SREE DHARMA PARIPALANA YOGAM,PALLURUTHY,ERNAKULAM vs. INCOME TAX OFFICER, ERNAKULAM

Briefly the facts of the case are that the assessee is a society registered under the Travancore-Cochin Literary, Scientific and Charitable Societies Act, 1860. The assessee-society was formed with the object of imparting education and maintenance of temple. No regular return of income under the provisions of sec.139(1) of the Income-tax Act, 1961 (“the Act” hereinafter) was filed. The Assessing Officer (“the AO” hereinafter) formed an opinion that the income escaped assessment of tax, based on the information that the assessee . Sree Dharma Paripalana Yogam. made cash deposit in the bank account to the tune of Rs.1,23,60,844. Accordingly a notice u/s.148 of the Act was issued on 31st March, 2023. In response of the notice u/s.148, the assessee filed return of income on 05.10.2023 declaring loss of Rs.25,90,630. Against the said return of income, the assessment was completed by the AO vide order dated 19th March, 2024 passed u/s.147 r.w.s. 144B at a total loss of Rs.10,80,701. While doing so, the AO made addition of Rs.9,88,867 being 8% of the cash deposit made in the bank account with Dhanlaxmi Bank, amounting to Rs.1,05,83,518, as unexplained money of the assessee and levied tax by invoking the provisions of sec.115BBE of the Act.

Being aggrieved with the above assessment order, an appeal was filed before the CIT(A), who vide the impugned order, dismissed the appeal for non-prosecution.

Being aggrieved, the assessee is n appeal before me in the present appeal, and contended that the cash deposits were made out of the voluntary contributions received from the members. Therefore, the cash deposits cannot be treated as unexplained money of the assessee. On the other hand, the learned Senior DR supports the orders of the authorities below and submits that no interference is called for in the orders of the lower authorities.

I have heard the rival contentions and perused the material available on record. The AO treated 8% of the cash deposits made in Dhanlaxmi Bank as unexplained money of the assessee-society. On appeal before the CIT(A), the CIT(A) dismissed the appeal for non- prosecution without entering into the merits of the additions. It is the . Sree Dharma Paripalana Yogam. settled position of law that the CIT(A), even while disposing of the appeal ex parte, is duty bound to dispose of the appeal on merits. Reliance in this regard can be placed on the decision of the Hon’ble Bombay High Court in the case of PCIT v. Premkumar Arjundas Luthra 279 CTR 614. Therefore, in the light of the above legal position, I am of the considered view that the matter requires to be remanded to the file of the CIT(A) with the direction to dispose of the appeal de novo on merits after affording reasonable opportunity of being heard to the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purposes.