SREE JAIN SHIKSHA SAMITI,BANGALORE vs. THE INCOME TAX OFFICER (EXEMPTION) WARD- 3, BANGALORE

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ITA 693/BANG/2020Status: DisposedITAT Bangalore01 January 2021AY 2017-184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the order passed by the CIT(A) was ex-parte and violated principles of natural justice. Therefore, the CIT(A)'s order was set aside to provide the assessee with an adequate opportunity to present its case.

What were the facts?

The assessee, a charitable trust, inadvertently failed to upload its audit report in Form 10B along with its return of income. The Assessing Officer rejected its exemption claim under Section 11 of the Income Tax Act. The assessee appealed to the CIT(A), but the CIT(A) passed an order without providing a proper opportunity of being heard.

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order without affording the assessee an opportunity of being heard. Whether the rejection of exemption under Section 11 due to non-furnishing of audit report in Form 10B was justified without considering the circumstances.

Which sections of the Income-tax Act were involved?

Section 11,Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A’’BENCH: BANGALORE

Before: SHRI GEORGE GEORGE K., JUDICIAL SHRI B.R. BASKARAN

For Appellant: Smt. Suman Lunkar, A.R
For Respondent: Shri Kannan Narayan, D.R
Hearing: 31.12.2020Pronounced: 01.01.2021

PER B.R. BASKARAN, ACCOUNTANT MEMBER:

1.

The assessee has filed this appeal challenging the order dated 16.9.2020 passed by Ld. CIT(A)-14, Bengaluru and it relates to the assessment year 2017-18. The assessee is aggrieved by the decision of Ld. CIT(A) in confirming the rejection of exemption claimed by the assessee u/s 11 of the Income-tax Act,1961 ['the Act' for short].

2.

The Ld. A.R. submitted that the assessee is a Charitable Trust duly registered u/s 12A of the Act. It filed its return of income for the year under consideration declaring Nil income on Sree Jain Shiksha Samiti, Bangalore

Page 2 of 4 7.11.2017, within the period of extended due date granted for the year under consideration. The return of income was filed electronically. However, the assessee inadvertently omitted to upload audit report in Form No.10B along with return of income. Hence, during the course of assessment proceedings, the A.O. rejected the claim for exemption u/s 11 of the Act on account of non-furnishing of audit report in form No.10B.

3.

The Ld. A.R. submitted that the assessee challenged the assessment order so passed by the A.O. by filing appeal before Ld. CIT(A). The Ld. A.R. submitted that the Ld. CIT(A) posted the appeal for hearing on 4.9.2020. On that date, the assessee sought adjournment of the matter. Subsequently, the assessee filed its written submissions before Ld. CIT(A) on 30.9.2020. It was noticed later that the Ld. CIT(A), however, had passed the order on 16.9.2020 itself without giving an opportunity of being heard to the assessee. The Ld. A.R. also submitted that even though the order of Ld. CIT(A) is dated 16.9.2020, yet it was digitally signed by Ld. CIT(A) only on 21.9.2020. The Ld A.R submitted that the assessee received the order of Ld CIT(A) on 14.10.2020 and the written submissions were filed prior to the dispatch of order of Ld. CIT(A).

4.

The Ld. A.R. also submitted that the Ld. CIT(A), in paragraph 4.2.3 of the order has mentioned that the due date for filing form No.10B is 30.6.2017. She submitted that the Ld. CIT(A) was not correct in mentioning so, since the due date for filing form No.10B for the year under consideration was 30.11.2017. Accordingly, she submitted that this observation of the Ld. CIT(A) also needs to be set aside.

Sree Jain Shiksha Samiti, Bangalore

Page 3 of 4 5. The Ld. A.R. also submitted that the assessee has uploaded form No.10B subsequently on 17.12.2019 and it has also filed a petition before CBDT for condonation of the delay in furnishing form No.10B. She submitted that the said petition is still pending before CBDT. Accordingly, the Ld. A.R. submitted that the assessee may be provided with an opportunity to present its case before Ld. CIT(A).

6.

We heard Ld. D.R., who submitted that the A.O. has rejected exemption claimed u/s 11 of the Act since the assessee did not furnish audit report in form No.10B along with return of income. Accordingly, he submitted that the Ld. CIT(A) was justified in confirming the rejection of exemption claimed by the assessee.

7.

We heard the parties and perused the record. It is the case of the Ld. A.R. that the assessee sought adjournment before Ld. CIT(A) when the appeal was posted for hearing for the first time on 4.9.2020. Thereafter, the assessee was not given an opportunity of being heard by Ld CIT(A). It is submitted that the assessee filed written submissions before Ld. CIT(A) on 30.9.2020. However, by that time, the Ld. CIT(A) had already passed the order. Accordingly, we notice that the order passed by Ld. CIT(A), in effect, is an ex- parte order, without giving to the assessee opportunity of being heard. Accordingly, in the interest of natural justice, we are of the view that the assessee should be provided with an opportunity to present its case before Ld. CIT(A). In fact, affording one more opportunity to the assessee would promote the cause of justice. Accordingly, we set aside the entire order passed by the Ld. CIT(A) and restore all the issues to his file for adjudicating them afresh, after affording adequate opportunity of being heard to the assessee.

Sree Jain Shiksha Samiti, Bangalore

Page 4 of 4 8. In the result, the appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 1st Jan, 2021

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