SATVARA GNATI SAMAJ SEVA MANDAL,MORBI vs. COMMISSIONER OF INCOME-TAX (APPEALS), RAJKOT

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ITA 436/RJT/2025Status: DisposedITAT Rajkot09 December 2025AY 2022-234 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, after hearing both parties and perusing the available record, noted that the CIT(A)'s order mentioned issuing notices but not their service upon the assessee. Considering the facts and circumstances, and in the interest of justice, the Tribunal decided to grant one more opportunity to the assessee to present its case before the CIT(A). The matter was remanded back to the file of the CIT(A) for fresh adjudication on merits. The assessee was directed to comply with notices and submit all required documents. The appeal was allowed for statistical purposes. The Tribunal did not decide on the merits of the grounds of appeal raised by the assessee, as the primary decision was to remand the case.

What were the facts?

The assessee, Satvara Gnati Samaj Seva Mandal, filed an appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated 24.06.2025. This order upheld the assessment order passed by the Assessing Officer (AO) under section 143(3) r.w.s 144B of the Income Tax Act, 1961, dated 07.03.2024, for Assessment Year 2022-23. The AO had determined the total income at Rs. 3,53,687/-. The assessee had filed a return declaring Nil income and an application for registration under section 12AB, which was rejected. The AO treated Rs. 3,53,687/- as business income and disallowed certain claims. The CIT(A) dismissed the assessee's appeal ex-parte due to non-compliance.

What were the issues?

1. Whether the learned Assessing Officer has erred in treating Rs. 3,53,687/- as business income of the assessee (Question of law and fact, concerning the nature of income). 2. Whether the learned Assessing Officer has erred in disallowing Rs. 106560/- being 15% of total income (Question of law and fact, concerning disallowance). 3. Whether the learned Assessing Officer has erred in disallowing Rs. 247127/- being claim of option allowed u/s 11(1) as deemed application of income (Question of law and fact, concerning deemed application of income under section 11(1)). 4. Whether the learned Assessing Officer has erred in initiating penalty proceedings u/s 270A (Question of law, concerning initiation of penalty proceedings under section 270A). Assessee's Contentions: The assessee primarily prayed for one more opportunity to explain its case before the lower authorities. Revenue's Contentions: The revenue relied on the order of the Ld. CIT(A). The Ld. Sr. DR did not object to the prayer of the assessee for another opportunity.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 12AB,Section 139(1),Section 143(1),Section 142(1),Section 11(1),Section 270A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT

Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA

For Appellant: Shri Darshak Thakkar, Ld. AR
For Respondent: Shri Abhimanyu Singh Yadav, Ld. Sr. DR
Pronounced: 09/12/2025

Assessment Year: (2022-23) Satvara Gnati Samaj Seva Mandal Vs. Commissioner of Income-tax Ashapura Nivas Near Meldi Mata (Appeals) Temple, Sundarvan Society, Samala Rajkot-360001 Road, Morbi, Rajkot-363641 �ायीलेखासं./जीआइआरसं./PAN/GIR No.: ABBTS5898L (Appellant) (Respondent) Appellant by : Shri Darshak Thakkar, Ld. AR Respondent by : Shri Abhimanyu Singh Yadav, Ld. Sr. DR Date of Hearing : 17/11/2025 Date of Pronouncement : 09/12/2025 आदेश/ O R D E R Per, Dinesh Mohan Sinha, JM: Captioned the appeal filed by the assessee, pertaining to Assessment Years (AY)-2022-23, is directed against the order u/s. 250 passed by the Learned Commissioner of Income Tax, and National Faceless Appeal Centre [(in short “NFAC/Ld. CIT(A)”] vide order dated 24.06.2025, which in turn assessment order passed by Income Tax Department / Assessing Officer under section 143(3) r.w.s 144B of the Income Tax Act, 1961 (in short “the Act”), vide order dated 07.03.2024.

2.

The Grounds of appeal

s raised by the assessee, are as follows:

1. That the learned assessing officer has erred in treating Rs. 353687/- as business income of the assessee.

2. That the order passed by the learned assessing officer is bad in law.

Sh. Satvara Gnati Samaj Seva Mandal 3. That the learned Assessing Officer has erred in disallowing Rs. 106560/- being 15% of total income.

4.

That the learned Assessing Officer has erred in disallowing of 4 Rs. 247127/- boing claim of option allowed u/s 11(1) as deemed application of income.

5.

