IILM EDUCATION TRUST,GURGAON vs. DCIT (EXEMPTIONS CIRCLE 2), CHANDIGARH
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Income Tax Appellate Tribunal, CHANDIGARH
Before: SHRI A.D.JAIN & SHRI KRINWANT SAHAY
आदेश/ORDER
PER A.D.JAIN, VICE PRESIDENT
This is assessee's appeal for assessment year 2014-15
against the order dated 23.02.2023 passed by the ld. CIT(A)
NFAC, Delhi. The following grounds of appeal have been
taken :
That on the facts and circumstances of the case and in law, the order dated 23.02.2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeals Centre ['CIT(A)'] is bad in law and liable to be quashed/ set-aside.
ITA 227/CHD/2023 A.Y. 2014-15 2 1.1. That on the facts and circumstances of the case and in law, the CIT(A) erred in disposing off The appeal ex-parte without granting opportunity for personal hearing either physically or through video conferencing mode, in gross violation of principles of natural justice.
1.2. That on the facts and circumstances of the case and in law, the CIT(A) erred in not appreciating that delay/ non filing of submissions were, inter alia, on account of - (i) long prevailing Covid-19 pandemic; (ii) critical illness to authorized representative (Mr Anil Kanodia, CA); and (iii) appellant becoming aware of various notice(s) just a day or two before compliance date. 1.3. That on the facts and circumstances of the case and in law, the CIT(A) erred in not appreciating that the appellant was interested in contesting the appeal as evident from the fact that the first appeal was duly filed in time, and the appellant is a charitable organization which cannot afford to bear the burden of such adverse and futile assessment/ demand.
Re: Denial o f exemption under section 11/12 2 . That the CIT(A) erred of facts and in law in 'confirming the action of the assessing officer in denying exemption claimed by the appellant under section 11/12 of the Income Tax Act, 1961 ("the Act') alleging the activities of the appellant to not be charitable in nature. 2.1. That the CIT(A) erred on facts and in law in not appreciating that the appellant is - (a) duly registered under section 12A, (b) undisputedly engaged in carrying on education which is 'per se' a charitable activity; and (c) compliant with the trust deed and applicable provisions of the Act and other laws in force, and thus eligible for exemption under sections 11 /12 of the Act. 2.2. That the CIT(A)/ assessing officer erred on facts and in law in denying exemption under sections 11/12 of the Act merely on the ground that land settled upon trust and building received as donation (that too in preceding year) were recorded at a nominal value in the books of the appellant.
Re: Addition o f voluntary donations- double taxation (wit/tout prejudice)
That the CIT(A) erred on facts and in law in confirming the addition of voluntary donation of Rs.3,47,00,000, without appreciating that the said amount was already included in the gross receipts declared by the appellant, thus resulting in double addition.
Re: Addition on account o f building received as corpus donation (without prejudice)
ITA 227/CHD/2023 A.Y. 2014-15 3 4. That the CIT(A) erred on facts and in law in confirming addition of Rs.4,31,07,826, being alleged value of building received as donation, merely on the ground that the same was recorded at nominal value of Rs. 10. 4.1. That on the facts and circumstances of the case and in law, the aforesaid addition made in the year under consideration (assessment year 2014-15) is per se bad in law since the building was received as donation in the immediately preceding year (assessment year 2013-14), which stood accepted as such in that year in hands of the appellant as well as the donor. 4.2. That the CIT(A) erred on facts and in law in not appreciating that aforesaid receipt of donation is. in any case, in the nature of corpus donation and hence not liable to tax under the provisions of the Act. 4.3. That the CIT(A)/ assessing officer erred on facts and in law in drawing adverse inference from the fact that deed of donation was not registered without appreciating that the same was duly notarized, and that there is no statutory requirement to register such deed. 4.4. That the C1T(A)/ assessing officer erred on facts and in law in not even specifying the provisions of the Act under which the aforesaid addition has been made. 4.5. Without prejudice, on the facts and circumstances of the case and in law, the receipt of building (capital asset) towards corpus with a direction to be utilized for specific purposes (education) is, per se, a capital receipt not liable to tax .
