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Facts
The assessee, University of North Bengal, did not file its income tax return for AY 2015-16. An assessment was reopened under Section 147, and additions were made for cash deposits, interest income, and hotel/restaurant bills, totaling Rs. 3,31,55,301. The assessee's appeal to the CIT(A) challenging these additions and claiming exemption under Section 10(23C)(iiiab) was dismissed due to a 15-day delay in filing, which the CIT(A) did not condone.
Held
The Tribunal found that the reasons for the delay in filing the appeal before the CIT(A) were justified, and the assessee had sufficient cause. It held that the entire deposits, even if the exemption was not allowed, should not have been added without considering income on a commercial basis and allowing expenditure. Therefore, the orders of both the CIT(A) and the AO were set aside, and the matter was remitted back to the AO for a de novo assessment, considering the assessee's submissions including the claim for exemption under Section 10(23C)(iiiab).
Key Issues
Whether the CIT(A) was justified in not condoning a 15-day delay in filing the appeal; validity of reopening assessment under Section 147/144/144B without proper application of mind or sanction; and whether the assessee is entitled to exemption under Section 10(23C)(iiiab) for its income.
Sections Cited
250, 147, 144, 144B, 151A, 148, 151, 10(23C)(iiiab), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2015-16 dated 12.11.2024, which has been passed against the assessment order u/s 147/144/144B of the Act, dated 18.03.2023. I.T.A. No.: 2649/KOL/2024 Assessment Year: 2015-16 University of North Bengal.
The assessee is in appeal before the Bench raising the following grounds of appeal:
“1. For that the Ld. CIT(A) was not justified in not condoning a modest delay in filing appeal of 15 days in spite of reasonable cause shown before him.
(a) For that the Ld. CIT(A) ought to have held re-opening proceedings u/s 147/144 to be invalid and was liable to be quashed. (b) For that the Ld. CIT(A) failed to consider that the Juri ictional A.O. lacked juri iction to issue notice u/s 148 in view of the provisions of section 151A r.w.s. notifications issued there under, thereby vitiating the reassessment order.
For that the Ld. CIT(A) ought to have held that the re-assessment order is vitiated in law inasmuch as there was absolutely no independent application of mind and no independent enquiry on the part of the A.O. in respect of the purported information received by him.
For that the Ld. CIT(A) ought to have held re-opening proceedings to be bad in law due to the fact that the purported sanction u/s 151 was not obtained or was not in accordance with law which vitiated the reopening process.
For that on the facts and in the circumstances of the case, the Ld. CIT(A) ought to have allowed the benefit of exemption u/s 10(23C)(iiiab) of the Act.
For that on the facts and in the circumstances of the case, the Ld. CIT(A) ought to have deleted the addition of Rs. 2,28,84,814/- made by the A.O. on account of cash deposits in the bank account by denying the benefit of exemption u/s 10(23C) (iiiab) of the Income Tax Act.
For that on the facts and in the circumstances of the case, the Ld. CIT(A) ought to have deleted the addition of Rs. 1,01,01,377/- made by the A.O. on account of interest income.
For that on the facts and in the circumstances of the case, the Ld. CIT(A) ought to have deleted the addition of Rs. 1,69,110/- made by the A.O. on account of payment of hotels and restaurant bills.
The appellant craves leave to add further grounds of appeal or alter the grounds at the time of hearing.”
Brief facts of the case are that the assessee had not filed the return of income for AY 2015-16 and the assessee was found to have carried out financial transactions relating to cash deposit in the bank account I.T.A. No.: 2649/KOL/2024 Assessment Year: 2015-16 University of North Bengal. of Rs. 2,28,84,814/-, interest income of Rs. 1,01,01,377/- and payment of hotels and restaurant bills of Rs. 1,69,110/-. As no return of income was filed, therefore, after recording reasons and after complying with the statutory requirements, a notice u/s 148 of the Act was issued on 29.03.2022 requiring the assessee file the return of income. Neither the return of income was filed nor any response was made to the notice issued u/s 142(1) of the Act. Subsequently, the final show cause notice was issued. Thereafter the cash deposits in the bank account, interest income and payment of hotels and restaurant bills were added to the income of the assessee and the assessment was made computing the total income at Rs. 3,31,55,301/- u/s 147/144/144B of the Act.
