PANINEEYA SANSKRIT COLLEGE TRUST,HYDERABAD vs. INCOME TAX OFFICER (EXEMPTIONS)-3, HYDERABAD

PDF · subscribers
ITA 1385/HYD/2024Status: DisposedITAT Hyderabad04 March 2025AY 2014-154 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of 209 days in filing the appeal in the interest of justice. The Tribunal found that the Ld. CIT(A) issued a notice on 22.02.2021 and passed the order on 03.05.2024 without providing any further opportunity to the assessee. This long gap without adequate opportunity to be heard violates the principle of natural justice. It is a settled legal position that an assessee must be given a reasonable opportunity to present their case before an adverse order is passed. Therefore, the Tribunal set aside the impugned order of the Ld. CIT(A) and remanded the matter back for fresh adjudication. The Ld. CIT(A) was directed to grant the assessee a reasonable opportunity to present their case and furnish necessary documentary evidence. The assessee was also directed to ensure compliance by filing documents on the date fixed by the Ld. CIT(A) without seeking adjournments. The issue regarding Section 13(1)(c) and Section 11 exemption was not decided on merits as the matter was remanded.

What were the facts?

M/s. Panineeya Sanskrit College Trust (the assessee) filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging an order passed by the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2014-15. The assessee's appeal before the CIT(A) was against an order passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961. The assessee contended that the CIT(A) dismissed their appeal ex-parte after issuing only one notice dated 22.02.2021, without providing sufficient opportunity to present their case. The assessee also raised grounds regarding the applicability of Section 13(1)(c) and the rejection of exemption under Section 11 of the Act, with a tax effect of Rs. 10,09,469/-. The appeal before the ITAT was filed with a delay of 209 days, for which the assessee filed a condonation petition.

What were the issues?

1. Whether the order of the Ld. CIT(A) is erroneous and unsustainable in law, and passed in violation of principles of natural justice (mixed question of fact and law)? 2. Whether the Ld. CIT(A) erred in dismissing the appeal based on a hearing notice dated 22.02.2021, without providing further opportunity to the Appellant to present their case (mixed question of fact and law)? 3. Whether the Ld. CIT(A) erred in confirming the AO's action holding that provisions of Section 13(1)(c) of the Act are applicable, when amounts were paid for the purpose of the Trust and not for personal benefit of trustees (question of law)? 4. Whether the Ld. CIT(A) erred in confirming the AO's action in rejecting the claim of exemption under Section 11 of the Act, thereby confirming a taxable income of Rs. 32,66,890/- (question of law)? Assessee's Contentions: - The Ld. CIT(A) dismissed the appeal ex-parte after issuing only one notice dated 22.02.2021, without granting further opportunity, violating principles of natural justice. - Sufficient opportunity was not provided, preventing the assessee from prosecuting the appeal on merits. - There was no intention to avoid compliance or derive benefit from not making submissions. - The amounts were paid for the purpose of the Trust, not for personal benefit of trustees, thus Section 13(1)(c) is not applicable. - The assessee is entitled to exemption under Section 11 as there was no violation of any provisions. - Prayed for one more opportunity to present the case on merits with documentary evidence. Revenue's Contentions: - The Ld. DR opposed the granting of any further opportunity to the assessee.

Which sections of the Income-tax Act were involved?

Section 13(1)(c),Section 11,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderebad A’ Bench, Hyderabad

Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA

(निर्धारण वर्ा/Assessment Year:2014-15) M/s. Panineeya Sanskrit College Income Tax Officer Vs. Trust, Hyderabad. (Exemptions)-3, PAN: AABTP5178R Hyderabad. (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri P. Vinod, Advocate रधजस् व द्वधरध/Revenue by: Ms. Vishnu Priya, SR-DR सुिवधई की तधरीख/Date of hearing: 04/03/2025 घोर्णध की तधरीख/Pronouncement: 04/03/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by M/s. Panineeya Sanskrit College Trust (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 03.05.2024 for the A.Y. 2014-15.

2.

The assessee has raised the following grounds :

3.

First of all, it is seen that there is a delay of 209 days in filing of the appeal before us for which the assessee has filed a condonation petition along with an affidavit explaining the reasons for delay. After hearing the Learned Department Representative (“Ld. DR”) and considering the reasons given by the assessee and in the interest of justice, we condone the delay of 209 days in filing the appeal before the ITAT. Accordingly, we admit the appeal for adjudication on merits.

4.

The Learned Authorised Representative (“Ld. AR”) submitted that the assessee had filed appeal before the Ld. CIT(A) against the order passed by Learned Assessing Officer (“Ld. AO”)for A.Y. 2014-15 u/s.143(3) of the Income Tax Act, 1961 (“the Act”) on 29.12.2016. The Ld. AR further submitted that, the Ld. CIT(A) issued a single notice dated 22.02.2021 and without granting any further opportunity, dismissed the appeal of the assessee exparte. The Ld. AR contended that, sufficient opportunity was not provided to the assessee to present their case before the Ld. CIT(A) and as a result, the assessee could not prosecute the appeal on merits. He also submitted that the assessee had no intention of avoiding compliance and could not derive any benefit by not making submission before the Ld. CIT(A). The Ld. AR, therefore, prayed before the bench for providing one more opportunity to the assessee so that the case can be properly prosecuted on merits by providing necessary documentary evidences before the Ld. CIT(A).

5.

Per contra, the Ld. DR opposed the granting of any further opportunity to the assessee.

6.

We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. It is observed that the Ld. CIT(A) issued first notice on 22.02.2021 and passed the order on 03.05.2024, without providing any further opportunity to the assessee. Such a long gap between the issuance of notice and the passing of order, without giving the assessee an adequate opportunity to be heard, violate the principle of natural justice. It is a settled position of law that the assessee should be given a reasonable opportunity to present their case before any adverse order is passed. Considering the facts and circumstances of the case and in the interest of justice, we set aside the impugned order of Ld. CIT(A) and remand the matter back to the file of Ld. CIT(A) for fresh adjudication. The Ld. CIT(A) is directed to grant the assessee a reasonable opportunity to present their case and furnish the necessary documentary evidences in support of their claim. The assessee is also directed to ensure compliance by filing the necessary evidences /

More judgments on Section 13(1)(c)

All 697 judgments and leading authorities on Section 13(1)(c) →

Recent GST High Court judgments

Search GST case law →