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Facts
The assessee, Gyan Vikas Samiti, filed two appeals for A.Y. 2010-11, one against the dismissal of its assessment appeal *in limine* by the CIT(A) for alleged non-payment of advance tax, and another against a penalty imposed under Section 271(1)(c). The assessee contended its income was exempt under Section 10(23C)(iiiad) as an educational institution, resulting in nil tax liability and thus no requirement to pay advance tax under Section 249(4).
Held
The Tribunal condoned the delay in filing the appeals and ruled that the CIT(A) violated natural justice by dismissing the appeal *in limine* without providing a show cause notice or opportunity to be heard. Consequently, both the CIT(A)'s orders for the assessment and penalty appeals were set aside, with directions for *de novo* orders after granting the assessee a proper hearing and deciding on the merits, including the applicability of Section 249(4).
Key Issues
Whether dismissal of appeal *in limine* by CIT(A) for alleged non-compliance with Section 249(4) without a show cause notice violates natural justice; and whether an educational institution with exempt income under Section 10(23C)(iiiad) is liable for advance tax.
Sections Cited
253(3), 249(4), 10(23C)(iiiad), 271(1)(c), 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ALLAHABAD BENCH “DB”, ALLAHABAD
Before: SHRI ANADEE NATH MISSHRA & SHRI SUBHASH MALGURIA
A) These are appeals preferred by the assessee against the action of the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 13.03.2024, for the assessment year 2010-11. Since the identical issues and grounds have been raised for adjudication, all these appeals were heard together and are being disposed of by way of common order for the sake of convenience and brevity. In pertaining to A.Y. 2010-11, the assessee has raised the following grounds of appeal: - “1 Because the order of Ld. CIT (A) is contrary _ - to law, facts and circumstances of the case. The order of the Ld. CIT (A) is liable to be set aside.
Because the order of Ld. CIT (A) has erred in dismissing the appeal, by not issuing any show cause notice, on the ground of not paying due advance tax by the appellant whereas the admitted tax liability is ‘NIL’ and the appellant was not liable to pay any advance tax in view of its exempt income under the provisions of section 10(23C) (iiiad) being involved in educational activities. The order of the Ld. CIT (A) is on misconceived facts and against the principles of natural justice therefore liable to be set aside, 3. The appellant reserves its rights to amend, delete or modify the present Grounds of Appeal
in: future in accordance with the law.” (A.1) The grounds of appeal of the assessee for are as under: - & 8/LKW/2025 Page 2 of 6
1. Because the order of Ld. CIT (A) is contrary to law, facts and circumstances of the case. The order of the Ld. CIT (A) 1s liable to be set-aside.
2. Because the order of Ld. CIT (A) has erred in disallowing the appeal, by not issuing any show cause notice, on the ground of not paying due advance tax by the appellant whereas the admitted tax liability is ‘NIL’ and the appellant was not liable to pay any advance tax in view of its exempt income under the provisions of section 10(23C) (iiiad) being involved in educational activities. The order of the Ld. CIT (A) is on misconceived facts and against the principles of natural justice therefore liable to be set aside.
Because the Ld. CIT (A) has erred in dismissing the appeal imposing penalty of Rs. 17,02,000/- without going through the facts of the case and looking into the educational activities of the appellant society. The order of the penalty is liable to be set-aside. 4The appellant reserves its rights to amend, delete or modify the present Grounds of appeal in future in accordance with the law.” (A.2) These appeals have been filed by the assessee, beyond time limit prescribed under section 253(3) of IT Act. The assessee has submitted applications for condonation of delay, supported by affidavit. The Ld. Sr. Departmental Representative for Revenue did not express any objection to the delay being condoned. Being satisfied with the reasons stated in application seeking condonation of delay in filing of these appeals; we condone the delay in filing of these appeals and admit the appeals for decision on merits.
(B) We first take up appeal vide ITA. No.7/ALLD/2025. In this case, the Ld. CIT(A) dismissed the assesse’s appeal in limine on the ground that the assessee did not fulfill the requirement u/s 249(4) of the Income Tax Act, 1961 (“Act”, for short). The relevant portion of the order of the Ld. CIT(A) is reproduced as under: - (C) The assessee filed appeal against the aforesaid impugned order of the Ld. CIT(A). In the grounds of appeal, it has been stated by the assessee that the Ld. CIT(A) erred in dismissing the appeal for non-payment of Advance Tax, without issuing any show cause notice. It has been contended that the admitted tax liability was nil and the assessee was not liable to pay any advance tax in view the income of the assessee being exempt u/s 10(23C) of the Act. Further, in grounds of appeal, it has been contended by the assessee that the impugned order of the Ld. CIT(A) was liable to be set aside. On perusal of the impugned appellate order dated 13.03.2024 of the Ld. CIT(A), it is found that there is no mention of any opportunity having been given by the Ld. CIT(A) before dismissing the assessee’s appeal in limine for the alleged default in compliance with section 249(4) of the Act. As the Ld. CIT(A) failed to provide any opportunity to the assessee before dismissing the assessee’s appeal, there was clear violation of principles of natural justice. In view of the foregoing, the impugned appellate order dated 13.03.2024 is set aside and & 8/LKW/2025 Page 5 of 6 the Ld. CIT(A) is directed to pass de novo order in accordance with law, after providing reasonable opportunity to the assessee. If it is found by the Ld. CIT(A), in pursuance of the aforesaid direction, that the assessee is not in default u/s 249(4) of the Act, then, the Ld. CIT(A) is further directed to admit the appeal and decide the grounds of appeal on merits through a speaking order in accordance with law.
Assessing Officer u/s 271(1)(c) of the Act in respect of income assessed vide assessment order dated 29.12.2017 whereby the assessee’s income was assessed at Rs.58,27,000/-. As we have set aside the impugned order of the Ld. CIT(A) dated 13.03.2014 passed in respect of the assessment order; and have directed the Ld. CIT(A) vide foregoing paragraph (C) of this order, to pass de novo order; the Ld. CIT(A) will be required to take a fresh look on the assessee’s appeal against levy of penalty u/s 271(1)(c) of IT. Act also. Therefore, the impugned appellate order dated 13.03.2024 of Ld. CIT(A) in this appeal is also is set aside and the Ld. CIT(A) is directed to pass de novo order in accordance with law, after deciding the appeal in respect of the assessment order passed by the Assessing Officer; and after providing reasonable opportunity to the assessee.
(E) In the result, the impugned orders of the Ld. CIT(A) are set aside in both the appeals before us and the Ld. CIT(A) is directed to pass de novo orders, in accordance with aforesaid directions. For statistical purposes, both appeals are partly allowed. Order pronounced in open court on 30/09/2025.