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Facts
The assessee trust filed its return of income for AY 2016-17 declaring Nil income. The case was selected under CASS due to late filing of Form 10 and large accumulated funds. The AO made additions on account of late filing of Form 10 and deemed application. The CIT(A) dismissed the appeal for non-prosecution.
Held
The Tribunal held that the CIT(A) had dismissed the appeal without properly considering the merits of the case and in violation of Section 250(6) of the Act. The Tribunal condoned the delay in filing the appeal by the assessee.
Key Issues
Whether the CIT(A) erred in dismissing the appeal for non-prosecution without adjudicating on merits, and whether the AO's additions were justified?
Sections Cited
11(2), 143(3), 250, 11(1)(d), 143(2), 142(1), 11(1)
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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
Assessee by : Shri Sachin P Kumar – Advocate Department by : Shri Ramnath P Murkunde Date of hearing : 10-12-2024 Date of 28-02-2025 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 15.03.2024 of the Ld. Commissioner of Income Tax(Appeals)/NFAC, [“CIT(A)”] pertaining to Assessment Year (“AY) 2016-17
The assessee has filed this appeal with a delay of 17 days. The assessee has filed a sworn affidavit stating therein the reasons for delay in filing of the appeal. On perusal of the same, we are satisfied that the delay in filing of appeal is not intentional or deliberate but has occurred for the reasons mentioned in the affidavit. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore, condone the delay and proceed to decide the appeal.
The assessee has raised the following grounds of appeal :- “1. That, on facts and in the circumstances of the case, the order of CIT(A), NFAC in dismissing the appeal filed by the appellant is arbitrary, erroneous, contrary to law and is opposed to the principles of natural justice, equity & fair play
2. That, on facts and in the circumstances of the case, the Ld. CIT(A) has passed the order u/s 250 without giving sufficient opportunity of being heard and thus violating the principles of 'audi alteram partem’.
3. That, on facts and in the circumstances of the case, the Ld. CIT(A) has erred in confirming the income assessed by the Ld. Assessing Officer to the tune of Rs. 2 1,05,59,284/- as against the NIL return of income for FY 2015-16 pertaining to AY 2016-17.
4. That, on facts and in the circumstances of the case, the Ld. CIT(A) has erred in confirming the impugned addition of Rs. 1,10,00,000/- which was made to the income of the appellant trust by the Ld. AO on account of Late online filling of FORM No. 10 as per the requirements of accumulation Deduction claim u/s 11(2) of the IT Act, 1961.
5. That, on facts and in the circumstances of the case, the Ld. CIT(A) has erred in confirming the impugned addition of Rs. 60,21,528/- which was made by the Ld. AO to the income of the appellant trust by rejecting the appellant's claim on account of deemed application.
6. That, on the facts and in the circumstance of the case, the Ld. CIT(A) has passed the order u/s 250 without bringing any cogent mateial on record which is bad in law.
7. That, on facts and in the circumstances of the case, the Ld. CIT(A) has passed the order u/s 250 in a mechanical way, without application of mind and without appreciating the overall facts of the case.
8. The appellant may kindly be allowed to add, alter or modify any other modify any other points to the grounds of appeal at any time before or at the time of hearing
9. Any other order in the interest of justice may kindly be passed.”
4. Briefly stated, the facts of the case are that the assessee trust filed its return of income for the AY 2016-17 on 09.05.2017 declaring total income at Rs. Nil. The case of the assessee was selected under CASS for the reason “Form 10 filed after due date and large amount accumulated or set apart under section 11(2) of the Income Tax Act, 1961 (the “Act”) and registration under section 12A/12AA and large gross income”. Accordingly, statutory notice(s) under section 143(2)/142(1) along with questionnaire were issued and duly served upon the assessee, in response to which assessee filed its submission through e-portal and paper submission which was examined and placed on record by the Ld. Assessing Officer (“AO”). On perusal of the Income & Expenditure Account and the Balance Sheet of the assessee trust, the Ld. AO found that the assessee has gross receipts of Rs. 3,90,36,660/- during the relevant AY. It has shown corpus donation of Rs. 2,25,87,558/- claiming deduction under section 11(1)(d) and deduction of Rs. 1,05,27,050/- under section 11(2) of the Act. But the assessee has not furnished Form 10 as mandated under the provisions of section 11(2) of the Act. The assessee was therefore requested to clarify the above issues. After considering the submissions / contentions raised by the assessee, the Ld. AO completed the assessment under section 143(3) of the Act vide his order dated 29.11.2018 by making the following additions/ disallowances- (i) Rs. 1,10,00,000/- on account of late filing of Form No. 10 and (ii) Rs. 60,21,528 on account of late 3 online Form No. 9A application for exercise of option under caluse 2 of Explanation to section 11(1) of the Act.
5. The assessee carried the matter in appeal before the Ld. CIT(A)/ NFAC challenging the said additions/disallowance made by the Ld. AO. Before the Ld. CIT(A)/NFAC, there was non-compliance of notice(s) of hearing. The Ld. CIT(A)/NFAC dismissed the appeal of the assessee for non-prosecution and endorsed the findings of the Ld. AO.
Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that there was no intentional non-compliance of the notice(s) of hearing issued by the Ld. CIT(A)/NFAC. Referring to the affidavit of the assessee, he submitted that the assessee’s accountant could not check the emails as he was in bad health due to which the requite compliance could not be made. He submitted that all the notices were issued only online via e-mail due to which they remained un-complied with. He contended that the assessee was not granted sufficient opportunity of hearing by the Ld. CIT(A)/NFAC before ex-parte dismissal of the appeal of the assessee. He submitted that given an opportunity the assessee is in a position to furnish all the requisite supporting documents/evidence to substantiate its case before the Ld. CIT(A)/NFAC. The Ld. AR, therefore, urged that the matter may be sent back to the file of Ld. CIT(A)/NFAC for adjudication afresh on merits.
The Ld. DR had no objection to the above proposition of the Ld. AR.
We have heard the Ld. Representative of the parties and perused the material available on record. We observe that the notices issued by the Ld. CIT(A) remained un-complied with owing to the reasons stated in the preceding paragraphs. The Ld. CIT(A)/NFAC vide ex-parte order dated 15.03.2024 dismissed the appeal of the assessee in limine for non-prosecution of the appeal. On merits, the Ld. CIT(A)/NFAC has confirmed the addition made by the Ld. AO for want of supporting documentary evidence during the appellate proceedings before him. Before us, the Ld. AR has pleaded that given an opportunity the assessee is in a position to file the supporting documentary evidence in support of its claim.
9.1 The appellate order reveals that the Ld. CIT(A)/NFAC has applied the decision of the Hon’ble Supreme Court in CIT Vs. B. N. Bhattachargee (1979)
4 118 ITR 461 (SC) and Delhi Tribunal in CIT Vs. Multiplan India (P.) Ltd. 38 ITD 320 (Del.) and also other decisions of the Hon’ble High Court(s) in the case of Estate of Late Tukojirao Holkar Vs. CWT, 223 ITR 480 and New Diwan Oil Mills Vs. CIT (2008) 296 ITR 495 and dismissed the appeal of the assessee for non- prosecution. No doubt, the Ld. CIT(A)/NFAC may decide the appeal ex-parte where the assessee does not prosecute his appeal in spite of several opportunities. Nonetheless, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereof and the reasons for the decision. We observe that the Ld. CIT(A)/NFAC has passed the impugned order in concurrence of the order of Ld. AO without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.
9.2 On the above facts and in the circumstances of the case, we deem it fit in the interest of justice and fair play to set aside the order of Ld. CIT(A)/NFAC and restore the matter back to his file for adjudication afresh on merits and pass speaking order on merit after allowing reasonable opportunity of being heard to the assessee who shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per fact and law. We order accordingly.
In the result, the appeal of assessee is treated as allowed for statistical purpose.