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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
This appeal by the assesse is directed against the order dated 19.04.2023 of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centers,(NFAC) Delhi for A.Y.2016-17.
There is a delay of 18 days in filing the present appeal. The assessee has filed an application for condonation of delay alongwith the affidavit of the counsel of the assessee to explain the cause of delay. The Ld. AR of the assessee has submitted that the delay in ITANo.257/Ind/2023 Shriram Nanda Education and Welfare Society filing the present appeal is due to inadvertent and bona fide mistake on his part while computing the limitation of filing the appeal. He has pointed out that after receiving the impugned order and instructions from the assessee to file the appeal he has inadvertently noted the date of impugned order as 19.05.2023 instead of 19.04.2023 and therefore the last date of filing of appeal is miscalculated as 19.07.2023 instead of 19.06.2023. Thus the Ld. AR has submitted that due to his inadvertent and bona fide mistake in noting down the date of impugned order the present appeal was filed belatedly of 18 days. Hence he has pleaded that the delay of 18 days in filing the present appeal may be condoned and the appeal of the assessee may be admitted for adjudication on merits. On the other hand, Ld. DR has not seriously objected to the condonation of delay. rival submissions of the Ld. AR as well as Ld. DR and careful perusal of the contents of the affidavit we are satisfied that the assessee has explained a sufficient cause for delay of 18 days in filing the present appeal, accordingly the same is condoned.
The assesse has raised following grounds of appeal:
1. That, the learned CIT(A) grossly erred, both on facts and in law, in passing the ex-parte order without giving proper and effective opportunity of being heard to the appellant.
2. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO in making various additions aggregating to a sum of Rs.3,57,25,558/- in the appellant's income by framing an Assessment Order under s.143(3) of the Income- Tax Act, 1961, without affording proper opportunity of being heard to the appellant and without even issuing show cause notice before ITANo.257/Ind/2023 Shriram Nanda Education and Welfare Society making such additions, which is quite illegal, bad- in-law and void-ab- initio.
3. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the ld. AO in disallowing the claim of exemption under ss.11 & 12 of the Act by invoking the provisions of section 13 of the Act without even issuing show cause to the appellant and without affording proper opportunity of being heard, which is unjust, unfair and bad-in-law. 4 That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.6,00,000/- made by the ld. AO on account of disallowance of salary out of total salary of Rs. 12,00,000/- paid to Shri Alok Nanda without considering and appreciating the material fact that the appellant society has not made any payment of salary to Shri Alok Nanda.
5. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the ld. AO for disallowing a sum of Rs.2,87,95,838/- out of total lease rent of Rs.3,43,95,838/- paid by the appellant society.
6. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the Id. AO for disallowing a sum of Rs. 12,00,000/- on account of salary paid to hostel staff.
7. That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.51,29,720/- made by the ld. AO, by making an ad-hoc disallowance of 50% of total expenditure of Rs. 1,02,59,441/-claimed to have been incurred by the appellant society towards Oil & Fuel at Rs.75,93,872/- and Bus Repairs & Maintenance at Rs.26,65,569/-.
8. That, without prejudice to the above, on the facts and in the circumstances of the case, the learned CIT(A) grossly erred in making an enhancement of Rs.1,87,57,086/- in the appellant's income, under the provisions of section 251(2) of the Act, by rejecting the claim of the appellant society as regard to exemption of income u/s. 10(23C)(vi) as well as ss. 11 & 12 of the Act.
9. That, without prejudice to the above, on the facts and in the circumstances of the case, the learned CIT(A) grossly erred in initiating the penalty proceedings under s.270A(9) of the Act against the appellant society on the enhancement of income of Rs.1,87,57,086/-.
That, the appellant further craves leave to add, alter or amend the foregoing ground of appeal as and when considered necessary.