Re: Disallowance o f lease charges/ rent
That the CIT(A) erred on facts and in law in confirming the disallowance of Rs.72,00,000 being rent paid by the appellant to Kulwant Rai Trust alleging the same to be in the nature of accommodation entry. 5.1 That the C1T(A) erred on facts and in law in not appreciating that the merely because the land underneath the leased building is owned by the settlor of the appellant-trust, the actual lease of area of building to the appellant could not be doubted more so when undisputedly the land was leased, for educational activities and rent paid is not alleged to be excessive or unreasonable. 5.2 That the CIT(A)/ assessing officer erred on facts and in law in not appreciating that the appellant and lessee are separate and independent charitable entities, not covered under section 13(3) of the Act. 6. That on the facts and circumstances of the case and in law, interest is not leviable/ chargeable under section 234B of the Act.
ITA 227/CHD/2023 A.Y. 2014-15 4 2. The facts of the case are that the assessee is a public
charitable Trust with the object of imparting ‘education’.
The assessee Trust was registered u/s 12AA of the Income
Tax Act, 1961 vide order dated 12.02.2015 read with
rectification order dated 20.12.2016w.e.f. 01.04.2012. For
the year under consideration, the assessee Trust filed its
return of income on 22.09.2014 declaring ‘nil’ income after
claiming exemption u/s 11/12 of the Act. The return filed
by the assessee was selected for scrutiny and the
Assessing Officer passed assessment order dated
29.12.2016 u/s 143(3) of the Act assessing income of the
assessee at Rs.7,88,94,211/- and also made several
additions. Against aforesaid additions, the assessee filed
appeal before the CIT(A).
Before CIT(A), the assessee was issued various
notices u/s 250 of the Act on ITBA Portal i.e., on
23.12.2020, 01.03.2021, 16.03.2022, 09.05.2022,
12.07.2022, 11.10.2022, 29.11.2022 and 25.01.2023. In
compliance, the assessee submitted reply on 17.02.2021,
23.03.2021, 06.05.2022, 05.11.2022 and 07.02.2023
seeking adjournments on the ground that the assessee was
in the process of collating necessary documents for
ITA 227/CHD/2023 A.Y. 2014-15 5 preparing detailed submissions. The ld. Counsel for the
assessee has explained that pursuant to the transfer of
the appeal to NFAC, the appeal was fixed for the first time
for hearing on 23.12.2020, with the date of compliance as
01.01.2021. However, due to the extremely difficult
situation(s) during the then ongoing Covid-19 pandemic,
national wide lockdown, followed by critical illness
leading to the death of the Treasurer/authorized
representative, Late Shri Anil Kanodia, the assessee faced
difficulties in collating the necessary details/documents
and had to take adjournments. The ld. CIT(A) dismissed
the appeal of the assessee ex-parte observing that the
assessee had resorted only to seeking adjournments on
various occasions and on account of non-responsive
behaviour of the assessee.
Aggrieved, the assessee is in appeal before this
Tribunal. The ld. Counsel for the assessee has submitted
that the ld. CIT(A) has erred in disposing of the appeal by
passing an ex-parte order without granting opportunity for
personal hearing, either physically or through video
conferencing mode. It is noticed that the assessee was
issued many notices by the ld. CIT(A) for filing
ITA 227/CHD/2023 A.Y. 2014-15 6 submissions and supporting documents on ITBA Portal.
The ld. Counsel for the assessee has submitted that the
assessee could not comply with the directions of the ld.
CIT(A) on account of extremely difficult situations during
the then ongoing pandemic, lockdown imposed in the
country, and the critical illness leading to the death of the
Treasurer/authorized representative, Late Shri Anil
Kanodia, who was looking after the appeal and represented
the Trust before the authorities below. The ld. Counsel for
the assessee has further submitted that the impugned ex-
parte order has been passed without considering the
material available on record and has requested that the
impugned order of the ld. CIT(A) be set aside and the
assessee be given appropriate opportunity of being heard
to present its case.
We have heard the parties and have perused the
material on record. Considering all the facts and
circumstances of the case and in the interest of justice,
the file is restored to the file of ld. CIT(A) to decide the
matter afresh in accordance with law after giving
reasonable opportunity of being heard to the assessee.
ITA 227/CHD/2023 A.Y. 2014-15 7
The assessee, no doubt, shall cooperate in the fresh
proceedings before the ld. CIT(A).
In the result, the appeal of the assessee is allowed for
statistical purposes.
Order pronounced in the Open Court on 07.06.2024.
Sd/- Sd/-
(KRINWANT SAHAY) (A.D.JAIN ) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam”
आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�/ CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar
