VADODARA URBAN DEVELOPMENT AUTHORITY,VADODARA vs. THE ACIT, CIRCLE-2, EXEMP, AHMEDABAD

There was a delay of 162 days in filing of this appeal. The assessee has filed an affidavit explaining the reason of delay. It has been submitted that the assessee, Vadodara Urban Development Authority, is engaged in various development activities both within the city and in its outer skirts. It was explained that there was frequent transfer of the key personnel including Chief Executive Authority, internal accounting team and supporting clerical staff which had disrupted the flow of information and continuity of communication. The assessee has detailed the transfer of the Chief Executive Authority, whose charge was held as additional charge by someone else. For this reason, there was delay in filing the present appeal. The assessee has submitted that the delay in the filing of the present appeal was not intentional and that there was no mala-fide intention on the part of the assessee. The ld. CIT-DR, on the other hand, submitted that the condonation of delay may be decided on its merit.

The brief facts of the case are that the assessee had filed its return of income for A.Y. 2021-22 on 15.03.2022 declaring income of Rs. NIL. The case was selected for scrutiny to examine large receipts reported by the assessee Trust for charitable purposes. In the course of assessment, no compliance was made by the assessee. The AO had required the assessee to explain as to how its activities were covered in the definition of charitable purpose u/s 2(15) of the Act, which was not complied. Further the AO had noticed that the assessee did not furnish the audit report in Form number 10B within the due date and, therefore, the exemption claimed u/s 11 of the Act was not admissible. Accordingly, the AO had denied the exemption u/s 11/12 of the Act and completed the assessment u/s 143(3) r.w.s. 144B of the Act on 29.12.2022 at total income of Rs.88,74,03,926/-.

Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided vide the impugned order and appeal of the assessee was dismissed.

The assessee is now in second appeal before us. The following grounds have been taken in this appeal: - “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming disallowance of exemption uls. 11 and 12 of the Act by invoking the proviso to section 2(15) of the Act.

Shri Hardik Vora, Ld. AR of the assessee submitted that the Ld. CIT(A) had dismissed the appeal of the assessee without examining the merits of the addition. He explained that no compliance could be made by the assessee before the Ld. CIT(A) and for this reason the appeal was dismissed. He, therefore, requested that the assessee may be allowed another opportunity to explain the nature of its charitable activities and the matter may be set aside to the file of the Assessing Officer.

Per contra, Shri A P Singh, Ld. CIT-DR submitted that the assessee neither made compliance before the Assessing Officer nor before the ld. CIT(A). He further submitted that the ld. CIT(A) had allowed six opportunities to the assesses but no compliance was made by the assessee on any of these occasions. The Ld. CIT-DR explained that on the evidences filed by the assessee along with the appeal paper, the ld. CIT(A) had obtained remand report from the AO and thereafter the assessee was allowed multiple opportunities to submit its rejoinder on the remand report, which was not complied. Further that the ld. CIT(A) had also examined the merits of the case and given his findings on merits as well. The ld. CIT-DR, however, had no objection if the matter was set aside to the ld. CIT(A) for allowing another opportunity to the assessee to submit its rejoinder on the remand report of the AO and thereafter re-decide the matter.

We have considered the rival submissions. The undisputed fact is that the assessee neither complied before the Assessing Officer nor before the Ld. CIT(A). We, therefore, deem it proper to impose a cost of Rs.10,000/- on the assessee which should be paid to the Prime Minister National Relief Fund within 15 days of the receipt of this order. We are also of the opinion that the issue involved in the case is a recurring issue. As pointed out by the ld. AR of the assessee, identical issues were adjudicated in assessee’s own case for the A.Ys. 2016-17 to 2018-19 by the Coordinate Bench of this Tribunal in to 335/Ahd/2023 and to 344/Ahd/2023 dated 29.02.2024. We, therefore, deem it proper to set aside the matter to the file of the ld. CIT(A) with a direction to allow another opportunity to the assessee to explain the nature of its charitable activities and to submit its rejoinder on the remand report of the AO and thereafter decide the matter on merits. The assessee is also directed to comply before the ld. CIT(A) and not to seek adjournment without any pressing reason.

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