PATEL SEVA SANGH,BOKARO STEEL CITY vs. ASSISTANT COMMISSIONER OF INCOME TAX (NATIONAL E-ASSESSMENT CENTRE), RANCHI

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ITA 486/RAN/2024Status: DisposedITAT Ranchi29 January 2026AY 2018-2019Bench: SHRI SONJOY SARMA (Judicial Member), SHRI RATNESH NANDAN SAHAY (Accountant Member)4 pages

AI SummaryRemanded

Facts

The assessee, a trust, failed to comply with notices issued by the Assessing Officer during a scrutiny assessment for AY 2018-19. Consequently, the assessment was made ex parte under Section 144, with an addition of ₹ 80,48,980/-. The CIT(A) dismissed the assessee's appeal for failing to substantiate its case.

Held

The Tribunal found that the assessee could not avail the opportunities to present its case before the lower authorities. Therefore, the matter was restored to the Assessing Officer for fresh adjudication, allowing the assessee a reasonable opportunity to be heard and provide supporting documents.

Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI

Before: SHRI SONJOY SARMA & SHRI RATNESH NANDAN SAHAY

For Respondent: Shri Khubchand T. Pandya, Sr.DR

Hearing: 13/11/2025Pronounced: 29/01/2026

Assessee represented by None Department represented by Shri Khubchand T. Pandya, Sr.DR Date of hearing 13/11/2025 Date of pronouncement 29/01/2026 O R D E R PER: RATNESH NANDAN SAHAY, A.M.

This appeal by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi/learned Commissioner of Income Tax (Appeals), [in short, the ld. CIT(A)] dated 14/10/2024 for the Assessment Year (AY) 2018-19. The assessee has raised following grounds of appeal: "1 That The Learned Commissioner of Income Tax. (Appeals) has erred in confirming the addition made by the Assessing Officer (AO) u/s 144 of Income Tax Act 1961, falling to consider the peculiar facts and circumstances surrounding the assessment for the Assessment Year 2018-19, which was the first year of implementation of the Faceless Assessment Scheme and there was technical glitches in Income Tax portal.

2. That Ld. Commissioner Appeal Tax erred in confirming addition made by The Learned Assessing Officer (AO) both in facts and in law in estimating the income of the Assessee at the rate of 20% of gross receipts without duly considering the nature and circumstances of the Assessee's operations. The estimation is arbitrary, excessive, and not in alignment with the principles governing charitable institutions.

3. That Ld. Commissioner Appeal has erred in confirming addition made by The Learned Assessing Officer (AO) has erred in law and on facts in estimating the income of the assessed at 20% of the gross receipts by arbitrarily relying on Income Patel Seva Sangh Vs ITO Tax Return (ITR) figures of previous years, which are pending adjudication before the appellate authorities. The estimation is excessive, lacks a factual basis, and has been made without jurisdiction.

4. That in the facts and circumstances of the case and in law, the Ld. Commissioner Appeal erred in confirming addition made by The Learned Assessing Officer (AO) by ignoring facts by making an addition without considering the genuine reasons for the Assessee's inability to respond to the notice. The notice was received during the unprecedented circumstances of the COVID-19 pandemic, coupled with internal disputes within the Society's Committee and a pending election, which significantly hampered the Assessee's ability to respond appropriately.

5. That the Assessee pleads to reply on all the foregoing grounds jointly and severally and further pleads to allow him raise such other grounds at my stage of appellate proceedings as may be pertinent to the cause of justice."

Facts of the case, in brief, are that the appellant is a Trust and its case was selected for complete scrutiny assessment on following two issues i.e. (i) Deductions from Income from other sources and (ii) refund Claim. Accordingly, the case was selected for scrutiny through Computer Assisted Scrutiny Selection (CASS). Statutory notices under Section 143(2) and 142(1) of the Income Tax Act, 1961 (in short, the Act) and various other questionnaires were issued to the assessee from time to time as per the details given on page No. 2 of the assessment order. However, the assessee made no compliance before the Assessing Officer and assessment was made under Section 144 of the Act being ex parte. In the impugned assessment order that the assessee-trust had a gross receipt of ₹ 4,02,44,881/- and expenditure was claimed at ₹ 4,04,97,537/- i.e. 100.62% of the gross receipts. However, the assessee failed to get its account audited as required under Section 44AB of the Act. The Assessing Officer, therefore, made addition of ₹ 80,48,980/- on estimate basis under Section 56 of the Act.

Patel Seva Sangh Vs ITO 3. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the ld. CIT(A), who vide the impugned order, dismissed the appeal of the assessee on the ground that the assessee failed to substantiate its case before the ld. CIT(A) despite given several opportunities of being heard.

Aggrieved by the order of ld. CIT(A), the present appeal has been filed by the assessee-trust before this Tribunal.

During the appellate proceedings before us, the assessee pleaded that due to Covid-19 pandemic coupled with the internal disputes within society committee and pending election which led to the assessee's non-compliance to the said notices and could not explain its case before the ld. CIT(A).

The ld. Sr.DR, on the other hand, supported the orders of the lower authorities.

We have considered the rival submissions and it is found that the assessee could not avail the opportunities to substantiate its case and thus, we think it proper to restore the issue back to the file of Assessing Officer for fresh adjudication after providing the reasonable opportunity of being heard to the assessee-trust. The assessee is also directed to provide all the supporting documents to substantiate its case before the Assessing Officer.

In the result, this appeal of the assessee is allowed for statistical purposes only. Order Pronounced in open court on 29th January, 2026