ITANo.257/Ind/2023 Shriram Nanda Education and Welfare Society 5. At the time of hearing the Ld. AR of the assessee has submitted that CIT(A) has passed the impugned order ex-parte after refusing the adjournment sought by the assessee. He has referred to the details of the notices issued by CIT(A) and the request of adjournment made by the assessee which was not allowed by the CIT(A) and consequently the impugned order was passed ex-parte. The Ld. AR has submitted that CIT(A) has also enhanced the assessment by denying the exemption u/s 10(23C)(vi) which was allowed by the A.O. A request for adjournment was made by the Ld. AR of the assessee before CIT(A) as he was preoccupied in time barring assessments as well as expiry of audit limitation but the Assessing Officer as well as CIT(A) have passed the orders for want of necessary explanation and supporting evidence. He has pleaded that the matter may be remanded to the record of CIT(A) for fresh adjudication after giving one more opportunity to the assessee.
On the other hand Ld. DR has submitted that CIT(A) has given more than sufficient opportunities to the assessee but the assessee failed to comply with various notices issued by CIT(A). Ld. DR has pointed out that initially there was no response or compliance on behalf of the assessee to the three notices issued by CIT(A) and thereafter assessee has sent the request for adjournment after the date of hearing fixed by the CIT(A). Thus the assessee did not comply to any of the notices issued by CIT(A) and even the request for adjournment was made much after the date of compliance fixed by CIT(A). Thus Ld. DR has submitted that it is a case of gross negligent conduct on the part of the assessee in response to the Page 4 of 9
ITANo.257/Ind/2023 Shriram Nanda Education and Welfare Society various notices issued by CIT(A). She has relied upon the impugned orders of CIT(A).
We have considered the rival submissions and carefully perused the impugned order of CIT(A). The CIT(A) has given the details of the notices issued to the assessee in para 4 as under:
“4. PRESENT APPELLATE PROCEEDINGS After the appeal of the assessee was transferred to National Faceless Appellate Centre, various notices u/s 250, were issued to the assessee. Following are the details of the dates of notice issued and their DIN Numbers alongwith the details of compliance, fixed. Date of issue DIN Number Date of compliance 26-12-2020 ITBA/NFAC/F/APL- 10.01.2021 1/2020- 21/1029255303(1) 04.04.2021 ITBA/NFAC/F/APL- 19.042021 1/2021- 22/1032183895(1) 16.08.2021 ITBA/NFAC/F/APL- 31.08..2021 1/2021- 22/1034898796(1) 19.09.2022 ITBA/NFAC/F/APL- 24.09.2022 1/2022- 23/1045330168(1) 04.01.2023 ITBA/NFAC/F/APL- 11.01.2023 1/2022- 23/1048455022(1) As per email delivery report available on the faceless ITBA module, was observed that all the above notices were duly delivered on the registered email id of the assessee on the same date on which these notices were issued on each different date. However no compliance, whatsoever, was received from the assesses in respect of any of the above-stated first three notices, neither any written submissions were uploaded, nor any request for adjournment was filed. However in response to the fourth notice issued on 08-09-2022, which was to be complied by 24-00-2022, the adjournment application was filed on 30-09-2022 requesting to grant time due to following reasons. Respected Sir The AR is busy with Tax Audit time burred work and hence the appeal could not be prepared. Kindly grant the adjournment. Regards On 02-11-2022, another communication opportunity was provided to the assessee, by opening a communication window. As per small delivery Page 5 of 9
ITANo.257/Ind/2023 Shriram Nanda Education and Welfare Society report, the said communication was duly delivered to the assessed on same data. However the assessee failed to avail the benefit of that opportunity also. Neither any written submissions were uploaded, nor any request for adjournment was filed. Still, one more opportunity was provided to the assessee by issuing notices u/s 250 on 04-01-2023, to be complied by 11-01-2023. As per email delivery report, the said notice was duly delivered to the assessee on same date le on 04-01-2023. However, on this occasion, a request for adjournment was filed, that too not within the stipulated time limit but after the time limit had been expired, and was filed on 12-01- 2023. In this manner, in respect of the any of the notices issued as stated above, no written submissions have been uploaded by the assessee. It is therefore concluded that assessee