SCHOOL OF ENGIERING AND APPLIED SCIENCES,NEW DELHI vs. INCOME TAX OFFICER, ASSESSMENT UNIT, DELHI

PDF · subscribers
ITA 7518/DEL/2025Status: DisposedITAT Delhi20 March 2026AY 2020-216 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee had demonstrated before it that it possessed a valid Registration Certificate for the year under consideration, having been registered under Section 12AB since 2002, and that its renewal had been granted vide a certificate dated 24.09.2021 for AY 2022-23 to 2026-27. In light of these facts and documentary evidence, the Tribunal deemed it expedient to restore the matter to the file of the Assessing Officer (AO) for considering the material evidence that would be submitted or had been submitted by the assessee. The Tribunal set aside the impugned order and restored the matter to the AO to decide it afresh. The assessee was directed to present its case before the AO within 60 days from the date of the order. The appeal was allowed for statistical purposes. The Tribunal did not decide on the merits of the additions made by the AO, as the matter was restored for fresh consideration.

What were the facts?

The assessee, School of Engineering and Applied Sciences, filed its return of income for Assessment Year 2020-21 declaring NIL income. The case was selected for compulsory scrutiny due to issues concerning registration/approval under various sections of the Income Tax Act. The Assessing Officer (AO) passed an assessment order under Section 143(3) read with Section 144B, making three additions: Rs. 10,787/- for refusing the benefit of Section 12A due to lack of proof of valid registration, Rs. 1,44,901/- for interest income appearing in Form 26AS, and Rs. 96,75,000/- for time deposits under Section 69A. The assessee appealed to the NFAC (CIT(A)), which dismissed the appeal ex-parte for alleged non-compliance with notices. The assessee is now in appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the AO erred in selecting the case for compulsory scrutiny based on the reason that registration/approval under various sections of the Act had not been granted or had been cancelled/withdrawn, when the assessee's registration was valid for the subject year? (Question of law and fact, concerning Section 12A, 35(1)(ii)/(iia)/(iii), 10(23C)). 2. Whether the AO erred in passing the order under Section 143(3) read with Section 144B without granting adequate opportunity of being heard, violating principles of natural justice? (Question of law). 3. Whether the AO erred in concluding that the appellant is not entitled to benefits available to persons registered under Section 12A/12AA, ignoring documents and submissions, especially when registration was valid till 31.03.2021? (Question of law and fact, concerning Section 12A). 4. Whether the AO erred in making an addition of Rs. 10,787/- by denying the benefit of Section 11 and 12? (Question of law and fact, concerning Section 11 and 12). 5. Whether the AO erred in making an addition of Rs. 1,44,901/- as undisclosed interest income solely based on Form 26AS entries? (Question of law and fact). 6. Whether the AO erred in treating aggregate time deposits of Rs. 96,75,000/- as unexplained investments under Section 69A without appreciating the source of funds, nature of deposits, and explanations furnished? (Question of law and fact, concerning Section 69A). 7. Whether the AO wrongly initiated penalty proceedings under Sections 270A and 271AAC, as the additions/disallowances are unjustified? (Question of law). Assessee's Contentions: The assessee argued that its registration under Section 12A was valid for the year under consideration. It also submitted that an old registration under Section 12A was placed before the AO, but the renewed approval, valid from AY 2022-23 to 2026-27, could not be placed before the AO. The assessee requested the matter be restored to the AO for an opportunity to present all documents regarding valid approval under Section 12A(1)(ab) and other additions. The assessee also contended that it was not granted adequate opportunity of being heard, violating principles of natural justice. Revenue's Contentions: The Revenue argued that the assessee failed to avail the opportunities granted by the Ld. CIT(A), who had no option but to pass an ex-parte order, and therefore prayed for dismissal of the appeal.

Which sections of the Income-tax Act were involved?

Section 12A,Section 143(3),Section 144B,Section 250,Section 11,Section 12,Section 69A,Section 270A,Section 271AAC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Before: SHRI RAJ KUMAR CHAUHAN, HON’BLE JUDICIAL & SHRI BRAJESH KUMAR SINGH, HON’BLE

For Appellant: Shri Priyansh Jain, CA
For Respondent: Shri Ravi Kant Choudhary, Sr. DR
Hearing: 18.03.2026Pronounced: 20.03.2026
1.

This appeal is directed against order dated 13.10.2025 passed by NFAC [hereinafter referred to as , “Ld. CIT(A)”] u/s 250 of the Income Tax Act, 1961 [hereinafter, referred to as, “Act”] wherein addition made vide assessment order dated 03.02.2021 was confirmed and appeal was dismissed ex-parte.

2.

