HANS RAJ MEMORIAL EDUCATIONAL SOCIETY,JALANDHAR vs. DCIT EXEMPTIONS, CHANDIGARH

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ITA 822/CHANDI/2023Status: DisposedITAT Chandigarh03 July 2024AY 2016-17Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)4 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the order of the CIT(A) and remanded the matter back to the CIT(A) for fresh adjudication on merits. The Tribunal noted that the appeal was dismissed without deciding on the merits of the case.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed for non-prosecution. The assessee claimed this was due to pending proceedings before the Settlement Commission and a missed notice. The original assessment order denied exemption under Section 11 and made a significant addition.

What were the issues?

Whether the dismissal of the appeal for non-prosecution by the CIT(A) was justified, and if the matter should be decided on merits after providing an opportunity to the assessee.

Which sections of the Income-tax Act were involved?

Section 11,Section 132,Section 143(3),Section 245C

AI-generated summary — verify with the full judgment below

Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A)-5, Ludhiana dt. 17/04/2023 pertaining to Assessment Year 2016-17 wherein the appeal filed by the assessee has been dismissed on account of non-prosecution on the part of the assessee and the order passed by the AO dt. 26/12/2018 under Section 143(3) wherein the AO has denied the claim of exemption under section 11 and made an addition of Rs. 8,61,78,252/- has been confirmed.

2.

During the course of hearing, the Ld. AR submitted that the assessee filed the present appeal before the Ld. CIT(A) on 19/01/2019 and thereafter, search operations under section 132 were conducted on the Assessee Group on 25/09/2019. It was submitted that the Assessee Group thereafter filed applications under section 245(C)(1) on 24/09/2021 before the Settlement Commission which was subsequently taken up by the Interim Board of Settlement – V, Mumbai. It was submitted that since the matter was pending before the Interim Board of Settlement, the assessee moved adjournment applications before the Ld. CIT(A) from time to time and as far as the last notice dt. 30/03/2023 was concerned, the same was not received by the assessee, hence, assessee could not filed the necessary adjournment application. It was submitted that as the impugned assessment year was covered in the application so filed by the assessee before the Interim Board of Settlement, the assessee was awaiting the order to be passed by the Interim Board of Settlement and the said order has since been received on 30/03/2023. It was accordingly submitted that there was reasonable cause for non-compliance before the Ld. CIT(A) and given that the matter has been decided ex-parte qua the assessee and the fact that the order has not been passed on merits, the matter may be set aside to the file of the Ld. CIT(A) to decide the same on merits after providing necessary opportunity to the assessee.

3.

The Ld. CIT/DR submitted that it is unclear what the grievance of the assessee is where the assessee has moved an application and an order has since been passed by the Interim Board of Settlement. It was further submitted that since the Interim Board of Settlement has passed the order and it is the AO who has to give necessary effect to the order so passed by the Interim Board of Settlement, therefore, where the matter has to be set- aside, it would be more appropriate that this matter is set aside to the file of the AO who can pass appropriate order after taking into consideration the order so passed by the Interim Board of Settlement.

4.

We have heard the rival contentions and perused the material available on the record. Admittedly, the assessee filed the appeal before the Ld. CIT(A) on 19/01/2019 and thereafter, search operations under section 132(1) were conducted on the Assessee Group on 25/09/2019 and the Assessee Group thereafter moved the applications before the Settlement Commission on 24/09/2021 (later on take up by Interim Board of Settlement ) and since the proceedings were underway before the Interim Board for Settlement, Mumbai, the assessee has pleaded that the proceedings could not be attended before the Ld. CIT(A) and there was thus a reasonable cause for non-appearance. Further, given that the matter has not been decided on merits of the case, it was requested that the same be set-aside to which the ld CIT/DR didn’t raise any serious objections where the matter is set-aside.

5.

Further, it has been informed by the ld AR that the order of the Interim Board of Settlement has since been passed and in this context, as submitted by the ld CIT/DR, since the AO has to take effect to the said order of the Interim Board of Settlement, it was suggested that it would be more appropriate that this matter is also set-aside to the file of the AO instead of ld CIT(A).

6.

We have given a careful consideration to the factual matrix and find that the reason for non-appearance before the ld CIT(A) as so pleaded by the ld AR was on account of subsequent search and proceedings pending before the Interim Board of Settlement which apparently took precedence over the proceedings before the ld CIT(A). At the same time, as far as merits of the present case are concerned, as can be seen from the impugned order, the subject matter of appeal before the ld CIT(A) is arising out of the order passed by the AO u/s 143(3) dated 26/12/2018 under Section 143(3) wherein the AO has denied the claim of exemption under section 11 and made an addition of Rs. 8,61,78,252/- and the said assessment proceedings have been completed well before the date of search which was conducted on 25/09/2019. Therefore, as far as proceedings which were subject matter before the Interim Board of Settlement is concerned, the same are arising out of the subsequent search proceedings and as far as the present proceedings are concerned, the same are under regular assessment pursuant to regular tax filings by the assessee and are thus distinct proceedings and the subsequent search proceedings and consequent proceedings before the Interim Board of Settlement have no bearing on it and the same have to be decided and adjudicated independently. Further, given that in the instant

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