SHRAMIK SERVA SEVA TRUST,AHMEDNAGAR vs. ITO, EXEMPTION, WARD-1, NASHIK, NASHIK

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ITA 1553/PUN/2025Status: DisposedITAT Pune22 August 2025AY 2013-14Bench: DR.MANISH BORAD (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in dismissing the appeal solely on technical grounds of non-compliance without adjudicating on merits. The matter was restored to the CIT(A) for fresh adjudication.

What were the facts?

The assessee, a trust, received funds from sugarcane companies for distributing to labourers. The CIT(A) added Rs. 12.50 lakh (TDS) as the assessee's income for retaining the amount without proper explanation or compliance with notices.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal for non-compliance without deciding the merits of the addition, and whether the retained TDS could be treated as income of the trust.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 250,Section 194C,Section 198,Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE

Before: DR.MANISH BORAD

For Appellant: Shri Pramod S Shingte
For Respondent: Shri Sanjay Dhivare
Hearing: 13.08.2025Pronounced: 22.08.2025

आदेश / ORDER

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

1.

The captioned appeal at the instance of assessee pertaining to A.Y. 2013-14 is directed against the order dated 16.04.2024 of National Faceless Appeal Centre (NFAC), Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 21.12.2018 passed u/s.143(3) r.w.s147 of the Act.

2.

The sole grievance of the assessee is against the addition of Rs.12.50 lakh which is the tax deducted at source u/s.194C of the Act in the name of the assessee.

3.

At the outset, ld. Counsel for the assessee submitted that the impugned addition is uncalled for because the assessee is a trust which receives the funds from the sugarcane companies and the same is utilised for distributing amongst Shramik Serva Seva Trust the labourer families and other social benefits. He submitted that the alleged sum is tax deducted at source on the gross receipts but that is also meant for being distributed to the labourers and their families. He however failed to controvert the fact that no proper response was given to the show cause notice issued by ld.CIT(A). At this juncture, ld. Counsel for the assessee requested for setting the issues to the file of ld.CIT(A) for necessary adjudication. Ld. DR is fair enough in not opposing this request made by ld. Counsel for the assessee.

4.

I have heard the rival contentions and perused the record placed me. A perusal of the impugned order reveals that ld.CIT(A) merely dismissed the appeal for non-compliance to the notice of hearing on the part of assessee observing as under :

“2. The facts of the case are that assessee Trust is generating receipts from working as middle man between labourer contractor of sugarcane harvesters and sugar cane crushed karkhana. The karkhana making payment to the trust on behalf of labour contractors then the trust distributes the amount to the labour contactors. In lieu of the work as middle man the assessee trust receives payment. The amount received is utilized for the purpose of charity. Documents available on record reveals that amount of TDS which is claimed by the assessee and is neither utilized as per the triparty agreement nor is transferred back to the sugar factory. That means that the amount is retained by the assessee trust. In this period under consideration it is noticed that TDS is at Rs.12,50,000/-. There is no response to the show cause notice issued. Therefore, it is presumed that appellant doesn't have anything to explain in the matter. Since, as per the provisions of section 198 tax deducted is income received the TDS retained by the appellant is treated as income of the appellant.”

5.

Considering the fact that the assessee failed to make proper compliance to the notices of hearing issued by ld.CIT(A), therefore I deem it proper to restore the issue raised on merits to the file of ld.CIT(A) for afresh adjudication and pass a speaking order as contemplated u/s.250(6) of the Act.

Shramik Serva Seva Trust Needless to mention that ld.CIT(A) in the set aside proceedings shall afford reasonable opportunity of hearing to the assessee. Assessee is directed to update latest email id and contact detail on ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is hereby set aside and effective grounds of appeal raised by the appellant are allowed for statistical purposes.

6.

In the result, appeal of the assessee is allowed for statistical purposes.

Order pronounced on this 22nd day of August, 2025.

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