THE PATIALA IMPROVEMENT TRUST,CHOTTI BARADARI vs. DCIT, CIRCLE , CHANDIGARH

आदेश/ORDER

PER A.D.JAIN, VICE PRESIDENT

This is assessee's appeal for assessment year 2016-17 against the order dated 18.05.2023 passed by the ld. CIT(Appeals) NFAC, Delhi. The following grounds have been taken :

ITA 457/CHD/2023 A.Y.2016-17 Page 2 of 4 2. Without prejudice to above, the learned CIT appeal has erred is not deciding the following ground of appeal on merit, (i) That the learned Assessing Officer has erred in framing assessment which is against natural justice. As no show cause was issued and notice dt. 16.07.2018 and 25.10.2018 were never serviced. Hence the assessment may be declared as null and void, (ii) That the learned Assessing Officer has erred in disallowing claim under section 11 in view of Amendment made by finance Act. 2008, 2010 and 2015 of sec. 2(15) in which proviso has been provided but the income is not derived from the said activities covered in the revised definition of sec.2 (15) of the Income Tax Act. Hence exemption may be allowed. (iii) That the learned assessing officer has erred in disallowing exemption under section 11 of the Income tax Act, while interpreting few transaction as business transaction ignoring the fact of overall purpose of the trust for planning, development and improvement. established by the Government of Punjab under the Punjab Town Improvement Act, 1922. The object of the Trust is to bring about improvement in the town of Patiala by providing street, housing facilities, development of parks, roads, providing of drinking water etc. The assessee claimed exemption u/s 11 of the Act in its ITR under “General Public Utility” as per Section 2(15) of the Act. The Assessing Officer issued notices u/s 142(1) dated 22.01.2018 and again on 16.7.2018 to the assessee but the assessee did not comply with the directions to explain the nature of the activities being carried out by the Trust. Thereafter, the Assessing Officer decided the appeal of the assessee on the basis of the ITA 457/CHD/2023 A.Y.2016-17 Page 3 of 4 information available on record and held that the assessee was not carrying out any activity in the nature of charity under “General Public Utility” and the activities of the Trust w.r.t. acquisition of lands, development of land and sale in the shape of plots, flats, floats and commercial booths at market rates after calling the application from the public with some registration fee cannot be treated as charitable activities. The Assessing Officer held the assessee to be not eligible for exemption u/s 11 and 12 of the Act and dismissed the appeal of the assessee.

3. The assessee went in appeal before the ld. CIT(A).

Before ld. CIT(A), the assessee was issued and served various notices u/s 250 of the Act to present his contentions and supporting documents. The said notices remain un-complied with. Accordingly, the ld. CIT(A) dismissed the appeal of the assessee. Aggrieved, the assessee is in appeal before this Tribunal.

Considering the facts and circumstances of the case, we are of the considered opinion that the assessee was not afforded proper and reasonable opportunity of being heard.

Therefore, in the interest of justice, the file is restored to the file of ld. CIT(Appeals) to decide the matter afresh in accordance with law after giving a reasonable opportunity of being heard to the assessee. The assessee, no doubt, shall cooperate in the fresh proceedings before the CIT(Exemptions).

Order pronounced on 12th March,2024.