THE PATIALA IMPROVEMENT TRUST,CHOTTI BARADARI vs. DCIT, CIRCLE , CHANDIGARH
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Income Tax Appellate Tribunal, CHANDIGARH
Before: SHRI A.D.JAIN & SHRI VIKRAM SINGH YADAV
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 :
The learned CIT Appeal has erred in dismissing the appeal without any opportunity and without service of any notice, hence rejection is arbitrary and unjustified.
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.
The facts of the case are that the assessee is a Trust
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.
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.
We have heard the rival submissions and perused the
material available on record. We have found that the ld.
CIT(A) dismissed the appeal of the assessee on the basis of
non-compliance of the notices issued by the office of the ld.
CIT(A). But there is nothing on record to prove that the
ITA 457/CHD/2023 A.Y.2016-17 Page 4 of 4 assessee was issued proper notices to present his case.
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).
In the result, the appeal of the assessee is allowed for
statistical purposes.
Order pronounced on 12th March,2024.
Sd/- Sd/-
(VIKRAM SINGH YADAV) (A.D.JAIN ) ACCOUNTANTMEMBER 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
