ITO, DINDIGUL vs. CHRISTIAN EDUCATIONAL AND SOCIAL DEVELOPMENT TRUST, ODDANCHATRAM

All these three appeals have been filed by the Revenue challenging the orders passed by the Ld. Commissioner of Income Tax (Appeals)-II, Madurai and they relate to the assessment years 2006-07, 2007-08 and 2008-09.

None appeared on behalf of the assessee despite service of notice and hence, we proceeded to dispose these appeals ex parte without the presence of the assessee.

We heard Ld. D.R. and perused the record. We notice that the assessments of the years under consideration have been reopened by the Assessing Officer by issuing notice under Section 148 of the Income-tax Act, 1961 (in short 'the Act'). In the reopened assessments, the A.O. has noticed that the assessee did not have registration under Section 12A of the Act. Hence, the Assessing Officer did not allow exemption under Section 11 of the Act and accordingly, assessed the income of the assessee.

In the appeals filed before the Ld. CIT(Appeals), the assessee raised an alternative contention that its income is exempted under Section 10(23C)(iiiad) of the Act. The Ld. CIT(Appeals) without conducting any examination, accepted the said submissions and accordingly, allowed the appeals filed by the assessee.

Before us, Ld. D.R. pointed out that the alternative claim made by the assessee requires examination and hence the Ld. CIT(Appeals) has violated Rule 46A of the Income-tax Rules, 1962 in entertaining the alternative plea and in non-confronting the same to the Assessing Officer.

We find merit in the said contention of the Ld. D.R. The alternative claim put forth by the assessee, in our view, should have been confronted to the Assessing Officer since the same requires proper examination of the books of account and other relevant details pertaining to the same. Hence, we are not able to sustain the orders passed by the Ld. CIT(Appeals). We are of the view that the alternative claim for deduction under Section 10(23C)(iiiad) requires fresh examination at the end of the Ld. CIT(Appeals), after duly confronting the same to the Assessing Officer. Accordingly, we set aside the orders passed by the Ld. CIT(Appeals) for the years under consideration and remit all the matters to his file with a direction to decide them afresh after eliciting the views of the Assessing Officer on the alternative contention of the assessee and take appropriate decision in accordance with law. The assessee should be given necessary opportunity of being heard.

In the result, all the three appeals filed by the Revenue are treated as allowed for statistical purposes.