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Facts
The assessee, a charitable trust, appealed against orders from the CIT(A) for AY 2015-16 and 2017-18. The appeals concerned additions for cash deposits and interest, and denial of exemption under Section 11. The assessee contended that non-compliance with lower authorities was due to circumstances beyond their control.
Held
The Tribunal acknowledged that the assessee did not appear before the lower authorities due to reasons beyond their control. Considering the assessee's status as a charitable trust and the potential for expenses not being considered, the Tribunal decided that a fair chance to present their contentions was necessary.
Key Issues
Whether additions for cash deposits and denial of exemption were justified, and if the assessee should be granted a fresh opportunity to present their case due to non-appearance before lower authorities.
Sections Cited
147, 148, 144, 69A, 11
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “DB” BENCH, NAGPUR
Before: SHRI PAWAN SINGH, JM & SHRI KHETTRA MOHAN ROY, AM
“Ground 1. On the facts and circumstances of the case and the law, The learned CIT(A) erred in confirming the order of AO by F dismissing the appeal filed by the assessee.
Ground 2. On the facts and circumstance and the law, the learned CIT(A) erred in confirming the order of the AO even when the notice US 148 was issued by the jurisdictional officer in violation of Circular No 18/2022/F.No.370142/16/2022 dated 29-03-2022 and binding jurisdictional High Court decision in Hexaware and decision of Hon,ble Apex Court on the same issue.
Ground 3. On the facts and circumstance and the law, the learned CIT(A) erred in confirming the order of the AO even when the reopening notice is issued without following the due procedure of the law.
Ground 4. On the facts and circumstance and the law, the learned CIT(A) erred in confirming the order of the AO making addition to income of Rs 57,32,640 for cash deposit in bank us 69A of the Act even when the assessee is DEVSTHAN (PUBLIC CHARITABLE TRUST) and source of the cash is donations.
Ground 5. On the facts and circumstance and the law, the learned CIT(A) erred in confirming the order of the AO which has levied interest under the Act and initiated penalty proceedings.” raised the following grounds of appeal:
“Ground 1, On the facts and circumstances of the case and the law the learned commissioner of income tax a erred in deciding the appeal against the assessee
Ground 2, On the facts and circumstances and the law the learned commissioner of income tax a erred in in confirming the order assessing officer which has denied exemption under section 11 and taxed surplus of 5022943
Ground 3, On the facts and circumstances and the law the learned commissioner of income tax a erred in confirming the order assessing officer which has denied exemption under section 11 and taxed surplus of 5022943 on grounds of non–filing of return even when filing of return is not mandatory requirement for exemption under section 11 and such requirement came into effect from 01 04 2018 and was not applicable for assessment year 2017 18
Ground 4, On the facts and circumstances and the law the learned commissioner of income tax a erred in confirming the interest charged by the assessing officer
Ground 5, On the facts and circumstances and the law the learned Commissioner of Income Tax A erred in holding that i do not find any merit in the grounds of appeal raised by the appellant in the present In view of above order of assessing officer imposing penalty of `. 5022943 is confirmed even when no penalty is levied by the assessing officer
Ground 6, It is submitted that the noncompliance was because of facts like assessee is a trust at rural area there is no full time staff to look after tax affairs it is managed by the state appointed body the tax consultant who was looking after the affairs assured the assessee that affairs are being properly attended to assessee came to know of noncompliance and adversial order only when demand note is received along with appellate order”
3. The assessee has submitted a brief synopsis of the case which is reproduced as under:
“1. Assessee is a Religious Trust registered under 12A of Income Tax Act, 1961 and Bombay Public Trust Act.
Books of accounts of the Assessee are audited under Bombay Public Trust Act and under section 12A(b) of Income Tax Act, 1961.
For the above mentioned Assessment Year books of accounts were audited on 20/12/2015. Copy of Audited Financial Statement is attached herewith for your reference.
4. Form 108 (Audit report u/s 12A(b) under Income Tax Act, 1961) was prepared by the Auditor on 20/12/2015. Copy of Form 108 is attached herewith for your reference.
5. As Assessee has not filed Income Tax Return for the above mentioned Assessment Year hence Notice under section 148A was received to Assessee and as per the Notice Learned AO has specified the following information as per insight portal
a) Interest u/s 193 of Rs.41,360 b)Cash deposit of Rs.57,32,640 in Shikshak Sah Bank and Bank of Baroda
6. Assessee received Notice under section 148 of Income Tax Act, 1961 on 30/03/2022 to file Income Tax Return.
All the Notices of the Assessment proceedings were sent to the mail id and mobile number registered on the Income Tax Portal. Contact details reflected on portal were of Counsel of Assessee and the Counsel failed to communicate the same to the Assessee.
Due to this Assessee did not comply with the Notices received during Assessment proceedings.
8. Assessment Order under section 147 r.w.s 144 read with section 144B of Income Tax Act, 1961 was passed on 10/03/2023 and Learned AO has made addition of Rs.57,32,640 under section 69A
of Income Tax Act, 1961 and Rs.41,360 as interest earned on securities.
Assessee filed Appeal against the Assessment Order before CIT(A) on 24/08/2023.
CIT(A) Order was passed on 09/09/2025. As per Order Learned CIT(A) has confirmed the addition made by Learned AO.”
We find that there was non–appearance before the lower authorities due to circumstances beyond the control of the assessee.
The ld. AR fairly submitted that the matter may be restored back to the file of the Jurisdictional Assessing Officer where all necessary evidence will be filed. He harped on the fact that the assessee is a Charitable Trust and engaged in charitable activities and subsists of donation and grants. The entire cash deposit has been added even without deduction or expenses.
Keeping in mind only income is supposed to be taxed, the ld. AR submitted that at least the expenses incurred for administering the Trust may be considered as deduction.
We have given a very thoughtful consideration on the above submissions, the ld. CIT–DR protested that since the assessee has remained non–cooperative, the case will be dismissed outright, however the Tribunal being final fact finding authority cannot be oblivious to the fact that every assessee must be given fair chance to represent his contention and frivolous demand should not be thrust upon the assessee. Accordingly it is deemed fit to restore the matter back to the file of Jurisdictional Assessing Officer. Both the representatives fairly submitted that they have got no objection to the same.
ITA no. 685/Nag/2025 for A.Y. 2017–18
In result, both the appeals of assessee are allowed for statistical purposes.
Order pronounced in the open Court on 24/02/2026