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Facts
The assessee, Nadia Primary Teachers Training Institute, faced three additions during assessment, including alleged violations of Section 40(a)(ia), bogus expenses, and expenses on interest income. Its first appeal before the Addl. JCIT(A) was dismissed due to non-attendance and non-persuasion.
Held
The Tribunal noted that the assessee is a charitable society and suffered due to lack of vigilance. Considering the interests of substantive justice, the ITAT set aside the impugned order and remanded the matter back to the Ld. AO/Addl. JCIT(A) for fresh consideration, advising the assessee to be vigilant regarding notices.
Key Issues
The key legal issues concerned the validity of additions and disallowances made by the lower authorities, specifically disallowances under Section 40(a)(ia) and denial of exemption under Section 10(23C)(iiiaad), primarily due to the assessee's non-attendance during lower proceedings.
Sections Cited
250, 40(a)(ia), 10(23C)(iiiaad)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, KOLKATA
order
: 31.10.2025 O R D E R
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
In this case, on the last date of hearing, none attended on behalf of the assessee but it was decided to proceed ahead with the adjudication with the help of Ld. DR. 1.1 This appeal arises from order u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”) dated 26.03.2025, passed by the Ld. Commissioner of Income Tax (Appeals), Additional/Joint Commissioner of Income Tax (Appeals), Prayagraj [hereafter “the Ld. Addl./JCIT(A)”].
1.2 In this case, three additions have been made on account of violation of Section 40(a)(ia) of the Act; allegedly bogus expenses and expenses on interest income. Thereafter the assessee approached the Addl. JCIT(A)
Nadia Primary Teachers Training Institute where he did not attend to any of the notices issued from his office (as mentioned in para 11.1, at page 15 of the impugned order). In light of such non attendance the first appeal has been dismissed largely on account of non-persuasion.
1.3 Further aggrieved, the assessee has filed the present appeal with the following grounds:
“1. For that on the facts the Ld. I.T.O. was not at all justified in determining the assessed income to the tune of Rs. 12,41,140.00 as against the Returned Income of Rs. 25,795.00 for the year under assessment.
For that having regards to the facts of the case the Ld. I.T.O. was not at all justified in adding back the total sum of Rs: 12,15,345.00 under different heads by disallowing expenses incurred by the appellant for imparting education to the primary teachers during the year under appeal.
For that on the facts & in the circumstances of the case the Ld. L.T.O. was not at all justified in disallowing the expenditure incurred for the purpose of excursion of the students u/s 40(a)(ia) of the 1.T. Act by ignoring the explanation/submission given by the appellant in response to the show cause notice at the assessment stage.
4. For that on the facts & in the circumstances of the case the Ld. L.T.O. was not at all justified in disallowing the total expenses of Rs. 8,95,690.00 under the head hostel expenses solely on the basis of the Inspector's report without supplying the copy of the same to the appellant, so that he can rebut the contention of the report which was prayed for at the assessment stage.
For that on the facts & in the circumstances of the case the Ld. 1.T.O. was not at all justified in disallowing the sum of Rs 1,30,022.00 claimed by the appellant as deduction u/s. 10(23c) (iad) of the LT. Act 6. For that having regards to the facts of the case the L.d. I.T.O. ought to have considered that the appellant is a registered society under the Societies Act and filed its return in ITR-7 under the status of AOP (Trusts) as a non-profit earning institution whose entire receipts should be exempted u/s. 10(23c) (iii ad) of the IT. Act, 1961 because the gross receipts 42,26,972.00 was for below of Rs. I Crore and as such blanket deduction should have been given.
That the appellant craves leave to add/alter/delete/amend/substitute any/or grounds/documents at the time of final hearing.”
2. The Ld. DR pointed out that ample opportunity was provided by the lower authorities but the assessee did not avail of the same and hence has suffered the additions made. It was clearly stated that there would be no objection in case, the matter was to be remanded back to the Ld. Addl./JCIT(A).
Nadia Primary Teachers Training Institute 3. We have carefully considered the submissions of Ld. DR and have gone through the records before us. We find that the assessee is a charitable society and has mainly suffered on account of not being vigilant enough at both the stages below. However, considering the totality of facts and circumstances and also in the interests of substantive justice, we deem it fit to set aside the impugned order and remand this matter back to the file of Ld. AO/Addl. JCIT(A), for fresh consideration. The assessee would do well to be vigilant regarding notices sent for hearing and the Ld. First Appellate Authority would be at liberty to call for remand report etc., in case so required.
In result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on 31.10.2025