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Facts
The assessee challenged an order by NFAC for A.Y. 2020-21, contending that its return was processed under section 143(1)(a) with an addition of Rs. 1,31,67,939 due to delayed filing of Form 10B and ITR7. The assessee argued that the delay was due to the COVID-19 pandemic, for which the Supreme Court had extended statutory deadlines, and that it was not provided a reasonable opportunity of being heard.
Held
The Tribunal observed that the assessee was not granted an adequate opportunity to present its case, particularly considering the Supreme Court's extensions of time limits during the COVID period. To ensure justice and fair play, the Tribunal restored the appeal to the files of the CIT(A), directing a fresh decision after providing the assessee a reasonable and adequate opportunity of being heard.
Key Issues
Whether an assessment order passed under section 143(1)(a) making an addition due to delayed filing of Form 10B and ITR7, especially during a Supreme Court-extended COVID period, is valid without providing the assessee a reasonable opportunity of being heard, and if a detailed adjustment can be made under section 143(1)(a).
Sections Cited
143(1), 143(1)(a), 12AA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: SH. SAKTIJIT DEY & SH. N. K. BILLAIYA
PER N. K. BILLAIYA, AM:
This appeal by the assessee is preferred against the order dated 11.08.2023 by NFAC, Delhi pertaining to A.Y. 2020-21.
2. The grievance of the assessee read as under :- “1. Because the action for initiation, continuation and conclusion proceedings u/s 143(1) is being challenged on facts and law.
Because the action is being challenged on facts and law for not providing reasonable opportunity of being heard. The assessment order being passed is in violation of the principle of natural justice and without giving adequate time and opportunity to the appellant to present the case.
Because the action u/s 143(1)(a) is being challenged on facts and law as only mistake apparent from return can be made adjustment in 143(1)(a). If the adjustment required detailed discussion, no adjustment can be made in intimation u/s 143(1) (a). 4. Because the action is being challenged on facts and law for making addition of Rs.1,31,67,939 as income of the society overlooking that due to Covid there was delay in fling Form 10B and ITR7 both. Moreover, Honourable Supreme Court has extended the time limit between 20.03.2020 to 28.02.2022. 5. Because the action is being challenged on facts and law for making addition of Rs. 1,31,67,939 for non-fling of Form No. 10B and ITR7 which is a technicality and cannot be utilized for declining the claim of exemption u/s 12AA (2017) 145 DTR 0415 (Kar). 6. Alternatively, and without prejudice to above, the action is being challenged on facts and law for making addition of Rs. 1,31,67,939 by taking the total School Fees receipts as income overlooking that assessee has claimed expenses against said receipts and there is no donation received during the year. 7. For any consequential relief and/or legal claim arising out of this appeal and for any addition, deletion, amendment and modification in the grounds of appeal before the disposal of the same in the interest of substantial justice to the assessee.”
3. The sum and substance of the grievance of the assessee is that without affording adequate opportunity return has been processed u/s. 143 (1)(a) of the Act and without affording any reasonable opportunity addition of Rs. 131677939/- has been made for delay in filing form 10B and ITR 7.
4. We have given a thoughtful consideration to the grievance of the assessee. When the grievance of the assessee is considered in the light of the decision of Hon’ble Supreme Court extending the time limit during covid period we find that the assessee was not given adequate opportunity to present its case. Therefore, in the interest of justice and fair play we restore the appeal to the files of the CIT(A) with a direction to decide the appeal afresh after affording a reasonable and adequate opportunity of being heard to the assessee. 5. In the result, the appeal of the assessee is allowed for statistical purpose. 6. Decision announced in the open court on 31.01.2024.