PIMPRI CHINCHWAD EDUCATION TRUST,PUNE vs. DY CIT EXEMPTIONS PUNE, PUNE

PER RAMA KANTA PANDA, V.P. :

This appeal filed by the assessee is directed against

the order of the learned CIT(A)-NFAC, Delhi, dated 10.07.2024,

relating to the assessment year 2018-2019.

the assessee, however, these all relate to the ex-parte order of

the Ld. CIT(A) in confirming the order of the Assessing Officer

in determining the total income of the assessee at

Rs.10,93,82,290/- as against the NIL returned income.

Trust registered under the provisions of Indian Trust Act,

1882 and also registered u/sec.12A of the Income Tax Act,

2 ITA.No.1880/PUN./2024

1961 [in short “the Act”]. It filed it’s return of income on

24.09.2018 declaring NIL income. The case was selected for

complete scrutiny on the following issue :

“Approval u/s.80G and Receipt of Voluntary Contributions.”

3.1. During the course of assessment proceedings, the

Assessing Officer observed that assessee claimed revenue

expenditure of Rs.73,58,73,844/-. He noticed that the

assessee has claimed depreciation amounting to

Rs.7,39,98,513/-, which according to the Assessing Officer, is

not an allowable deduction u/sec.11(6) of the Act. While doing

so, he noted that assessee is not entitled to claim depreciation

against capital expenditure which was treated as application

of income towards objects of the Trust. If the capital

expenditure is made out of the income from property held

under Trust or the donations and other income received

during the year, the claim of depreciation on the said assets

will result into double benefit to the assessee. While holding

so, he relied on the decision of Hon’ble Supreme Court in the

case of Escorts Ltd., vs. Union of India [1993] 199 ITR 43 (SC)

and various other decisions.

3.2. The Assessing Officer also modified the income due

to not incurring 85% of the expenditure of total receipts and

accordingly determined the total income of the assessee at

3 ITA.No.1880/PUN./2024

Rs.10,93,82,290/- as against the returned income at NIL on

account of the following two additions :

a) Disallowance of depreciation at Rs.7,39,98,530/-;

b) Modification of the income due to not incurring 85% of

the total receipts of Rs.3,53,83,776/-.

3.3. Since the assessee did not appear before the Ld.

CIT(A) despite number of opportunities granted, the Ld. CIT(A)

passed the impugned ex-parte order for want of prosecution.

the assessee is in appeal before the Tribunal.

4.1. The learned Counsel for the Assessee, at the very

outset submitted that adequate opportunity was not granted

by the Ld. CIT(A). Further the Ld. CIT(A) has not decided the

issue as per the provisions of sec.250(6) of the Act which he

was supposed to do and he has simply dismissed the appeal

for want of prosecution. Therefore, the learned Counsel for

the Assessee submitted that he has no objection if the matter

is restored to the file of Ld. CIT(A) for adjudication of the issue

afresh, after giving due opportunity to the assessee.

order of the Ld. CIT(A).

4 ITA.No.1880/PUN./2024

Officer determined the total income of the assessee at

Rs.10,98,82,290/- as against ‘NIL’ returned income by making

two additions namely disallowance of depreciation on assets,

the cost of which, were claimed as ‘application of income’ at

Rs.7,39,98,513/- and modification of income to the extent of

Rs.3,53,83,777/- on account of not incurring 85% of the

expenditure on the total receipts. Since the assessee did not

appear before the Ld. CIT(A), he passed the impugned ex-parte

order for want of prosecution. It is the submission of the

Learned counsel for the Assessee that adequate opportunity

was not granted and the Ld. CIT(A) has dismissed the appeal

for want of prosecution but has not decided the appeal on

merits as contemplated u/sec.250(6) of the Act. We find merit

in the above arguments advanced by the Learned counsel for

the Assessee. As per the provisions of sec.250(6) of the Act, the

order of the Ld. CIT(A) disposing of the appeal shall be in

writing and shall state the points for determination; the

decision thereon and the reasons for the decision. However,

the Ld. CIT(A) in the instant case has not decided the appeal

on merits, but, has simply dismissed the appeal for want of

prosecution. Further a perusal of the order of the Ld. CIT(A)

shows that although he has mentioned that multiple

opportunities were granted to the assessee, however, the order

is silent as to how many opportunities were granted.

5 ITA.No.1880/PUN./2024

Considering the totality of the facts of the case and in the

interest of justice, we deem it proper to restore the matter

back to the file of Ld. CIT(A) with a direction to grant one more

opportunity to the assessee to substantiate it’s case and

decide the appeal as per fact and law by passing a speaking

order. The assessee is also hereby directed to make it’s

submissions, if any, before the Ld. CIT(A) on the appointed

date without seeking any adjournment under any pretext,

failing which, the Ld. CIT(A) is at liberty to pass appropriate

order as per law. We hold and direct accordingly. The grounds

raised by the assessee are accordingly allowed for statistical

purposes.

statistical purposes.

Order pronounced in the open Court on 29.11.2024.

Sd/- Sd/- [MS. ASTHA CHANDRA] [RAMA KANTA PANDA] JUDICIAL MEMBER VICE PRESIDENT Pune, Dated 29th November, 2024 VBP/- Copy to 1. The appellant 2. The respondent 3. The Pr. CIT, Pune concerned 4. D.R. ITAT, “B” Bench, Pune. 5. Guard File. //By Order// //True Copy //

Sr. Private Secretary, ITAT, Pune Benches, Pune.