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Facts
The assessee, a religious trust, failed to file its return of income and respond to notices regarding cash deposits during demonetisation, leading to a best judgment assessment under Section 144 of the Act. The assessee then appealed to the CIT(A) but faced a significant delay of 781 days.
Held
The Tribunal condoned the delay of 781 days in filing the appeal before the CIT(A) and set aside the order of the CIT(A). The matter was remitted to the AO for fresh consideration, subject to the assessee depositing Rs. 10,000/- as cost.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was justifiable and whether the assessee, a religious trust, is liable to tax.
Sections Cited
142(1), 69A, 10(23bba), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the Ld.Addl/JCIT(A)-13, Mumbai dated 31/12/2024 in respect of the A.Y. 2017- 18.
The brief facts of the case are that the assessee had not filed their return of income within the due date. Based on the information about the cash deposits made during the demonetisation period, notice u/s. 142(1) was issued. The assessee had not responded to the said notice. Thereafter, the AO obtained information from the bank and found that the assessee had deposited a total amount of Rs. 26,64,734/- during the year. Then another 11/09/2019 and finally a show cause notice was issued on 20/09/2019. The assessee had not responded to any of the notices and therefore the entire cash deposits made during the year has been treated as unexplained investment u/s. 69A of the Act. As against the said order, the assessee filed an appeal before the Ld.CIT(A) with a delay of 781 days. The assessee filed an application to condone the said delay. The Ld.CIT(A) had not accepted the reasons as sufficient cause to condone the delay and dismissed the condonation application as well as the appeal.
As against the said order, the assessee is in appeal before this Tribunal.
At the time of hearing, the Ld.AR submitted that the assessee had given the sufficient cause for not filing the appeal in time and the Ld.CIT(A) without considering the said reasons had rejected the delay condonation application which is not correct. The Ld.AR further submitted that the trustees of the trust are not having enough knowledge in the income tax proceedings and also because of the change in the representative, the notices issued by the AO was not received by the assessee and therefore the assessee was not able to appear before the AO as well as not able to file the appeal in time. The Ld.AR further submitted that the assessee is a religious trust formed by the Karnataka State Board of Waqf and therefore their income are not liable to tax under the provisions of the Income Tax Act. The Ld.AR therefore prayed one opportunity to appear before the AO and produce the relevant documents before him and claim the benefit granted under the provisions of the Act. The Ld.AR also filed a paper book.
The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.
We have heard the arguments of both sides and perused the materials available on record.
7. We have considered the reasons stated by the assessee in the delay condonation application filed before the Ld.CIT(A). In the said application, it was submitted that the trust members are not literate to know about the proceedings under the Income Tax Act and the email ID given in the return of income all relates to the earlier accountant who has left the services of the assessee and therefore all the notices and the order communicated by the AO was not known to the assessee and therefore they are not able to appear before the AO and also not able to file the appeal in time before the Ld.CIT(A). We have also considered the fact that the assessee is a religious trust formed by the Karnataka State Board of Waqf and therefore the assessee had claimed exemption u/s. 10(23bba) of the Act. The said claim was not put before the AO along with the records and therefore the AO having no other way had confirmed the assessment u/s. 144 of the Act.
Considering the fact that the assessment order is a best judgment assessment, we are inclined to grant one more opportunity to the assessee to appear before the AO by condoning the said delay of 781 days in filing the appeal before the Ld.CIT(A). We, therefore set aside the order of the Ld.CIT(A) by condoning the said delay and remit this issue to the file of the AO for considering the issue afresh. We grant this concession to the assessee on condition that the assessee should deposit a sum of Rs. 10,000/- towards cost to the income tax department, before the AO commenced the assessment proceedings pursuant to this remand order.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 09th October, 2025.