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Facts
The assessee, a registered trust, claimed deduction for application of income under Section 11 of the IT Act for AY 2018-19. The AO disallowed the claim due to incomplete details and issues with accumulation of income. The assessee's appeal before the CIT(A) was dismissed ex-parte due to non-compliance with hearing notices.
Held
The Tribunal condoned the delay in filing the appeal due to the assessee not receiving hearing notices, attributing it to staff shortage and communication issues during the COVID-19 period. The Tribunal found that the assessee did not have an effective opportunity to represent their case.
Key Issues
Whether the assessee had a reasonable opportunity to present their case before the lower authorities and whether the delay in filing the appeal should be condoned.
Sections Cited
12A, 11, 142(1), 270A
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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI, VICE – & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 30/01/2025 in respect of the A.Y. 2018-19.
The brief facts of the case are that the assessee is a registered trust u/s. 12A of the Act and filed their return of income and claimed the receipts as deduction towards application of income u/s. 11 of the Act. The AO issued notice u/s. 142(1) on three occasions and sought for the details about the deduction claimed towards the application of income. The AO also sought for the reason for the accumulation of more income by the trust.
Page 2 of The assessee submitted their reply along with the details and form 10 and 10B for the accumulation of income. The AO had not accepted the reasons and proposed to disallow all the application of income. The AO without granting further time had disallowed all the applications of income and also the accumulated income for specified purpose. As against the said order, the assessee filed an appeal before the Ld.CIT(A) and contended that the order of the AO is not in accordance with the provisions of the Act. The Ld.CIT(A) sent nine hearing notices and the assessee had not filed any written submissions and the documents in support of their claim and therefore the Ld.CIT(A) had decided the appeal on merits and finally dismissed the appeal filed by the assessee for not producing any evidence to controvert the findings of the AO.
The assessee had filed the present appeal against the said order of the Ld.CIT(A) with a delay of 112 days.
The assessee also filed an application to condone the said delay. In the said application, the assessee submitted that they have not received the hearing notices either through the physical delivery or through email. The assessee further submitted that there was shortage of staff in the mutt office and therefore the email communications remain unmonitored. The assessee further submitted that they came to know about the proceedings only when they received a penalty notice u/s. 270A of the Act and thereafter the order of the Ld.CIT(A) was downloaded and after getting professional advice, the present appeal has been filed before this Tribunal with a delay of 112 days. The assessee submitted that the said delay is neither wilful nor wanted but due to the bonafide reasons as stated above and prayed to condone the said delay.
We have considered the reasons stated in the delay condonation application and we are satisfied that the assessee had sufficient cause for not filing the appeal in time before this Tribunal and therefore we are condoning the said delay and proceeded to decide the appeal on merits.
Page 3 of At the time of hearing, the Ld.AR submitted that the assessee is a charitable institution and registered u/s. 12A of the Act and all along the assessee filed their return of income and also claimed deduction u/s. 11 of the Act. The Ld.AR therefore submitted that only for the present year, being the covid 19 period, several details could not be produced and therefore prayed to grant an opportunity to appear before the AO. The Ld.AR also filed a paper book consisting the written submissions and the financial statements, form 10B and form 10, copy of the assessment order for the A.Y. 2017-18 and the details of the email to show that the Ld.CIT(A) had not sent the hearing notices to the correct email ID and therefore an another opportunity may be granted to appear before the AO for passing fresh orders.
The Ld.DR submitted that the assessee had not furnished the details called for by the AO and also not responded to the several hearing notices issued by the Ld.CIT(A) and therefore the appeal of the assessee may be dismissed as not eligible for any concession.
We have heard the arguments of both sides and perused the materials available on record.
The assessee being a registered charitable trust had applied the income towards its objects and claimed exemption u/s. 11 of the Act. The AO thereafter issued several notices and not satisfied with the replies filed by the assessee, made the assessment denying the deduction claimed u/s. 11 of the Act. We have also perused the documents filed along with the paper book in which it was submitted that the assessee is having form 10B and form 10 to show that the assessee is entitled for accumulation of the income and also eligible for deduction u/s. 11 of the Act. The assessee also furnished the assessment order for the A.Y. 2017-18 in which the return of income declared by the assessee has been accepted by the AO. Further, we have also noted that the assessee in their return of income had mentioned an email ID which is the new email ID of the assessee whereas the notices were sent to the email ID of the erstwhile accountant who was in service
Page 4 of upto the F.Y. 2021-22. We have also perused the profile of the assessee in the portal in which the new email ID has been mentioned as sbspsm1300@gmail.com. Therefore, the submissions made by the assessee that they had not received the hearing notices of the Ld.CIT(A) having some force. In such circumstances, we are of the view that the assessee had no effective opportunity to represent the case before the authorities. As already stated, the assessment has been made during the covid period and the appeal hearing notices were sent to the erstwhile accountant and therefore before both the authorities, the assessee had no effective opportunity to represent their case.
Even though the appeal has been filed against the ex-parte order of the Ld.CIT(A), we deem it fit to remit this issue to the file of the AO for denovo consideration so that the assessee can appear before the AO and produce all the details before the AO.
We therefore set aside the orders of both the authorities and remit this issue to the file of the AO for fresh consideration. We also direct the AO to send the communications to the assessee’s new email ID spspsm1300@gmail.com and thereafter complete the assessment after hearing the assessee and also after receiving the documents as required by the AO.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 16th February, 2026.
Sd/- Sd/- (PRASHANT MAHARISHI) (SOUNDARARAJAN K.) Vice – President Judicial Member Bangalore, Dated, the 16th February, 2026. /MS /