SHALOM CHARITABLE MINISTRIES OF INDIA,PALAKKAD vs. ITO (EXEMPTION), THRISSUR

These are the two appeals preferred by the same Assessee directed against two separate orders, each dated 29/05/2025, passed by the National Faceless Appeal Centre, Delhi [hereinafter referred to as ‘NFAC’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the NFAC had dismissed the appeals against the Penalty Orders, dated 18/02/2022 and 08/06/2017, passed under Section 271(1)(c) of the Act for the Assessment Years 2011-2012 & 2007-08, respectively. The Assessee has also filed stay applications seeking stay on recovery of penalty.

We would first take up appeal pertaining to A.Y. 2007-08 which has been preferred by the Assessee challenging the Order passed by the NFAC, dated 29/05/2025. 3. When this appeal was taken up for hearing, none was present on behalf of the Assessee. After taking into consideration the contentions raised by the Assessee in the grounds of appeal, we proceeded to hear the Learned Departmental Representative to adjudicate the appeal on merits.

The relevant facts in brief are that the Assessee is a charitable trust. Vide Order, dated 08/06/2017, penalty of INR.18,74,916/- was levied upon the Assessee under Section 271(1)(c) of the Act in respect of Assessment Year 2007-08. Being aggrieved, the Assessee preferred appeal before the NFAC which was disposed of vide Order, dated 29/05/2025. Now the Assessee has preferred the present appeal before this Tribunal. On perusal of Ground No.5 raised by the Assessee in the present appeal, we find that the Assessee has contended that the appeal preferred by the Assessee was dismissed by NFAC without granting a reasonable opportunity of being heard and in clear violation of the provisions contained in NFAC Scheme, 2021. We find that before the NFAC, the Assessee had raised the following grounds of appeal: “1) The order of the learned Assistant commissioner of Income Tax, Circle-1, Palakkad in so far as prejudicial to the appellant opposed to law, facts and circumstances of the case.

However, on perusal of the impugned order impugned, we find that all the above grounds raised by the Assessee were not taken up together by the NFAC and adjudicated upon in paragraph No.7 of the order impugned. After reproduced the order passed by the first appellate authority in the quantum proceedings as well as the findings of the Tribunal in the appeal preferred by the Assessee against the order passed by the NFAC in the quantum proceedings, the NFAC has dismissed the appeal recording as under:

Hence, in this case the appeal is DISMISSED.”

We note that though the NFAC has reproduced the submissions made by the Assessee in Paragraph No.6 of the order impugned, the same have neither been taken into consideration nor adjudicated upon by the NFAC. Therefore, we are of the considered view that the impugned order passed by the NFAC cannot be sustained and is hereby set aside with the directions to the NFAC to adjudicate the grounds raised by the Assessee in the appeal before the NFAC afresh after granting the Assessee a reasonable opportunity of being heard as per law. The Assessee has directed to cooperate in the appellate proceedings before the NFAC and file all the relevant submissions/documents/details on which the Assessee wishes to place reliance before the NFAC on receiving notice of hearing. It is clarified that in case the Assessee fails to enter appearance before the NFAC or fails to file relevant documents/details/submission, the NFAC would be at liberty to adjudicate the grounds raised by the Assessee in appeal before NFAC on the basis of material on record. Our aforesaid decision draws strength from the judgment of the Hon’ble Bombay High Court in the case of CIT (Central) Nagpur vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bombay) wherein it was held that in view of the provisions contained in Section 250(6) of the Act the first appellate authority is required to deal with the issue raised by the assessee on merits while adjudicating the appeal stating the points for determination, the decision thereon and the reason for the decision. Accordingly, Ground No. 5 raised by the Assessee is allowed, while all the other grounds are dismissed as having been rendered infructuous. In terms of the aforesaid, the appeal preferred by the Assessee is treated as allowed for statistical purposes. Since the appeal has been disposed off as aforesaid, the stay application filed by the Assessee is dismissed as having been rendered infructuous at this stage.

We would now take up appeal pertaining to A.Y. 2011-2012 which has been preferred by the Assessee challenging the Order, dated 29/05/2025, passed by the NFAC.

Since the facts and circumstances prevailing in the Assessment Year 2011-2012 are identical to prevailing in Assessment Year 2007-08, our findings and adjudication in appeal pertaining in Assessment Year 2007-08 shall apply mutatis mutandis to the appeal for Assessment Year 2011-12. Accordingly, adopting the reasoning given while adjudicating A.Y. 2007-08 hereinabove, ground raised by the Assessee in the present appeal corresponding to Ground No. 5 of appeal for the Assessment Year 2007-08 is allowed, while all the other grounds are dismissed as having been rendered infructuous. In terms of the aforesaid, the appeal preferred by the Assessee is treated as allowed for statistical purposes. Since the appeal has been disposed off as aforesaid, the stay application filed by the Assessee is dismissed as having been rendered infructuous at this stage.

In result, the appeal preferred by the Assessee for the Assessment Year 2007-2008 and 2011-2012 are treated as allowed for statistical purposes while the connected stay applications are dismissed.

"धान आयकर आयु"त / Pr.CIT

"वभागीय ""त"न"ध ,आयकर अपील"य अ"धकरण कोचीन / DR,

ITAT, Cochin गाड" फाईल 6. / Guard file.