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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Shri Waseem Ahmed & Shri T.R. Senthil Kumar
Appellant by : Shri Sanjay R Shah, A.R. Respondent by : Shri Ravindra, Sr.D.R. Date of hearing : 24-06-2022 : 13-07-2022 Date of pronouncement आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
The present appeal has been filed by the Assessee against the order dated 14.07.2021 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “NFAC”), against the order passed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2016-17.
Page No 2 Koshambh Charitable Trust vs. ACIT 2. The only grievance of the assessee is that the Ld.CIT(A) failed to condone the delay of 676 days in filing the appeal before the National Faceless Appeal Centre .
Brief facts of the case is that the assessee is a charitable trust registered u/s. 12A of the Act. For the Assessment Year 2016-17, the assessee filed its e-return of income on 29.09.2016, showing income at Rs. Nil. The assessee had shown gross income at Rs. 41,90,000/- and has claimed deductions of Rs. 40,95,926/- for amount applied towards objects of the trust and of Rs. 94,074/- for amount set apart from u/s. 11(1)(a) of the Act which is claimed only to the extent of income available, even though it is allowable up to Rs. 6,28,500/- being 15% of its income namely Rs. 41,90,000/-.
The stand of the department is that the above return was processed u/s. 143(1) on 21.02.2018 and served electronically to the assessee. However, the claim of the assessee is that it has not received the order dated 21.02.2018 passed u/s. 143(1) of the Act. The assessee trust while ascertaining the demand of Rs. 43,82,222/- raised for the subsequent assessment year 2017-18, while going through the Income Tax portal “Response to Outstanding Demand” that there is one more outstanding demand of Rs. 14,12,010/- relating to the present Assessment Year 2016- 17 was also there. Therefore, the assessee requested the CPC, Centre to furnish a copy of the u/s. 143(1) order dated 21.02.2018. This copy of the intimation was served to the assessee on 08.01.2020 and thereafter the assessee filed the statutory appeal Page No 3 Koshambh Charitable Trust vs. ACIT u/s. 246A on 05.02.2020 whereby that there is a delay of 676 days in filing the appeal which was not condoned by the NFAC on the ground that sufficient cause is not given by the assessee in filing the statutory appeal. Thus, appeal filed by the assessee was dismissed as not maintainable by the NFAC.
Aggrieved against the same the assessee before us raising the following Grounds of Appeal:
1. The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on the facts of the case of the Appellant, by dismissing the appeal only on the solitary ground that the appeal has been filed beyond stipulated time limit and hence it is not in conformity with the provisions of Section 249(2) of the I.T. Act, 1961.
2. The Ld. Commissioner of Income Tax (Appeals) has further erred in law as well as on the facts of the case by holding that the reasons stated by the Appellant for not filing the appeal within the prescribed time is found to be bereft of any merits and therefore, the Appellant had failed to satisfactorily explain that there is sufficient cause for condonation of delay in filing appeal.
3. The Ld. Commissioner of Income Tax (Appeals) has also erred in law as well as on the facts of the case of the Appellant by dismissing the appeal after holding that Intimation u/s. 143(1) dated 21.02.2018 and demand notice has been served on the Appellant by e-mail on 21.02.2018 and hence, the claim by the Appellant that it has not received the Intimation on 21.02.2018 as well as further claim that Intimation was received by the Appellant only on 08.01.2020 after request for copy, are not acceptable.
4. The Ld. Commissioner of Income Tax (Appeals) has also erred in law as well as on the facts of the case of the Appellant by dismissing the appeal on technical considerations of delay in filing the appeal without considering the cause of substantial and natural justice which ought to have been given preference by deciding the appeal on merits after condoning the delay.
5. The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on the facts of the case of the Appellant by confirming the assessed income as determined by passing Intimation u/s. 143(1) of the I.T. Act, 1961, after disallowing, valid and legitimate claims, for deduction of Rs.40,95,9267- as application of income towards object of the Appellant Trust and for deduction of Page No 4 Koshambh Charitable Trust vs. ACIT Rs.94,074/- being to the extent of income available and not exceeding 15% of income set-apart u/s.11(1)(a) of the I.T. Act,1961, as claimed in the return of income filed by the Appellant.
6. The Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on the facts of the case by confirming the assessed income determined by Intimation u/s.!43(l) of the I.T. Act, 1961, after making disallowances which cannot be considered as adjustments permissible or stipulated u/s. 143(l)(a) of the I.T. Act, 1961.
The appellant prays for the following: (i) Appeal be held as having been filed in time and in case it is held that there is delay in filing appeal, such delay be condoned. (ii) Deduction of Rs.40,95,926/- be held , allowable to the Appellant as application of income towards the objects of the Appellant Trust. (iii) Deduction of Rs.94,074/-be held allowable to the Appellant for amount accumulated or set apart u/s.11(1)(a) of the I.T. Act, 1961. (iv) Disallowances made be held as adjustments which cannot be considered as permissible or stipulated u/s.143(1)(a) of the I.T. Act, 1961.
The Ld.Cousnel Shri Sanjay Shah appearing for the assessee pleaded that there is no delay on the part of the assessee in filing the appeal, since order dated 21.02.2018 passed u/s. 143(1) was not served to the assessee. As it can be seen from the Income Tax portal relating to the Assessment Year 2016-17, the date of service of u/s. 143(1) is said to be Nil and also mode of service also Nil. Thus, having not been served with the 143(1) order, only when certified copy was obtained from the department on 08.01.2020 and thereafter the assessee filed the appeal on 05.02.2020. Thus, there is no delay on the part of the assessee in filing such appeal. However, NFAC without appreciating the above facts has simply dismissed on the ground no “sufficient cause” was made on behalf of the assessee.
Page No 5 Koshambh Charitable Trust vs. ACIT 7. Per contra, the ld. D.R. appearing for the Revenue supported the order of the lower authorities and submitted that the impugned order does not require any interference and requested to uphold the same.
We have given our thoughtful consideration and perused the materials available on record, as well as the Paper Book filed by the assessee. As it can be seen from page no. 32 of the paper book which is the screenshot of the Income Tax portal wherein for the Assessment Year 2016-17, the assessment is completed under 143(1)(a) with the DIN No. 2017201637086922336T on which demand raised as 21.02.2018. We also notice that the next two columns namely “date of service” and “mode of service” as Nil and no dates or details mentioned in those columns. The ld. D.R. appearing for the department could not give any information namely the date of service of 143(1)(a) order, as well as mode of such service to the assessee. In absence of the same, it cannot be considered the so called demand rised on 21.02.2018 was properly served on the assessee, so that the assessee has to take appellate remedy against such an order. Though, this plea was raised by the assessee before the NFAC, however, we find the same was not considered and NFAC passed a detailed order stating that “sufficient cause” was not shown by the assessee for the delay in filing such an appeal. This clearly shows that the ld. NFAC has not considered the factual situation and passed an order on the point of limitation only, without going into the merits of the case. Therefore we hold that there is no delay in filing the above appeal by the assessee.
Page No 6 Koshambh Charitable Trust vs. ACIT
In the above circumstances, we hereby set aside the order passed by the NFAC and direct Ld.CIT(A) to pass fresh order on merits of the case by giving proper opportunity to the assessee and then pass orders in accordance with law.
In the result, appeal filed by the assessee is partly allowed for statistical purposes.