JERMEL'S ACCADEMY,SILIGURI vs. ITO, WARD - 1(4), SILIGURI, SILIGURI

Facts

The assessee, a Trust operating a co-educational school, made substantial cash deposits during the demonetization period, leading to the reopening of assessment under Sections 147 and 148. The Assessing Officer and subsequently the CIT(A) disallowed the assessee's claim for exemption under Sections 11(1) and 12/10(23C) on the grounds of lack of proper registration (Section 12A/12AA), non-filing of ITRs and audit reports, treating the income as business income and adding the cash deposits as unexplained money under Section 69A. The CIT(A) dismissed the appeals ex-parte due to alleged non-compliance by the assessee.

Held

The Tribunal condoned a 217-day delay in filing the appeal for AY 2017-18, finding sufficient cause. It held that the CIT(A) erred by passing ex-parte orders without providing a reasoned decision, violating Section 250(6) of the Act and established legal precedents. The Tribunal emphasized the CIT(A)'s duty to dispose of appeals on merits with a speaking order, even in cases of alleged non-compliance. Therefore, the orders of the CIT(A) for all three assessment years (2014-15, 2015-16, 2017-18) were set aside and the matters were remitted back to the CIT(A) for de novo adjudication with a fresh opportunity for the assessee to present evidence.

Key Issues

1. Whether the CIT(A) was justified in passing ex-parte orders without a reasoned decision as required by Section 250(6). 2. Whether the assessee was eligible for exemption under Sections 11, 12, or 10(23C) given lack of registration and non-filing of ITRs. 3. Whether cash deposits during demonetization could be treated as unexplained money under Section 69A. 4. Validity of assessment reopening proceedings, including 'reason to believe' and sanction under Section 151. 5. Condonation of delay in filing appeal for AY 2017-18.