the Assessee had filed reply dated 06/02/2017 to notice dated 19/01/2017 and reply dated 26/12/2017 to notice dated 08/12/2017. However, in the meantime on 22/12/2017, the Assessment Order was passed by the Assessing Officer. Therefore, the reply letter dated 26/12/2017 could not have been taken into consideration by the Assessing Officer. We have already set aside the order dated 02/12/2024 passed by the CIT(A) and therefore, keeping in view overall facts and circumstances of the present case and the interest of justice, we restore the issue raised in Ground No.2, 3 and 4 raised in appeal before the CIT(A) back to the file of the Assessing Officer with the directions to adjudicate the same afresh as per law after granting Assessee a reasonable opportunity of being heard and after taking into consideration the reply/submissions filed by the Assessee. The Assesses directed to file all documents/details in support of its claim/contentions before the Assessing Officer and also to track the assessment proceedings through ITBA Portal. It is clarified that in case the Assessee fails to make submissions and/or fails to enter appearance before the Assessing Officer, the Assessing Officers shall be at liberty to adjudicate the issue on merits on the basis of material available on record. In terms of aforesaid, Ground No. 1 raised by the Assessee is treated as allowed for statistical purposes while all the other grounds raised by the Assessee are dismissed having been rendered 4 Assessment Year 2015-2016 infructuous.
7. In result, the appeal preferred by the Assessee is allowed for statistical purpose.