RASIPURAM VIVEKANANDA EDUCATIONAL TRUST,NAMAKKAL vs. ITO, EXEMPTION WARD,, SALEM

At the outset, the Ld.AR of the assessee brought to our notice that there is a delay of ‘48’ days in filing of the appeals and filed application for condonation of delay along with the affidavit. A perusal of the contents of it, we are convinced that there was sufficient cause for condonation of delay and therefore, we condone the delay and proceed to hear the appeals on its merits.

The Ld.AR for the assessee brought to our notice that the common issue involved in both the appeals is disallowance of exemption claimed u/s.11 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘)

to the extent of Rs.22,00,000/- for AY 2019-20 and Rs.28,28,783/- for AY 2021-22. Since both the issues are similar/identical, therefore, the appeal for AY 2019-20 is taken as the lead case and the result of which will be followed for AY 2021-22.

The assessee trust is registered u/s.12A of the Act and the return of income (RoI) for AY 2019-20 was processed by the CPC u/s.143(1) of the Act dated 18.05.2020 computing the total income at Rs.22 lakhs which was challenged before the Ld.CIT(A) who has disposed of the appeals by passing the impugned order by which he has directed the AO to assess the net income of the assessee-Trust after verifying the quantum expenditure claimed by the assessee which issue according to the Ld.AR & 1071/Chny/2025 (AYs 2019-20 & 2021-22) Rasipuram Vivekananda Educational Trust was not before the First Appellate Authority and to demonstrate that he drew our attention to the chart which is reproduced as under:

Income to be Assessed Assessment Income Assessed as per Gross receipts Income as per Year Returned the order of 143(1) CIT(A) 2019-20 NIL Rs.6,57,69,115/- Rs.22,00,000/- Rs.1,42,20,740/- 2021-22 Rs.3,25,440/- Rs.3,14,36,423/- Rs.28,28,783/- Rs.91,96,797/-

According to the Ld.AR, from the aforesaid chart it is discernable that for AY 2019-20 the action of the Ld.CIT(A) would tantamount to enhancement of income from Rs.22 lakhs to Rs.1,42,20,740/- and likewise for AY 2021-22, it would enhance from Rs.28,28,783/- to Rs.91,96,797/-. In such a scenario, according to Ld AR, if the Ld.CIT(A) desired to enhance the income of the assessee, the Ld. appellate authority should have followed the procedure laid down in section 251 of the Act i.e. by giving an opportunity to the assessee before making such enhancement which procedure was not followed in this case by the first appellate authority. Therefore, according to the Ld.AR, action of the Ld.CIT(A) is bad in law. On this submission of assessee, the Ld.DR couldn’t rebut the same. In such a scenario, we are of the view that there is per-se violation of principles of natural justice as well as violation of statutory provisions i.e. sec.251 of the Act, wherein there is a clear mandate given to the Ld.CIT(A) to give notice of enhancement and only after giving opportunity to the assessee, the Ld.CIT(A) could have given & 1071/Chny/2025 (AYs 2019-20 & 2021-22) Rasipuram Vivekananda Educational Trust any direction for enhancement. And since, the impugned directions given by the Ld.CIT(A) tantamounts to enhancement, we are of the view that Ld CIT(A) ought to have followed the procedure prescribed in section 251 of the Act, failure of it amounts to arbitrary action and therefore, we are inclined to set aside both the impugned orders and restore the appeals back to the file of the Ld.CIT(A) to decide the grounds of appeal raised by the assessee in accordance to law after hearing the assessee. The assessee is directed to file all relevant documents/written submissions required for adjudication with respect to both the appeals.

In the result, appeals filed by the assessee are allowed for statistical purposes.