KUTCHI SARVODAYA NAGAR,MUMBAI vs. INCOME TAX OFFICER (EXEMPTIONS) - 1(4), MUMBAI

P a g e | 1 ITA No.4127/Mum/2023 Kutchi Sarvodaya Nagar Vs. ITO (Exemption) -1(4) IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER & SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No.4127/Mum/2023 (A.Y. 2014-15) Kutchi Sarvodaya Nagar Vs. Income Tax Officer P.L. Lokhande Marg, (Exemptions)-1(4) Near Narayan Guru High Piramal Chambers, School, Govandi, Lal Baug, Parel, Mumbai – 400043 Mumbai - 400012 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAATK0678E Appellant .. Respondent Appellant by : Pradip Kapasi Respondent by : P.D. Chougule Date of Hearing 22.04.2024 Date of Pronouncement 03.05.2024 आदेश / O R D E R Per Amarjit Singh (AM): This appeal filed by the assessee is directed against the order passed by the ld. CIT(A) NFAC for A.Y. 2014-15. The assessee has raised the following grounds before us: “I. GROUND NO. 1: FAILURE TO ISSUE NOTICE U/S. 250 The Id. CIT(A) erred in law and on facts in failing to issue notice for furnishing written submissions and/or hearing of appeal as required u/s 250(1), (2) and (6B) read with the Faceless Appeal Scheme, 2021 issued under Notification No 139/2021 dt 28.12.2021 of the Act and in particular not allowing the appellant to furnish its submissions. Your appellant prays that an order passed without issuing notice u/s. 250 be quashed II GROUND NO. 2: FAILURE TO GIVE OPPORTUNITY OF HEARING BY CIT(A) The Id. CIT(A) erred in law and on facts in passing an order in appeal without giving an opportunity of hearing, orally or virtually, as required by the provisions of the Act. Rules, Scheme, Notifications and Circulars and the decisions of the Courts and in particular the decision in the cases of BA Continuum India (P.) Ltd., 125 taxmann.com 180 (Bom.) and Sanjay Aggarwal, 127 taxmann.com

P a g e | 2 ITA No.4127/Mum/2023 Kutchi Sarvodaya Nagar Vs. ITO (Exemption) -1(4) 637 (Delhi) Your appellant prays that such an order passed in violation of the provisions of the Act and the Natural Justice be quashed. III. GROUND NO. 3: FAILURE TO GIVE OPPORTUNITY OF HEARING BY AO The Id. CIT(A) erred in law and on facts in in confirming the action of the AO of passing an order of rectification dt. 04.03.2021 u/s. 154 of the Act without affording any opportunity of hearing to the appellant Trust Your appellant prays that rectification order passed by the AO without affording opportunity of hearing be quashed. IV. GROUND NO. 4: PASSING AN EX-PARTE ORDER WITHOUT APPLICATION OF MIND The Id. CIT(A) erred in law and on facts in in confirming the action of the AO of passing an order dt. 04.03 2021 u/s 154 of the Act in the nature of an ex-parte order and further erred in passing an order dt. 21.09.2023 u/s 250, which is again in the nature of an ex-parte order, without appreciating the case of appellant. V. GROUND NO. 5: INVALID RECTIFICATION U/S 154 OF AN ORDER OF ASSESSMENT PASSED U/S 143(3) The Id. CIT(A) erred in law and on facts in confirming the order of rectification dt. 04.03.2021 passed by the AO u/s 154 in violation of provisions of s. 154 in as much as the order of assessment dt 28 12 2016 passed u/s 143(3) did not suffer from any mistakes of law and facts that were apparent on the face of the said assessment order and in spite of the fact that appeal filed u/s. 246A on 01.02.2017 before CIT(A) against the main order dt. 28.12.2016 passed u/s. 143(3) under Acknowledgement No. 608794081010217 (Appeal No. CIT(A) 1, MUMBAI / 10937/2016-17) was pending for disposal Your appellant strongly submits that there was no error or mistake in order of assessment which was apparent on records. Your appellant pleads that the impugned order passed u/s 154 be quashed and declared bad in law VI. GROUND NO. 6: LEVY OF SURCHARGE OF RS. 5,66,308/- The Id. CIT(A) erred in law in and on facts in confirming the action of the AO in levying surcharge on the gross tax liability under an order of rectification u/s 154 dt 04.03.2021 for amending the assessment order u/s 143(3) dt. 28.12.2016. Your appellant submits that the surcharge was not payable by the assessee charitable trust. Your appellant pleads that the levy of surcharge be deleted. VII. GROUND NO. 7: LEVY OF INTEREST U/S. 234A OF RS. 1,09,736/- AND U/S. 234B OF RS. 46,08,912/- The Ld. CIT(A) erred in law and on facts in confirming the action of the AO of levying interest u/s 234A of Rs.1,09,736/- and u/s. 234B of RS. 46,08.912/- in rectification proceedings. Your appellants denies any liability to payment of interest and also submits that no interest u/s 234A and 234B for the period post assessment u/s 143(3) could have been revised as per provisions of the Act, the interest was charged in violation of the provisions of the natural justice in as much as no opportunity for hearing was given and no speaking order was passed by AO for levy of interest for post assessment period. Your appellants prays that the interest so levied should be deleted.