That the learned Assessing Officer has erred in initiating penalty proceedings u/s 270A. 6.That the appellant craves leave to add, amend, alter, DLEETE, 6 change and / OR raise further grounds of appeal during the pendency of these proceedings.

3. Brief facts of the case, that the application for registration of the trust u/s. 12AB of the I.T. Act, 1961 was filed electronically on 24/11/2022 by the assessee in Form No. 10AB under Rule 17A of the I.T. Rule, 1962. The Assessee has filed its return of income u/s 139(1) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') on 11.08.2022 declaring total income at Rs. Nil/-. The return of income was processed u/s. 143(1) of the Act. However the registration application of the assessee was rejected. Later on, the case was selected under 'Compulsory Selection' by the Income Tax department. That Compulsory Selection for scrutiny was based on the issue to verify that registration/approval under various sections of the Act, such as section 12A, 12AB, 35(1)(ii)/(iia)/(iii), 10(23C), etc. have not been granted or have been cancelled/withdrawn by the Competent Authority, notice u/s 143(2) of the Act dated 29.06.2023 and other notices u/s 142(1) of the Act were issued to the assessee along-with questionnaire. In compliance to the notice, the assessee has filed the copy of return of income and computation of income for AY 2022-23, audit report, Profit & Loss account, balance-sheet and accompanying enclosures and other details as required by the notice. the assessee was found to be claiming tax exemption/deduction in the return while the application of the assesse filed in Form No. 10AB for the registration u/s. 12AB of the Act was rejected. However, as admitted by the assessee does not have a valid registration till date.

Page 2 of 4 Sh. Satvara Gnati Samaj Seva Mandal The assessment computed, as per details given below: Sr.No. Description Amount(in Rs.) 1. Income as per Return of Income filed Nil/- 2. Income as computed u/s 143(1)(a) Nil/- 3. Variation <Addition of surplus amount> Rs. 3,53,687/- Total Income determined 4. Rs. 3,53,687/-

4. The assessee filed the appeal against the assessment order dated 07.03.2024 of before the Ld.CIT(A), which was dismissed by the Ld.CIT(A), with following remarks: “1. It is pertinent that in order to decide this appeal in a timely manner, a number of notices/ communications/correspondences were made through ITBA portal to the appellant, viz., communications dated 01.05.2024, 26.03.2025, 08.04.2025 & 17.06.2025. However, there has been no compliances from the part of the appellant till date.. There is no gainsaying that once the appeal is filed by the appellant, it is obligatory on its part to purposefully and co-operatively pursue the same in a worthwhile manner, which the appellant has evidently failed to do. Hence, in view of the aforesaid total non-compliance of the instant appeal on the part of the appellant, the instant appeal is adjudicated and disposed of, ex-parte, primarily on the basis of documentation available on record. The appellant has failed to avail the opportunity to file / furnish the submissions / documents in support of the grounds of appeal

though the appellant was offered for sufficient opportunity to file / furnish the submissions during the course of appellate proceedings. Furthermore, it is pertinent that the appellant has not sought any adjournment during the appellate proceedings. On the other hand, the Assessing Officer has passed a well-reasoned and speaking order. The Assessee has not rebutted the reasoning given by the Assessing Officer in the Assessment Order while assessing the total income. Therefore, the appeal deserves to be dismissed. Accordingly, it is dismissed.”

5. That the assessee challenged the legality and validity of the impugned both the orders dated 24.06.2025 and filed an appeal before us.

5.1. During the course of hearing, the Ld. AR of the assessee prayed to one more opportunity may kindly be given to the assessee to explain the case before the Lower Authority. 5.2. On the contrary, the Ld. Sr. DR for the revenue and relied on the order of the Ld.CIT(A). However, Ld. Sr. DR has not objected to the prayer of the assessee.

6.

We have heard both the parties and perused the material available on record. We note that the order of the Ld. CIT(A) speaks about the issue of the notice to the assessee, but not talked about the service of the notice upon the assessee. After considering the facts and circumstances of the case, we are of the view that, in the interest of justice, one more opportunity should be given to the assessee to present his case before the Ld.CIT(A) and remand the matter back to the file of the Ld. CIT(A) for fresh adjudication on merits. After giving due opportunity to the assessee and the assessee is further directed to comply with the notices and submit all the required documents un support of the return of income as and when called for by the Ld. CIT(A) for hearing.

7.

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

Order is pronounced in the open court on 09/12/2025.

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