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Facts
The assessee, a Trust, filed an appeal before the CIT(A) against an order for assessment year 2018-19. The appeal was filed after a significant delay of 861 days, which the CIT(A) did not condone, dismissing the appeal.
Held
The Tribunal condoned the delay considering the nature of the assessee and the fact that income was assessed on a gross basis. The issue was set aside to the AO for fresh adjudication to assess income on a net basis, following previous orders.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned? Whether the income of the Trust should be assessed on a net basis instead of a gross basis?
Sections Cited
143(1), 154, 147, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
Assessee by : Shri B.M. Monga, Advocate Revenue by : Shri Vivek Vardhan, Addl.CIT, Sr.DR Date of Hearing : 05.05.2025 Date of Pronouncement : 07.05.2025 PHYSICAL HEARING O R D E R PER RAJ PAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 05.09.2024 passed for assessment year 2018-19.
With the assistance of ld. Representative, we have gone through the record carefully. The income of the assessee Trust was processed under Section 143(1) of the Act. It has A.Y.2018-19 2 filed an application under Section 154 of the Income Tax Act for rectification, but such application was rejected on 12.09.2020. Assessee has filed an appeal before the CIT(A) on 20.02.2023. Thus, this appeal was time barred by 861 days. Ld. CIT(A) did not condone the delay and dismissed the appeal.
A perusal of the record would indicate that the litigation of the assessee Trust was not handled by the Tax Consultant properly, not only for this assessment year but for assessment year 2019-20 and 2020-21. The appeals for all these years have been made time barred. In the present year, it was a Covid period when 154 order was passed and upto the month of May, 2022, delay in filing appeal has been condoned by the Hon'ble Supreme Court. Therefore, effectively the delay in the case of the assessee is from May, 2022 upto February,2023. We find that while processing the return of the assessee, CPC has taxed it on gross income which is not at all to be done by the Department. Income is to be assessed after excluding the expenditure for earning such income. A.Y.2018-19 3
Considering the case of a Trust whose income has been assessed on gross basis, we deem it appropriate that delay deserves to be condoned in this case.
In the earlier year, Tribunal has set aside this issue to the file of AO for fresh adjudication vide & 584/CHD/2024. The income of the assessee deserves to be assessed on net basis and not on gross basis. Accordingly, we condone the delay in filing the appeal before the CIT(A).
We adjudicate the issue on merit by setting aside the dispute to the file of AO for re-determination of taxable income of the assessee. The ld. AO is directed to follow the order of the ITAT passed in assessment year 2019-20 and 2021-22. This exercise be carried out after providing due opportunity of hearing to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.