P a g e | 3 ITA No.4127/Mum/2023 Kutchi Sarvodaya Nagar Vs. ITO (Exemption) -1(4) VIII. Your appellant craves for leave to add, alter or to modify any of the foregoing grounds of appeal if required. All the above grounds are independent and without prejudice to each other.” 2. Fact in brief is that the return declaring total deficit of Rs.15,52,93,480/- was filed on 22.11.2014. The assessee is registered under the Societies Registration Act 1860 and also registered with the Director of Income Tax Exemption, Mumbai u/s 12A of the Income Tax Act, 1961. The assessment u/s 143(3) of the Act was finalised in the case of the assessee on 28.12.2016 assessing the total income at Rs.1,94,43,601/- after denying the claim of exemption u/s 11 of the Income Tax Act 1961. 3. Afterwards the assessing officer issued notice to the assessee proposing rectification on the ground that surcharge @ 10% was not levied by the system as the assessed income was more than Rs.1 crores during the year under consideration. The assessing officer stated that till passing of rectification order u/s 154 of the Act on 04.03.2021 the assessee has not filed any submission. Accordingly, the assessing officer has levied surcharge @ 10% vide the aforesaid rectification order passed u/s 154 of the Act on 04.03.2021. 4. The assessee carried the matter before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee reiterating the findings of the AO that assessee had not responded to the notices issued for hearing. 5. During the course of appellate proceedings before us the at the outset the ld. Counsel submitted that vide letter dated 28.09.2020 the assessee has replied to the notices issued by the assessing officer for proposing the rectification which was neither considered by the assessing officer nor by the ld. CIT(A). The ld. Counsel further submitted that during the course of appellate proceeding before the ld. CIT(A) the

P a g e | 4 ITA No.4127/Mum/2023 Kutchi Sarvodaya Nagar Vs. ITO (Exemption) -1(4) assessee has made detailed submission as placed at page no. 15 to 38 of the paper book, however, the ld. CIT(A) has dismissed the appeal of the assessee without considering the submission made before the ld. CIT(A). Therefore, ld. Counsel submitted that the appeal of the assessee was not adjudicated on merit by the ld. CIT(A). The ld. Counsel also submitted that assessee trust had requested for an opportunity of physical or virtual hearing multiple time vide its submission before the CIT(A) which was not responded. On the other hand, the ld. D.R. supported the order of lower authorities. 6. Heard both the sides and perused the material on record. Without reiterating the fact as elaborated above the assessing officer has rectified the assessment order passed u/s 143(3) of the Act after levying surcharge @ 10% and stated that till the passing of the rectification order u/s 154 of the Act, the assessee has not filed any submission in this regard. Similarly, the ld. CIT(A) has dismissed the appeal of the assessee reiterating the fact stated by the assessing officer. However, after hearing both the parties and perusal of material placed in the paper book furnished before us during the course of appellate proceedings it is noticed that assessee has placed copies of reply filed before the assessing officer in response to the notice issued for rectification as discussed supra in this order. Further we have noticed that assessee has filed detailed submission before the ld. CIT(A) as placed at page no. 15 to 35 of the paper book relating to the rectification proposed by the assessing officer u/s 154 of the Act. The assessee has demonstrated from the material placed on record that the ld. CIT(A) has not adjudicated the appeal of the assessee on merit after considering the submission filed by the assessee. Section 250(6) contemplates that ld. CIT(A) would determine point in dispute and therefore record reason of such points in support of his conclusion. Therefore, we restore this

P a g e | 5 ITA No.4127/Mum/2023 Kutchi Sarvodaya Nagar Vs. ITO (Exemption) -1(4) issue in appeal back to the file of the ld. CIT(A) for adjudicating on merit as contemplate u/s 250(6) of the Act after considering the submission filed by the assessee and needless to say that the request of the assessee for opportunity of physical or virtual hearing be considered on merit. Accordingly, the appeal of the assessee is allowed for statistical purposes. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 03.05.2024 Sd/- Sd/- (Sandeep Singh Karhail) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 03.05.2024 Rohit: PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीिीय अतिकरण/ ITAT, Bench, Mumbai.