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Facts
The assessee, a registered trust/society, filed its income tax return showing gross receipts and expenses. The CPC processed the return by treating gross receipts as income and disallowing expenses. The assessee's subsequent rectification applications were rejected for technical reasons, leading to a significant delay in filing the first appeal before the CIT(A).
Held
The Tribunal held that the assessee was prevented by reasonable and sufficient cause in not filing the appeal within the prescribed time limit. The order of the CIT(A) was set aside, and the matter was remanded.
Key Issues
Whether the delay in filing the first appeal before the CIT(A) was sufficiently excused and if the disallowance of expenses by the CPC was justified.
Sections Cited
143(1), 154, 119(2)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
Assessment Year : 2013-14 Shri Sainath Sevabhavi Vs. ITO, Exemption Ward, Sanstha, Nanded. Akharwai, Harangul Bk, Latur, Harangai Bk, B.O., Latur- 413531. PAN : AAKTS9324H Appellant Respondent Assessee by : Shri Sarang Gudhate Revenue by : Shri Akhilesh Srivastva Date of hearing : 30.07.2025 Date of pronouncement : 22.08.2025 आदेश / ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 30.04.2025 passed by Ld. Addl./JCIT(A)-7, Delhi [‘Ld. CIT(A)’] for the assessment year 2013-14.
The appellant has raised the following grounds of appeal :- “(Without prejudice to each other)
1. Under the facts and circumstances of the case and in law, the Ld. CIT(A)/NFAC has erred in not condoning the delay in filing of Appeal.
2. Under the facts and circumstances of the case and in law, Ld CIT(A)/NFAC has erred in denying the expenditure incurred and treating the Gross Receipts as Income in Intimation u/s 143(1).
3. Under the facts and circumstances of the case and in law, the Ld CIT(A)/NFAC has not justified in making disallowance of expenditure in the intimation U/s 143(1) as the scope of intimation is limited. 4. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal if deemed necessary at the time of hearing of the appeal.”
3. Facts of the case, in brief, are that the assessee is registered under the Bombay Public Trust Act, 1950 and also registered under the Societies Registration Act, 1860. The income tax return was submitted on 17.10.2014 wherein gross receipt of Rs.75,08,741/- and expenses of Rs.73,17,696/- were shown resulting in net surplus of Rs.1,91,045/-. CPC processed the return on 14.03.2015 determining gross total income of Rs.75,08,740/- treating gross receipt as income and rejecting the claim of expenses of Rs.73,17,696/-. Against the above intimation, the assessee filed rectification application u/s 154 of the IT Act before ITO, Exemption, Nanded vide application dated 22.12.2017 stating that the assessee inadvertently filed the return in Form No.7 whereas he was required to file return in Form No.5 & therefore requested to accept the return filed by the assessee. Subsequently, assessee vide letter dated 22.08.2018 requested for transfer of PAN from Nanded to Latur. Thereafter, again on 27.01.2020 assessee filed application for rectification physically before ITO, Latur.
4. Vide letter dated 08.10.2020, ITO, Latur informed the assessee that his application u/s 154 dated 27.01.2020 was allowed and resulted in refund of Rs.4,58,640/-, however when the same was submitted for the approval of the Addl.CIT, Nanded on 13.05.2020, the Addl.CIT, Nanded vide letter dated 17.07.2020 rejected the refund approval and directed to file the application u/s 119(2)(b) of the IT Act for condoning the delay in filing of another return in appropriate form. The assessee then filed application for condonation of delay u/s 119(2)(b) of the IT Act before PCIT, Nashik, who vide order dated 05.01.2022 rejected the application u/s 119(2)(b) of the IT Act. Therefore, the assessee belatedly furnished first appeal against the intimation u/s 143(1) order dated 14.03.2015 before Ld. CIT(A). Ld. CIT(A) without condoning the delay of 2489 days dismissed the appeal filed by the assessee without admitting the same for adjudication.
It is this order against which the assessee is in appeal before this Tribunal.
Ld. AR appearing from side of the assessee submitted before us that the order passed by Ld. CIT(A) is unjustified. Ld. AR further submitted that there was sufficient cause which prevented the assessee to file appeal within prescribed time limit. In this Ld. AR submitted that the application for rectification u/s 154 of the IT Act was allowed by ITO, Latur and was sent for approval of refund before Addl.CIT who rejected the same by saying that the assessee should file application for condonation u/s 119(2)(b) of the IT Act for filing return of income in correct form, and when the application u/s 119(2)(b) of the IT Act was rejected then the assessee chose to file first appeal before Ld. CIT(A) which resulted in a delay of 2489 days. Accordingly, Ld. AR requested before the Bench to set-aside the order passed by Ld. CITA) and further requested to delete the addition made by CPC and accept the income returned by the assessee in the light of the fact that ITO, Latur has already accepted his 154 application & calculated refund in his case although the same was not approved on the ground of technicality by Addl.CIT.
Ld. DR appearing from side of the Revenue relied on the orders passed by the subordinate authorities and requested to confirm the same.
We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book and written submission furnished by the assessee. In this regard, we find that admittedly the return was not furnished in correct form & CPC without allowing deduction of expenses incurred & claimed by the assessee. However, at the same time, we also find that the assessee filed application dated 22-12-2017 for rectification u/s 154 of the IT Act & his subsequent manual application dated 27-01-2020 u/s 154 for rectification was considered by ITO, Latur & refund of Rs.4,58,640/- was sent for approval before Addl. CIT, Nanded, who rejected the same for technical reasons. All these facts are verifiable from the record produced before us in the paper-book furnished by the assessee & are also not disputed by the Ld. DR.
Considering the totality of the facts of the case, we find force in the above arguments of Ld. Counsel of the assessee that he was prevented by reasonable & sufficient cause in not filing the appeal before Ld. CIT(A) within the prescribed time limit & accordingly, we deem it appropriate to set-aside the order passed by Ld. CIT(A) & remand the matter back to the file of Jurisdictional Assessing Officer to determine the correct income of the assessee and issue refund, if any, after verifying the claim of the assessee with regard to deductions of expenditure incurred by the assessee. Needless to mention here, the Assessing Officer shall decide the issue after providing reasonable opportunity of hearing to the assessee. The