Loading judgment…
Facts
The assessee, a charitable organization, filed a return declaring Nil income. The Assessing Officer (AO) added Rs. 1,22,42,474/- to the total income, considering it as income chargeable under Section 11(1B). The assessee contended that this amount was not received and spent in a subsequent year, and that the AO erred in adding it without considering a rectification application. The CIT(A) dismissed the appeal for non-compliance.
Held
The Tribunal held that the CIT(A) dismissed the appeal without adjudicating on merits and without addressing the request for a video conference hearing. Section 250(6) of the Act requires the CIT(A) to determine the points of dispute and record reasons. Therefore, the case was restored to the CIT(A) for decision on merits after providing a reasonable opportunity of hearing.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without a proper adjudication on merits and without granting an opportunity for a hearing. Whether the addition of Rs. 1,22,42,474/- under Section 11(1B) was justified.
Sections Cited
11(1B), 234B, 234C, 143(1), 143(2), 154, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI AMARJIT SINGH & SHRI RAJ KUMAR CHAUHAN,
Date of Hearing 02.07.2024 Date of Pronouncement 30.07.2024 आदेश / O R D E R Per Amarjit Singh (AM):
This appeal of the assessee for the assessment year 2018-19 is directed against the order dated 12.12.2023 passed by the ld. Commissioner of Income-tax, Appeals, NFAC, Delhi [hereinafter referred to as ‘the ‘ld. CIT(A)’]. The assessee has raised the following grounds before us:
“1. In the facts and circumstances of the case and in law, the learned Assessing Officer erred in adding and the CIT(A) erred in confirming addition of Rs. 1,22,42,474/- in respect of income chargeable u/s 11(1B) only on the basis of error in filling up the details in the ITR second time and without considering the rectification application filed u/s 154 vide letter dated 26.03.2021 filed against intimation u/s 143(1) in which it was contended that income which was not received is spent in subsequent year of receipt.
P a g e | 2 Shamji T Vora Amarsons Foundation
2. In the facts and circumstances of the case and in law, the learned Assessing Officer erred in wrongly charging interest u/s 234B and C.
3. The CIT(A) erred in confirming the above without granting an opportunity for personal hearing through video conferencing even though a specific request was made by the appellant and without appreciating detailed written submissions and rejecting judgements of Jurisdictional High Court of Bombay and other courts including SC.”
Fact in brief is that return of income declaring total income at Rs. Nil was filed on 25.09.2018. The assessee is registered as a charitable organization with DIT(E), Mumbai u/s 12A/12AA of the Act. The case of the assessee was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 23.09.2019. During the course of assessment, the assessing officer noticed that assessee has shown income chargeable u/s 11(1B) of Rs. 1,22,42,474/- in column 5(ii) of schedule Part B-TI in the ITR. The assessing officer observed that assessee has not included this amount in the taxable income. The assessing officer further observed that CPC, Bangalore while processing the return of the assessee has also added this amount to the taxable income of the assessee and as per information available on ITD database, neither any appeal nor rectification application u/s 154 has been filed by the assessee against the adjustments made by the CPC during processing u/s 143(1) of the Act. On query, the assessee explained that this amount of Rs. 1,22,42,474/- has already been added to the total income of the assessee and there was no need to add it to total income. However, the AO has not agreed with the submission of the assessee and stated that the assessee had itself admitted in its return of income and Form No. 10B as the aforesaid amount taxable therefore, same was added to the total income of the assessee.
P a g e | 3 Shamji T Vora Amarsons Foundation
The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee on the ground that assessee has not made any compliance during the course of appellate proceedings at the level of ld. CIT(A).
During the course of appellate proceedings before us, the ld. Counsel submitted that assessee has filed various details before ld. CIT(A), however without considering the submission filed by the assessee, the ld. CIT(A) has dismissed the appeal of the assessee. The ld. counsel further submitted that even the specific request for video conferencing was also made before the ld. CIT(A), however, same was not granted.
On the other hand, the ld. D.R supported the order of lower authorities.
Heard both the sides and perused the material on record. The return of income filed by the assessee was processed u/s 143(1) of the Act and addition on account of voluntary contribution of donation claimed of Rs. 1,22,42,474/- was added to the total income of the assessee. Subsequently, during the course of assessment, the assessing officer noticed that assessee had shown income chargeable u/s 11(1B) amounting to Rs. 1,22,42,474/- in column 5(ii) of schedule Part B-TI in the ITR, however, the assessee had not included this amount in the total income. The AO further stated that as per information available on ITD database, neither any appeal nor any rectification application u/s 154 has been filed by the assessee against the adjustments made by the CPC during processing of return u/s 143(1) of the Act. Therefore, the assessing officer has added the same to the total income of the assessee by treating the same as chargeable u/s 11(1B). The ld. CIT(A) has dismissed the appeal of the assessee on the ground that assessee has not made any compliance during the P a g e | 4 Shamji T Vora Amarsons Foundation course of appellate proceedings. During the course of appellate proceedings before us, the ld. counsel has filed paper book showing that various documents i.e. balance sheet, profit & loss account, computation of total income, Form 9A of A.Y. 2017-18, Form 9A of A.Y. 2018-19 and copy of acknowledgement of applying for rectification with enclosures etc. were filed both the ld. CIT(A).
We consider that ld. CIT(A) has dismissed the appeal of the assessee without adjudicating the same on merit even no finding relating to the request of the assessee for providing video conferencing was provided in the appellate order. We consider that section 250(6) of the Act contemplate that the ld. CIT(A) would determine point in dispute and therefore, record reasons on such point in support to his conclusion after referring the material available in the assessment record and filed by the assessee during the course of assessment and appellate proceedings. Therefore, we consider it appropriate to restore this case to the file of the ld. CIT(A) for deciding it on merit as contemplate u/s 250(6) of the Act after providing reasonable opportunity of hearing to the assessee. The assessee is also directed to make due compliance before the ld. CIT(A) in the set aside proceedings without any failure. Therefore, the appeal of the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.