MAHARASHTRA SWAYAMROJGAR PRASHIKSHAN MANDAL,NASHIK, MAHARASHTRA vs. ITO (EXEMPTION), WARD-1, NASHIK, NASHIK

This is an appeal filed by the appellant Trust directed against the order of National Faceless Appeal Centre (NFAC), Delhi dated 13.04.2023 for the assessment year 2015-16.

Brief facts of the case are as under : The appellant is a Trust registered under the Societies Registration Act, 1960. The appellant Trust undertakes vocational training programme for men and women in Tribal areas for which the grants are received from the Govt. of Maharashtra. The Return of Income for the A.Y. 2015-16 was filed on 28.03.2017 declaring total income at Nil. Return was processed u/s.143(1) of the Act on 13.09.2017. Subsequently, the case was selected for scrutiny under CASS and notice u/s.143(2) along with questionnaire was issued to the appellant to which the appellant furnished requisite details. On verification of the information, the Assessing Officer noticed that the appellant made payments to various parties amounting to Rs.31,59,312/-, in excess of Rs.20,000/- which are in contravention to the provisions of section 40A(3) of the Act. The details of the payments have been detailed on page 2 and 3 of the assessment order. The appellant was called upon to explain as to why the same should not be disallowed under the provisions of section 40A(3) of the Act. The appellant tendered the explanation which was not found to be acceptable to the AO. Eventually, the AO vide order dated 27.12.2017 passed u/s.143(3) disallowed 31,59,312/- invoking the provisions of section 40A(3) of the Act.

Being aggrieved by the above assessment, an appeal was filed before the CIT(A)/NFAC who vide impugned order dismissed the appeal in limine for non prosecution, without discussing anything on merits of the disallowance.

Being aggrieved, the appellant is in appeal before the Tribunal in the present appeal.

When the appeal was called on, none appeared on behalf of the appellant trust despite due service of notice of hearing. I therefore proceed to dispose of the appeal ex parte after hearing the ld. Departmental Representative.

I heard the ld. Sr. DR and perused the material on record. It is an admitted position that the NFAC had dismissed the appeal of the appellant in limine for non-prosecution. Further, it is a trite law that the NFAC should have dealt with the merits of the issue in appeal, even in the case of ex-parte order. From the perusal of para 7.5 of the impugned order, it would reveal that the NFAC had not gone into the merits of the issue in appeal, merely dismissed the appeal for non- prosecution, which is contrary to the settled position of law. In this regard, reference is being made to a decision of the Hon’ble Bombay High Court in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) Bombay)/[2017] 297 CTR 614 (Bombay) wherein it was held that CIT(A) is obliged to dispose of the appeal on merits. Therefore, I deem it proper to remit the matter to the file of CIT(A)/NFAC for de novo disposal of the issue in appeal on merits afresh after allowing reasonable opportunity to the appellant, in accordance with law. I order accordingly.

In the result, the appeal filed by the appellant trust stands partly allowed for statistical purposes.