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Facts
The assessee, Muslim Educational Society (a trust engaged in education), challenged an addition of Rs.1,02,48,544/- made by the Ld. AO for deposits in its bank account, purported to be fee collection. Both the Assessing Officer and the CIT(A) had passed ex-parte orders without providing the assessee a sufficient opportunity of being heard.
Held
The Tribunal noted that while the assessee showed inadequate submission of details, the AO's order was not a speaking order and lacked clear facts or enquiries. To ensure justice, the matter was restored to the Ld. AO for de novo re-adjudication, directing the AO to pass a speaking order after giving the assessee one last opportunity to present its case and comply with notices.
Key Issues
Whether the ex-parte assessment order making an addition for bank deposits (fee collection) was valid given the lack of a speaking order and insufficient opportunity for the assessee, and if the matter should be remanded for re-adjudication.
Sections Cited
250
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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI AMITABH SHUKLA
Muslim Educational Society, Income Tax Officer, Jalal Building Thiruvithancode, Vs. Exemption Ward, Kanyakumari, Tirunelveli. Tamil Nadu-629174. [PAN: AACTM7128D] (अपीलधर्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलधर्थी की ओर से/ Assessee by : Shri T.Vasudevan, Advocate प्रत्यर्थी की ओर से /Revenue by : Shri Eswaran, JCIT : 22.01.2025 सुिवधई की तधरीख/Date of Hearing घोर्णध की तधरीख /Date of : 05.02.2025 Pronouncement आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed against the order bearing DIN & Order No.ITBA/NFAC/S/250/2024-25/1069689973(1) dated 15.10.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment years 2015-16. Through the aforesaid appeal the assesse has challenged order u/s 250 dated 15.10.2024 passed by NFAC, Delhi.
Page - 1 - of 4 2.0 At the outset, the Ld. Counsel for the assessee submitted that both the lower authorities the Ld.AO as well as Ld.CIT(A) has passed ex-parte orders in case of the assessee trust engaged in the activity of providing education. It was submitted that the only issue under consideration is an addition of Rs.1,02,48,544/- on account of deposits in assessee’s bank account qua fees collection made by the Ld.AO. The Ld. Counsel for the assessee submitted that the Ld.First Appellate Authority has also confirmed the addition by passing an ex-parte order without giving sufficient opportunity of being heard. It was accordingly pleaded that in the interest of justice the matter may be restored back to the file of Ld.AO for readjudication. The Ld. DR would like to make us believe on the correctness of the order of lower authorities.
3.0 We have heard rival submissions in the light of material available on records. As per facts recorded by the Ld. AO in his order, he had given opportunities to the assessee for filing the required details which were not satisfactorily filed by the assessee leading to his making the impugned addition. We have however noted that the order passed by the Ld. AO is not a speaking order and clear facts have not been brought on records before making the impugned addition. There are also indications of no Page - 2 - of 4 enquiries conducted by the Ld.AO. Before the Ld.First Appellate Authority also the conduct of the assessee was far from satisfactory as far as compliance to statutory notices are concerned leading to dismissal of the appeal for want of adequate persecution by the assessee.
3.1 We have thus noted that inadequate submission of details and evidences, before the lower authorities qua sources of deposits in assessee’s bank account lies at the core of the controversy. We are therefore of the view that ends of justice would be met if the assessee is given one last opportunity to present its case and file all supporting evidences before the Ld.AO. The assessing officer is the primary authority under the income tax act to be examine facts of a case in the light of available evidences before determining correct taxable income of a tax payer. We therefore set aside the order of lower authorities on this issue and we direct the Ld. AO to readjudicate the matter de novo by examining the matter afresh in accordance with law and by passing a speaking order. Reliance in this regard is placed upon the decision of Hon’ble Apex Court in the case of TIN box 249 ITR 216. The Ld. AO shall give opportunities of being heard to the assesse and it shall be bounden upon the assesse to comply with the notices issued by the Ld. AO. Any non-compliance on the Page - 3 - of 4 part of the assesse can be adversely viewed. Accordingly, all the grounds of appeal raised by the assesse on this issue are allowed for statistical purposes. 4.0 In the result, the appeal of the assesse is allowed for statistical purposes Order pronounced on 5th , February-2025 at Chennai.
Sd/- Sd/- (जॉजज जॉजज के) (श्री अनितधभ शुक्लध) (AMITABH SHUKLA) (GEORGE GEORGE K) लेखध सदस्य /Accountant Member उपधध्यक्ष / Vice President चेन्नई/Chennai, नदिधंक/Dated: 5th , February-2025. KB/- आदेश की प्रनतनलनप अग्रेनर्त/Copy to: 1. अपीलधर्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Madurai 4. नवभधगीय प्रनतनिनर्/DR 5. गधर्ा फधईल/GF
Page - 4 - of 4