The facts in brief as culled out from the proceedings of the Ld. Lower Authorities are that the assessee filed return of income for relevant A.Y. 2020-21 on 10.01.2021 declaring NIL Income. 1 The case was selected for compulsory scrutiny on the issue “Registration/Approval under various sections of IT Act have not been granted or have been cancelled/withdrawn”. The assessment order was passed u/s 143(3) r.w.s. 144B of the Act as the assessee has failed to supply the requisite information with respect to the registration u/s 12A and other details asked for during the assessment proceeding.

2.1 In the assessment order 3 Additions were made and the First Addition of Rs. 10,787/- was made by refusing benefit of 12A in the absence of filing the proof of valid registration u/s 12A(1)(ab) and, further observing that vide order dated 03.02.2021, the Commissioner Income Tax (Exemption) had rejected the application u/s 12A(1)(ab). The second addition was made of Rs. 1,44,901/- with respect to interest income appearing in Form 26AS of the assessee. The Third Addition was made u/s 69A with respect to the time deposit of Rs. 96,75,000/- in account of assessee maintained in Indian Bank. Aggrieved by the assessment order, assessee filed an appeal before Ld. CIT(A) who dismissed the same ex-parte as assessee allegedly failed to make compliance in pursuance to the notice sent on four dates as mentioned in Para 8.1 of the impugned order.

Aggrieved, the assessee is in appeal before the Tribunal and has raised the following grounds of appeal:

“1. That the Ld. AO has erred in law and in facts in selecting the present case for conducting compulsory scrutiny based on the reason "related to registration/approval under various sections of the Act, such as 124.35(1)(ii)/(iia)/(iii), 10(23C), etc.:- Cases where registration/approval under various sections of the Act, such as section 12A, 35(1)(ii)/(iia)/(iii), 10(23C), etc. have not been granted or have been cancelled/withdrawn by the Competent Authority, yet the assessee has been found to be claiming tax exemption/deduction in the return", when registration of the assessee was valid in the subject year.

2. That the Ld. AO has erred in law and on the facts by passing the order under section 143(3) r.w.s. 144B without granting adequate opportunity of being heard and in violation of principles of natural justice. The order is bad in law and without jurisdiction.

3. That the Ld, AO has erred in concluding that the appellant is not entitled to benefits available to persons registered under section 12A/12AA, ignoring documents and submissions made during assessment proceedings, more so, when registration of the assessee was valid till 31.03.2021.

4. That the Ld. AO has erred in law and on facts in making addition of Rs. 10,787/- by denying benefit of section 11 and 12 to the assessee and holding that the assessee is not entitled for any benefits available to persons registered u/s 12A of the Act.

5. That the Ld. AO has erred in law and on facts in making an addition of 21,44,901 as undisclosed interest income of the assessee solely based on entries in Form 26AS.

6.

That the learned Assessing Officer has erred in treating aggregate time deposits of 296,75,000 as unexplained investments u/s 69, without appreciating the source of funds, nature of deposits, and the explanations furnished by the appellant.

7.

That the learned Assessing Officer has wrongly initiated penalty proceedings under sections 270A and 271AAC, as the additions/disallowances themselves are unjustified and not sustainable in law.

8.

That the appellant craves leave to add, alter, amend, or withdraw any ground of appeal at the time of hearing.”

3.

We have heard the Ld. AR and the Ld. DR and perused the material placed on record. Ld. AR, at the outset, submitted that the assessee has placed on record before the Assessing Officer the old registration u/s 12A placed at page 13 of the Paperbook before the completion of the assessment proceedings. It is further fairly admitted that the renewed approval u/s 12A registration dated 14.09.2021 valid from A.Y. 2022-23 to 2026-27 placed at page No. 18 to 20 of the Paperbook could not be placed before the Ld. AO. It is, therefore, submitted that the matter may be restored to the Ld. AO for giving an opportunity to the assessee to present all these documents with respect to the valid approval u/s 12A(1)(ab) and also with respect to other addition made by the Ld. AO. The Ld. DR for the revenueon the other hand, submitted that the assessee has failed to avail the opportunity granted by Ld. CIT(A) who had 4 no option except to pass the order ex-parte and therefore, prayed for dismissing the appeal of the assessee.

4.

We have heard the rival submissions and perused the material placed on record. The assessee successfully demonstrated before us that the assessee was having a valid Registration Certificate for the year under consideration and it was registered u/s 12AB since 2002 and further that the renewal of the Registration had been granted vide certificate dated 24.09.2021 for A.Y. 2022-23 to 2026-27. In view of these facts and the documentary evidences brought to our notice, we deem it expedient to restore the matter to the file of the Ld. AO for considering the material evidence which will be submitted or has been submitted before the Ld. AO by the assessee for his consideration. The impugned order for the above reasons is being set-aside. The matter is restored to the file of Ld. Assessing Officer to decide it afresh. The assessee should present its case before the Ld. AO within a period of 60 days from this order.

5.

Appeal of the assessee is allowed for statistical purposes.

More judgments on Section 12A

All 6,064 judgments and leading authorities on Section 12A →

Recent GST High Court judgments

Search GST case law →