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Facts
The assessee, Saraswati Sishu Mandir, filed its return of income for AY 2020-21 declaring NIL income. The case was selected for limited scrutiny, and the Assessing Officer disallowed a claim of expenses of Rs. 2,21,54,696/-, assessing the total income at Rs. 2,18,86,770/-. The assessee's appeal before the CIT(A) was dismissed due to a delay of approximately four months.
Held
The Tribunal observed that proper representation was not made by the assessee at earlier stages. Considering that the assessee claims to have sufficient evidence, the Tribunal deemed it appropriate in the interest of justice to provide another opportunity.
Key Issues
Whether the CIT(A) erred in dismissing the appeal on grounds of delay, and whether the disallowance of expenses was justified.
Sections Cited
250, 144, 147, 249(2), 57, 143(3), 11, 12, 12AA, 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CUTTACK BENCH AT KOLKATA
Before: SHRI DUVVURU RL REDDY(KZ) & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-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 2020-21 dated 04.11.2024, I.T.A. No.: 17/CTK/2025 Assessment Year: 2020-21 Saraswati Sishu Mandir. which has been passed against the assessment order u/s 144 of the Act, dated 09.09.2022. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. For that, on the facts and circumstance of the case, the Ld. CIT(A) has erred in law, by dismissing the appeal as not maintainable when notices were not served upon the assessee. Therefore on the facts and circumstances of the case, assessment u/s 144 is liable to be null and void.
For that, on the facts and circumstance of the case the Ld. CIT(A) has erred in law, by not admitting the appeal of the assessee considering that the appeal is not maintainable due to non-conformity of provisions of Section 249(2) of the Act without appreciating that the cause mentioned in the appeal memo is a sufficient cause to condone the delay of 140days. Therefore, we request to set aside the appeal order and restore the matter to the Assessing officer for adjudication u/s 147. 3. For that, on the facts and circumstance of the case, the ld. CIT(A) has erred in law, by not admitting the appeal of the assessee considering that the appeal is not maintainable due to non-conformity of provisions of Section 249(2) of the Act when the Ld. CIT(A) issued a notice for hearing by requiring the assessee to submit the details in respect of grounds of appeal raised. Therefore, dismissing the appeal after proceeded for hearing is bad in law and liable to be set aside.
For that, on the facts and circumstance of the case, the Ld. CIT(A) has erred in law, by dismissing the appeal as not maintainable when the Id. AO disallowed the entire deduction of Rs. 2,21,54,696/- when the assessee is a society running a school and maintains the books of Account and books of account is duly audited by a Chartered Accountants. Therefore disallowing the deduction of Rs. 2.21.54.696/- is arbitrary, unjustified, illegal on the facts and circumstances of the case. Therefore we request to set aside the order passed u/s 144. 5. For that, on the facts and circumstance of the case, the Ld. CIT(A) has erred in law, by dismissing the appeal as not maintainable when the Id. AO has not applied the See-11 & Sec-12 of the Income Tax Act 1961 to the Asst. Year 2020-21, which was pending before the Id. AO as on the date of Registration of the Society u/s 12AA. Therefore disallowing the deduction of Rs. 2.21.54.696/- is bad in law on the facts and circumstances of the case and liable to be set aside. I.T.A. No.: 17/CTK/2025 Assessment Year: 2020-21 Saraswati Sishu Mandir.
For that, the appellant may add, alter, amend any other grounds of appeal at time of hearing.”
Brief facts of the case are that the assessee is an AOP, a Society registered under the Societies Registration Act, 1860 and had filed its return of income for AY 2020-21 declaring total income of Rs. ‘NIL’ on 27.03.2021. The case was selected for limited scrutiny through Computer Assisted Scrutiny Selection (in short 'CASS') to verify the claim of expense u/s 57 of the Act. Statutory notices u/s 143(2) and 142(1) of the Act were issued and duly served upon the assessee but the assessee did not reply to the notices. The Assessing Officer (hereinafter referred to as Ld. 'AO') has referred to the provisions of section 57 of the Act and noted that the assessee had not given any details to prove the genuineness of the claim of expenses of Rs. 2,21,54,696/-. Therefore, the Ld. AO disallowed the claim and assessed the total income of the assessee at Rs. 2,18,86,770/- u/s 143(3) of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who, vide order dated 04.11.2024, dismissed the appeal of the assessee on the ground of delay of almost four months in filing of the appeal before the Ld. CIT(A) as the assessee failed to justify the reasonable cause for the delay in filing the appeal.
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
Rival submissions were heard and the record and the submissions made have been examined.
We find that at both the stages of assessment before the Ld. AO as well as before the Ld. CIT(A) in the appeal, proper representation was not made on behalf of the assessee. The Ld. AR requested that the I.T.A. No.: 17/CTK/2025 Assessment Year: 2020-21 Saraswati Sishu Mandir. matter may be remitted to the Ld. CIT(A) while the Ld. DR supported the order of the Ld. CIT(A). Therefore, we deem it appropriate in the interest of justice and fair play that another opportunity needs to be provided to the assessee to represent his case properly before the Ld. CIT(A) as the assessee claims to have sufficient evidence for the relief claimed. We, therefore, set aside the order of the Ld. CIT(A) and remit the appeal to him to be decided afresh, who shall allow an opportunity of being heard to the assessee and also grant an opportunity of representing the case and to be heard to the Ld. AO as per rule 46A of the Income Tax Rules, 1962, if required, and thereafter pass an order in accordance with law. For statistical purposes, the appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 29th May, 2025. [Duvvuru RL Reddy] [Rakesh Mishra] Vice President (KZ) Accountant Member Dated: 29.05.2025 Bidhan (P.S.) I.T.A. No.: 17/CTK/2025 Assessment Year: 2020-21 Saraswati Sishu Mandir. Copy of the order forwarded to:
Saraswati Sishu Mandir, Deulisahi, Dhenkanal, Odisha, 759001. 2. Assessment Unit, Income tax Department.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Cuttack Bench, Cuttack.
Guard File. //// By order