AUDYOGIK SHIKSHAN PRASARAK MANDAL,NASHIK vs. ITO (EXEMPTION) - 1(1), , NASHIK

Assessment Year: 2018-19 Audyogik Shikshan Prasarak Mandal, Vs The Income Tax Officer Annasaheb Vaishampayan Vidyalaya, (Exemption)-1(1), Nashik Mahatma Nagar, Satpur, Nashik-422007 PAN : AAATA8178P Appellant/ Assessee Respondent / Revenue Assessee by Shri Sanket M. Joshi Revenue by Shri Ramnath P. Murkunde Date of hearing 26/08/2024 Date of pronouncement 28/08/2024 आदेश/ ORDER

PER DR. DIPAK P. RIPOTE, AM:

“1] The learned CIT(A) erred in confirming the action of the ADIT, CPC, Bangalore of assessing the entire gross receipts of Rs.72,33,362 declared by the appellant trust as total income for AY. 2018-19 by disallowing the entire expenditure of Rs.70,95,448 and by denying the exemption u/s 11 on the surplus of Rs.l,37,914 merely on the ground that the Audit Report in Form No.10B was filed after the due date of filing return u/s 139(1) without appreciating that the said action of the A.O. was beyond the scope of permissible adjustments u/s 143(1) of the Act. 2] The learned CIT(A) failed to appreciate that the condition of filing of audit report in Form 10B was directory in nature and therefore, the said delay could not have resulted into denial of exemption u/s 11 in view of the law laid down by various Hon'ble Courts and thus, the disallowance u/s 11 made on the above debatable issue, was outside the scope of permissible adjustments u/s 143(1) of the Act. 3] Without prejudice, the appellant submits that there was a reasonable cause due to which there was delay in filing audit report in Form 10B and the said delay may please be condoned by Hon'ble ITAT in view of the wide powers vested with Hon'ble Tribunal to do justice and thereby, the income of the appellant may be assessed at Rs. Nil after allowing exemption u/s 11. 4] Without prejudice, assuming without admitting that the exemption u/s 11 is not allowable to the appellant, still it is not submitted that the gross receipts of Rs.72,33,362 could not have been taxed as income and only net surplus of Rs.1,37,914 may be taxed as income in the hands of the appellant trust. 5] The appellant craves, leave to add, alter, amend and delete any of the above grounds of appeal

.” Submission of ld. Authorized Representative (ld.AR) :

3. The ld. Authorized Representative (ld.AR) for the Assessee submitted that assessee’s appeal was dismissed by the ld. CIT(A) without discussing each and every ground and merits of the case and merely dismissed for non-compliance. Hence, ld. AR requested for one more opportunity of being heard to the assessee.

Submission of ld. Departmental Representative (ld. DR) : 4. The ld. DR for the Revenue relied on the order of Assessing Officer (AO) and ld.CIT(A). Findings & Analysis : 5. We have heard both the parties and perused the records. It is observed from the order of the ld. CIT(A) that the ld. CIT(A) did not decide the grounds of appeal on merit but merely dismissed the appeal of the assessee for non-compliance. The ld. CIT(A) has not adjudicated grounds raised by the assessee on merits. 5.1 The Hon’ble Bombay High Court has held in the case of Pr. CIT (Central) Vs. Premkumar Arjundas Luthra (HUF) (Bombay) / [2017] 297 CTR 614 (Bombay) as under : Quote, “8.From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act.

Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then 3 render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn.

Therefore, it would be noticed that the powers of the CIT(A) is coterminous with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non- prosecution as is evident from the provisions of the Act.” Unquote.

Order pronounced in the open Court on 28th August, 2024.