has no submissions to make, in order to support the Grounds of appeal raised by him. However, even after considering that assessee has not complied with any of the notices, the appeal proceedings are finalised based upon the material facts available on record and accordingly appeal is disposed off on merits.” Thus it is clear that initially three notices were issued on 26.12.2020, 04.04.2021 and 16.08.2021 and there was no response on behalf of the assessee. Thereafter the notice dated 09.09.2022 was issued by CIT(A) for fixing the date of compliance on 24.09.2022 however, the assessee filed an application for adjournment only on 30.09.2022 after one week of the date of compliance. The CIT(A) then sent an e-mail on 02.11.2022 for providing another opportunity of compliance and submitting written submissions as well as other details in support of the claim however, there was no response on behalf of the assessee to the said e-mail. Thereafter the CIT(A) has issued a notice on 04.01.2023 and fixed the compliance date on 11.01.2023, however, the assessee has filed an application for adjournment on 12.01.2023. Thus it is clear that the adjournment applications were filed after the expiry of the compliance dates. The CIT(A) then
ITANo.257/Ind/2023 Shriram Nanda Education and Welfare Society proposed to enhance the assessment by issuing a show cause notice in para 17 to 17.3 as under:
“17. ENHANCEMENT OF ASSESSED INCOME: 17.1. On 08-02-2023, a notice u/s 250 was issued, vide DIN number "ITBA/NFAC/F/APL_1/2022-23/1049565678(1)", proposing to enhance the income the assessee. As per ITBA faceless appeal system, the said enhancement notice was duly delivered to the assessee on the very next day i.e. on 09-02-2023. The following communication was sent to the assessee alongwith with the notice u/s 250, which was required to be complied by 15-02-2023 In the assessment order, the AO has allowed your claim of exemption us 10(23C)(vi), for which you have mentioned in the SOF filed alongwith Form 35 that you had filed the return showing income of Rs. NIL after claiming exemption both u/s 10(23C)(vi) as well as u/s 11 and 12 of the Act, however in the assessment, the AO has allowed you the exemption only u/s 10(23C)(vi) of the Act but disallowed your claim of exemption u/s 11 and 12 of the Act by invoking the provisions of section 13. The present appeal has been filed by you against AO's action of disallowing your claim of exemption u/s 11 and 12 of the Act by invoking the provisions of section 13. Accordingly, in the past, you have been issued several notices u/s 250, however you have not filed any written submission. You are now given a show cause to explain why your claim of exemption both u/s 10(23C)(vi) as well as u/s 11 and 12 of the Act should not be rejected. Your income is accordingly proposed to be enhanced by an amount of Rs. 1,87,57,086/- by withdrawing your claim of exemption u/s 10(23C)(vi) allowed by AO in the assessment order. You may submit your response latest by 15-02-2023, failing which the action, as proposed above, will be taken. 17.2. However, in response to the above enhancement notice, which was to be complied by 15-02-2023, only a request for adjournment was filed, that too not within the stipulated time but after the expiry of time limit, and was filed on 20- 02-2023. 17.3. It is further noted that even till date, the assessee has not filed any response or submissions to the above enhancement notice.”
Therefore, even the show cause notice issued by CIT(A) for enhancement of the assessment was not responded by the assessee within the period of compliance which was fixed on 15.02.2023 and ITANo.257/Ind/2023 Shriram Nanda Education and Welfare Society the assessee has made a request for adjournment on 20.02.2023. All these facts clearly manifest the negligence and careless conduct on the part of the assessee as well as the authorized representative of the assessee before the CIT(A). Since the order has been passed ex-parte by the CIT(A) and also enhanced the assessment without considering the submissions of the assessee therefore, in the facts and circumstances of the case and in the interest of the justice we grant one more opportunity to the assessee to present its case before the CIT(A) subject to cost of Rs.10,000/- to be paid to Prime Minister Relief Fund. Accordingly the impugned order of CIT(A) is set aside and the matter is remanded to the record of CIT(A) for fresh adjudication after giving one more opportunity to the assessee.
In the result appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 03.07.2024.