SWAMI SHANTI PRAKASH ASHRAM TRUST,ULHASNAGAR vs. DEPUTY COMMISSIONER OF INCOME TAX, EXEMPTION WARD, EXEMPTION CIRCLE, PUNE

Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A) / NFAC in remanding the matter back to the file of the Assessing Officer without deciding the grounds on merit.

Facts of the case, in brief, are that the assessee is a trust and filed its return of income on 30.09.2015 declaring total income at Nil. The trust is registered u/s 12A(a) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) and derives income from donation, interest, dividend, scrap sale etc. From the various details furnished along with return of income, the Assessing Officer noted that the assessee has incurred expenditure which do not qualify the objects of the trust and there is no evidence on record to establish that the expenditure was actually incurred. He therefore, after recording reasons, reopened the assessment as per provisions of section 147 of the Act and issued notice u/s 148 of the Act on 28.03.2021. The assessee in response to the said notice filed the return of income on 27.04.2021 declaring total income at Nil. Subsequently, notices u/s 143(2) and 142(1) of the Act along with a questionnaire were issued and served on the assessee. The assessee filed two letters on 08.01.2022 and 13.01.2022 demanding the photocopy of the reasons recorded and not a summary of reasons recorded. Thereafter, the assessee also submitted two letters raising the same issue by demanding the photocopy of reasons. The assessee was provided copy of the reasons. In response to the show cause notice issued by the Assessing Officer on 18.03.2022, the assessee made two submissions on 21.03.2022 and 23.03.2022. Further, on 21.03.2022 the assessee again sought physical verification of records. According to the Assessing Officer, the submission made by the assessee cannot be read even after repeated attempts. In view of the above and in absence of any satisfactory reply received from the assessee, he decided the issue on merit. The Assessing Officer noted that the assessee has received income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the trust or institution. He, therefore, accepted the corpus donations from foreign donors of Rs.7,13,65,773/- as allowable. However, he taxed the interest earned from out of such donations which is at Rs.1,70,33,193/-. The Assessing Officer further noted that the assessee has claimed the expenditure towards general donation or other expenditures towards shamshanbhoomi. However, in absence of any documentary evidence submitted before him, the Assessing Officer made addition of Rs.43,44,013/-. He accordingly determined the total income of the assessee at Rs.2,13,77,206/-.

In appeal the Ld. CIT(A) / NFAC restored the issue to the file of the Assessing Officer by invoking jurisdiction u/s 251(1)(a) of the Act on the ground that the assessment order was passed u/s 144 of the Act. Therefore, in view of the amendment made in section 251(1)(a) is applicable and the Ld. CIT(A) / NFAC has the power to remand the matter back to the file of the Assessing Officer.

Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.

The Ld. Counsel for the assessee at the outset submitted that it is not a case of ex-parte assessment since the assessee has filed various details before the Assessing Officer. The Ld. Counsel for the assessee filed the details of submissions made before the Assessing Officer on various dates to substantiate that the assessee has filed its response before the Assessing Officer. Therefore, the Ld. CIT(A) / NFAC instead of deciding the appeal on merit should not have restored the matter back to the file of the Assessing Officer.

The Ld. DR on the other hand supported the order of the Ld. CIT(A) / NFAC. He, however, conceded that the Assessing Officer has not passed the order u/s 144 of the Act.

We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. It is an admitted fact that the Assessing Officer in the instant case has passed the order u/s 147 r.w.s. 144B of the Act on 26.03.2022. A perusal of the record shows that the assessee has filed various details before the Assessing Officer and therefore, it is not a case of ex-parte assessment. Under these circumstances, we find merit in the arguments of the Ld. Counsel for the assessee that the Ld. CIT(A) / NFAC was not justified in setting aside the matter to the file of the Assessing Officer without adjudicating the issue on merit. We, therefore, deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to adjudicate the issue afresh on the basis of grounds raised before him and the arguments advanced by the assessee. He shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

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