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Facts
The assessee, a charitable trust running educational schools, appealed against ex-parte orders from the AO and CIT(A) for AY 2018-19. The orders included additions for anonymous donations (Rs. 67.21 lakhs) and disallowance u/s 40(a)(ia) (Rs. 4.78 lakhs). The non-compliance was attributed to miscommunication and a change of secretary, and the assessee sought another opportunity.
Held
The Tribunal acknowledged the assessee's non-compliance but, in the interest of natural justice, set aside the orders of the lower authorities and remanded the matter back to the AO for fresh adjudication de novo, with an opportunity for the assessee to be heard and produce evidences. This remission is conditional on the assessee paying a cost of Rs. 5000/- to the Tamil Nadu State Legal Services Authority.
Key Issues
Whether ex-parte assessment orders involving additions for anonymous donations and disallowance under Section 40(a)(ia) should be set aside and remanded to the AO when the assessee claims non-compliance due to miscommunication and seeks another opportunity in the interest of natural justice.
Sections Cited
40(a)(ia)
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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T VARKEY & SHRI AMITABH SHUKLA
Assessment Years: 2018-19 Thenkumari Educational Society Assessing Officer, Sivanthi Adithanar College Campus, Exemptions Ward Monikettipottal Post, Main Road Tirunelveli. Pillayarpuram, Kanyakumari Dist, Tamil Nadu-629501. [PAN: AAATT6085G] (प्रत्यर्थी/Respondent) (अपीलार्थी/Appellant) अपीलार्थी की ओर से/ Assessee by : Shri P.M.Kathir, Advocate प्रत्यर्थी की ओर से /Revenue by : Shri N.Rajakumar, Addl.CIT सुनवाई की तारीख/Date of Hearing : 13.05.2025 घोषणा की तारीख /Date of Pronouncement : 16.05.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M :
This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA / NFAC / S / 250 / 202425 / 1071402589(1) dated 20.12.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment years 2018-19. 2.0 At the outset, the Ld.Counsel for the assessee submitted that both the lower authorities being the Ld.AO and Ld.CIT(A) have passed ex-parte orders against the assessee being the charitable trust running educational schools. It was submitted that additions have been made holding donations of Rs.67,21,100/- as anonymous donations as well as a disallowance of expenses of Rs.4,78,755/- u/s 40(a)(ia). It was stated that non-compliance to statutory notices was on account of miscommunication between the previous auditor and the secretary of the trust. It was also stated that there was a change of incumbent qua secretary of the trust. It was accordingly requested that one last opportunity may be accorded to represents its case before the lower authority. The Ld. Counsel of the assessee gave a personal assurance of compliance being made hereafter. 3.0 Per contra, the Ld.DR placed reliance upon the order of lower authorities. The Ld. DR requested for imposition of cost upon the assessee for wasting the precious judicial time. 4.0 We have heard rival submissions in the light of material available on records. The non-compliance of the assessee before the lower authorities is evident from their orders. We have considered the pleadings for the impugned non-compliance of the assessee before the lower authorities. We have noted that no litigant gains by non- prosecution by its case. We noted that the assesse was provided opportunities by both the lower authorities but assesse did not avail the opportunities. However, in the interest of natural justice, we are of the view that to do substantial justice one more opportunity be provided to the Page - 2 - of 4 assesse to present the true and clear facts before the AO and hence, we hereby set aside the orders of the lower authorities i.e., the AO and the CIT(A) and remand the matter back to the file of the AO. The decision to remit it back to the Ld. AO is taken in view of the fact that an Assessing Officer is the fulcrum of assessment proceedings. He possess the first right and responsibilities to examine facts of a case before arriving at his decision qua determination of taxable income in a particular case. We have noted with respectful deference the decision of Hon’ble Apex Court in the case of TIN box 249 ITR 216 on the subject matter. Accordingly, the matter stands remitted back to the Ld. AO for fresh adjudication de novo while giving an opportunity of being heard and by passing a speaking order. Any non-compliance on the part of the assesse can be adversely viewed. The assessee is at liberty to produce all the evidences filed through its paper book before us including any other evidences deemed relevant in support of its claims before the Ld. AO during the readjudication proceedings. The said remission is however subject to the assesse paying a cost of Rs.5000/- to be paid to the Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within one month of the date of the receipt of this order. The assesse will pay this cost and produce the receipt before the AO. Accordingly, all the grounds of appeal raised by the assessee are allowed for statistical purposes. Page - 3 - of 4. Order pronounced on 16th , May -2025 at Chennai. Sd/- Sd/- (एबी टी. वर्की) (अधमताभ शुक्ला) (ABY T VARKEY) (AMITABH SHUKLA) न्याधयक सदस्य / Judicial Member लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदनांक/Dated: 16th , May -2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Madurai 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF
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