1 Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) in which the order of the Assessing Officer (hereinafter referred to as Ld. 'AO') was challenged not only on account of legal issues but also on merits of the case claiming that as the assessee was financed by the Government and University Grants Commission, the income of the assessee was fully exempt u/s 10(23C)(iiiab) of the Act. The Ld. CIT(A) has reproduced the order of the Ld. AO as well as the submissions of the assessee uploaded on the portal but has dismissed the appeal on account of delay in filing the appeal as according to the Ld. CIT(A) the assessee had not shown any sufficient cause for the delay in filing of appeal which was delayed by 15 days. It is mentioned at page 34 of the order of the Ld. CIT(A) that the delay occurred as the Counsel of the assessee, Shri Subash Agarwal was unable to attend the office since he was suffering from viral fever and joined the office on or around 28.04.2023 and the appeal was prepared and filed by him on 01.05.2023 with a delay of around 15 days. Since no medical certificate was filed to substantiate the I.T.A. No.: 2649/KOL/2024 Assessment Year: 2015-16 University of North Bengal. contention, the Ld. CIT(A) did not find sufficient cause for the delay and the appeal was dismissed on account of delay.
Aggrieved with the order of the Ld. CIT(A) the assessee has filed the appeal before the Tribunal.
Rival contentions were heard and the submissions made and the paper book filed have been examined. Even though at pages 1 and 2 of the paper book an affidavit in respect of the delay in filing of the appeal before the Ld. CIT(A) has been mentioned to have been enclosed but no such affidavit is found to be enclosed in the paper book which runs from page 3 to 48 and in which the assessee also contends that written submission had been filed before the Ld. CIT(A). However, the reasons for the delay have been reproduced in the order of the Ld. CIT(A).
We have gone through the facts of the case and also considered the paper book filed. The assessee sought adjournment but the same was declined as there was no justification for seeking adjournment and no representation had been made either before the Ld. AO or before the Ld. CIT(A). The assessment order is ex parte and there was no representation before the Ld. CIT(A) and the appeal was dismissed on account of delay. The Ld. AO has added the entire cash deposits in the bank account, the interest income and also the payment to hotel and restaurant bills. No expenditure whatsoever has been allowed while the assessee claims to be a university which is substantially financed by the Government and the University Grants Commission and has claimed that its income is exempt u/s 10(23C)(iiiab) of the Act. Even if the exemption u/s 10(23C)(iiiab) of the Act was not allowed; however, the entire deposits which were claimed to be out of the fee received and grants from the Government could not have been added without I.T.A. No.: 2649/KOL/2024 Assessment Year: 2015-16 University of North Bengal. considering the income on commercial basis and after allowing the expenditure. Thus, the Bench was of the view that in the interest of justice, another opportunity may be granted to the assessee. Therefore, the order of the Ld. CIT(A) as well as the order of the Ld. AO are hereby set aside as the reasons for the delay are found to be justified and the assessee had a sufficient cause for the delay and the submission made have not been considered and the issue is remitted to the file of the Ld. AO for framing the assessment de novo after considering the submissions which may be filed by the assessee in support of the claim and also in support of the claim that the exemption u/s 10(23C)(iiiab) of the Act is allowable. Hence, all the grounds of appeal are allowed for statistical purposes
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 16th June, 2025. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 16.06.2025 Bidhan (P.S.) I.T.A. No.: 2649/KOL/2024 Assessment Year: 2015-16 University of North Bengal. Copy of the order forwarded to:
University of North Bengal, C/o. Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite 213, 2nd Floor, Kolkata, West Bengal, 700069. 2. D.C.I.T., Circle-2, Exemption, Kolkata.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order