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Facts
The assessee, a government-owned charitable institution, claimed a deduction of Rs. 3,86,64,236 as application of income towards charitable purposes. However, the CPC disallowed this claim under Section 143(1) without verifying accounts or providing a hearing. The assessee's rectification application under Section 154 was also rejected.
Held
The Tribunal noted that the CIT(A) dismissed the appeal based on the incorrect premise that the assessee had withdrawn it, which was denied. The original intimation under Section 143(1) was also passed without due process for the charitable institution.
Key Issues
Whether the CIT(A) erred in dismissing the appeal on an incorrect factual premise and whether the original intimation under Section 143(1) was passed without due opportunity to the assessee.
Sections Cited
143(1), 154
AI-generated summary — verify with the full judgment below
Before: SHRI INTURI RAMA RAO & SHRI SONJOY SARMA
Assessment Year: 2018-19 Energy Management Centre..………..…...………………..…..….……….Appellant Srikrishna Nagar, Sreekaryam P. O., Kerala – 695017. [PAN:AAATE1024A] vs. ITO, Thiruvananthapuram….…..….....................……........……...…..…..Respondent Appearances by: Shri Mathew Joseph, CA appeared on behalf of the assessee. Smt. Leena Lal, Snr AR, appeared on behalf of the Revenue. Date of concluding the hearing: June11, 2025 Date of pronouncing the order: August 12, 2025 ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 13.08.2024, in connection with the intimation issued under Section 143(1) of the Income-tax Act, 1961 (“the Act”) for the Assessment Year 2018–19.
At the outset, it is noted that there is a delay of 32 days in filing the present appeal before the Tribunal. The assessee has filed a condonation petition explaining the reasons or such delay. After considering the submissions and materials on record, we are satisfied that there was reasonable cause for the delay in filing the appeal. Accordingly, the said delay is condoned, and the appeal is admitted for adjudication.
Energy Management Centre 3. Brief facts of the case are that the assessee is a government-owned charitable institution functioning with the objective of promoting energy savings in the State as part of the National Power Policy. The assessee filed its return of income for the year under consideration, claiming deduction of Rs. 3,86,64,236 as application of income towards charitable purposes, duly disclosed in its return of income. However, the Centralized Processing Centre (CPC), Bengaluru, issued an intimation under Section 143(1) of the Act, disallowing the above claim without calling for or verifying the books of accounts, and without affording a reasonable opportunity of hearing to the assessee. The assessee maintains that it has maintained proper books of accounts and records, and that the deduction claimed was legitimate, as the amount was applied towards charitable purposes in accordance with law.
Aggrieved by the intimation under Section 143(1), the assessee filed a rectification application under Section 154 of the Act, which was also rejected, again without due consideration or opportunity to substantiate its claim.
The assessee filed an appeal before the Ld. CIT(A), wherein detailed written submissions dated 11.08.2024 were filed. However, the CIT(A) disposed of the appeal on the erroneous ground that the assessee had withdrawn the appeal, and dismissed the same accordingly. The assessee has categorically contended that it never made any request for withdrawal of the appeal.
We have heard the learned Departmental Representative and perused the material available on record.
After hearing both the parties and perusing the materials available on record, we find that It is clear from the record that the Ld.CIT(A) has Energy Management Centre dismissed the appeal on the basis of an incorrect factual premise, namely, that the assessee had withdrawn its appeal. This is specifically denied by the assessee. Further, the original intimation under Section 143(1) was passed without verifying the books of accounts or giving any opportunity of hearing to the assessee, who is a registered charitable institution. In our view, the matter requires reconsideration by the CIT(A). In the interest of justice, we deem it appropriate to restore the matter to the file of the Ld.CIT(A) with a direction to examine the issue afresh, after affording the assessee a reasonable opportunity of being heard, and to dispose of the appeal by passing a speaking and reasoned order.
In view of the above, the appeal of the assessee is allowed for statistical purposes, with directions as above.
12th August, 2025
Sd/- Sd/- [Inturi Rama Rao] [Sonjoy Sarma] लेखा सद�य/Accountant Member �या�यक सद�य/Judicial Member Dated: 12.08.2025.
Copy of the order forwarded to: 1. Appellant - 2.Respondent -` 3. CIT(A)- 4. CIT- , 5. CIT(DR),