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Facts
The assessee, Rose Bud Muslim Educational Society, filed an appeal against the order of the CIT(Appeals) for AY 2016-17. The appeal was delayed by 30 days, which the Tribunal condoned. The assessee had filed a NIL income return but was assessed under section 144 of the Income Tax Act due to non-compliance with statutory notices and failure to provide documents.
Held
The Tribunal noted that there was no proper compliance before the AO and CIT(A). The assessee claimed that books of account could not be produced due to various reasons including arbitration proceedings and a criminal taking over the property. The Tribunal considered the request for a fresh opportunity.
Key Issues
Whether the assessment made under Section 144 without proper opportunity and evidence is sustainable? Whether the CIT(A) erred in confirming the assessment order on grounds of non-cooperation?
Sections Cited
250, 144, 142(1), 12AA, 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA-PATNA ‘e-COURT’, KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2016-17 dated 25.10.2024. 1.1 The Registry has informed that the appeal is delayed by 30 days. However, the assessee has filed a petition seeking condonation of delay stating that the delay in filing the appeal occurred due to her advanced age and ill health of the Trustee looking after the affairs of the assessee- Trust. She has also stated that the delay in filing the appeal was purely
The grounds of appeal
raised by the assessee are as under:-
1. For that the grounds of appeal hereto are without prejudice to each other.
2. For that the order of the learned assessing officer and also the Commissioner of Income Tax (Appeal) is bad both in law and on facts.
3. For that the order of the learned assessing officer and also the Commissioner of Income Tax (Appeal) is based on presumption, surmises and conjectures.
4. For that the order of the learned assessing officer and also the Commissioner of Income Tax (Appeal) is further violative of the settled principles of natural justice in as much as no opportunity much less adequate opportunity was ever afforded to the appellant to furnish its defence in course of assessment proceedings.
5. For that the learned assessing officer has erred in assessing the appellant in the status of a firm notwithstanding the fact that the appellant is a society registered under the Societies Act, 1860 and is assessed as such in all proceeding assessment years and has also been granted registration under section 12 AA of the Act by the learned Commissioner of Income Tax, Patna.
6. For that the learned assessing officer has erred in assessing the appellant in the status of the Association of Persons despite grant of registration under section 12A of the Act by the Commissioner of Income Tax.
7. For that the learned Commissioner of Income Tax (Appeal) has erred in confirming the order of assessment subjecting the gross income itself to tax on the solitary ground of non-cooperation in remand proceeding notwithstanding the fact that adequate explanation in relation thereto had furnished in course of such proceeding and further that similar such expenditure was allowed in the preceding assessment years.
Brief facts of the case are that the assessee-Society is registered under the Societies Act, 1860 and is engaged in the activity of imparting education for the assessment year under consideration. The assessee had filed the return of income showing total income at ₹NIL. The return was selected for complete scrutiny under Computer Assisted Scrutiny Selection (CASS) and statutory notices were issued, which were not complied with nor any document/bill & voucher/paper as requisitioned vide different notices issued under section 142(1) was filed. Therefore, the assessment was made under section 144 of the Act and the excess/deficit of income/expenditure was considered to the extent of Rs.90,47,790/- and the gross receipt of Rs.60,54,326/- was not allowed and the income of the assessee-Trust was assessed at Rs.60,54,326/- under section 144 of the Income Tax Act.
Aggrieved with the assessment order of ld. Assessing Officer, the assessee filed an appeal before the ld. CIT(Appeals), who has discussed the facts of the case and the assessment order. The Ld. CIT(A) issued several notices for hearing. Out of three notices, two remained uncompiled and reply was filed on 24.03.2021 in response to notice issued on 15.02.2021. The assessee filed additional ground/evidence in support of the appeal and a remand report was called for from the Ld. AO. The remand report submitted by the Ld. AO on 14/02/2024 was confronted to the assessee on 21/03/2024, but the assessee sought an adjournment on 12/04/2024, and the show cause issued on 18/10/2024 was not complied. Therefore, the claim could not be substantiated by the assessee and it was inferred by the Ld. CIT(Appeals) that the assessee was not pursuing the case of merits as
We have considered the rival submissions and the details available on record have been examined. It was submitted by the ld. A.R. that the assessee maintains the books of account but before the ld. Assessing Officer, no books of account could be produced. During the remand proceeding, the assessee could not produce the books of account as it was engaged in an arbitration proceeding and the books of account were required to be produced on 04.07.2023 before the ld. Assessing Officer. A local criminal had taken over the property of the assessee. The ld. CIT(A) has relied upon the assessment order and as during the remand proceeding the assessee failed to make any compliance and as it did not file any reply, the addition made by the ld. Assessing Officer was upheld and the appeal was dismissed. The Ld. AR submitted before the Tribunal that the assessment was made ex parte as no books of accounts were produced before the AO. The assessee had shown gross receipts of ₹ 60,54,330/- and the application of the gross income had been claimed at ₹ 90,47,790/- but the entire gross receipts have been added and no expenditure whatsoever has been allowed. It was requested that another opportunity may be provided as the society has sufficient documents in support of the application of income and the AO has not allowed any expenditure or even computed the income
We have considered the facts of the case, the submissions made and the documents filed. Since there was no proper compliance before both the Ld. AO as well as the Ld. CIT(A), in the interest of justice and fair play it was considered that the request of the assessee to set aside the case before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. CIT(A) as well as the order of the Ld. AO and remit the matter back to the Ld. AO for making the reassessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of the relief claimed and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in his appeal are partly allowed for statistical purposes.