HOINA HOMES OF THE INDIAN NATION,VIZAINAGARAM vs. INCOME TAX OFFICER(EXEMPTION WARD), VISAKHAPATNAM

1. This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi in DIN & Order No. ITBA/NFAC/S/250/2023-24/1057494316(1) dated 30.10.2023, arising out of order passed u/s 154 of the Income Tax Act, 1961 (in short ‘Act’) dated 02.02.2023 for the Assessment Year (A.Y.) 2021-22. Hoina Homes of the Indian Nation,Vizianagaram

Brief facts of the case are that the assessee society filed it’s return of income voluntarily, admitting ‘nil’ income for the A.Y.2021-22 by claiming exemption u/s 11 of the Act. The return was processed by the Central Processing Center (CPC) u/s 143(1) of the Act and the exemption claimed u/s 11 of the Act was not allowed by the Ld.CPC and has been brought to tax, resulting in a demand of Rs.5,96,280/-.

On being aggrieved, the assessee society preferred an appeal before the CIT(A) and the Ld.CIT(A) upheld the disallowance made by the Ld.CPC and dismissed the appeal of the assessee.

On being aggrieved, the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :

The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case.

The learned Commissioner of Income Tax (Appeals) ought to have held that the addition of Rs.23,95,154 made towards disallowance of exemption claimed u/s 11 of the Act is outside the scope of adjustments that can be made in the intimation u/s 143(1) of the Act and hence the assessing officer is not justified in rejecting the petition for rectification filed u/s 154 of the Act. 3. Without prejudice to the above, the learned Commissioner of Income Tax (Appeals) ought to have directed the assessing officer to allow the exemption of Rs.23,95,154 claimed by the appellant u/s 11 of the Act.

Per contra, the Ld.DR relied on the order of the Ld.CIT(A) and submitted that the assessee has made an incorrect claim by filing Form No.10 beyond the due date. Hence, the Ld.CIT(A) is justified in upholding the action of the Ld.CPC by dismissing the appeal by passing detailed order. She pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal of the assessee.

I have heard both the parties and perused the material placed on record. It is an undisputed fact that the assessee is a society, registered u/s 12A of the Act is eligible to claim exemption u/s 11 of the Act. The Ld.AR pleaded before me that the adjustment made in the intimation by denying exemption of accumulated income of Rs.23,95,154/- is not at all warranted and such adjustment is not within the purview of the said section. The Ld.AR filed paper book before me and submitted that the assessee has all material evidences in support of it’s claim. He pleaded for an opportunity of being heard to substantiate it’s claim before the Ld.CIT(A). In view of the foregoing facts and circumstances of the case and keeping in view the principles of natural justice, I am inclined to set aside the order passed by the Ld.CIT(A) and remit the matter back to the file of the Ld.CIT(A) to afford an opportunity of being heard to the assessee before the Ld.CIT(A). The assessee is also directed to adhere to Hoina Homes of the Indian Nation,Vizianagaram the notices issued by the department and cooperate with the proceedings of the revenue authorities. Accordingly, the grounds raised by the assessee are allowed for statistical purpose.

In the result, appeal of the assessee is allowed for statistical purpose.