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Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT & DR. B.R.R.KUMAR
ORDER
PER KUL BHARAT, JM :
The present appeal filed by the assessee for the assessment year 2018-19 is directed against the order of Ld. CIT(A), National faceless Appeal Centre (“NFAC”), Delhi dated 28.04.2023.
The assessee has raised following grounds of appeal:- 1. “That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in passing the impugned order and that too without providing the opportunity of being heard to the assessee and in violation of principles of natural justice.
2. That in any case and in any view of the matter, action of Ld. CIT(A) in passing the impugned order dated 28-04-2023, is bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned order without assuming jurisdiction as per law and without appreciating the Page | 1 fact that exemption cannot be denied in the intimation order u/s 143(1) and the action of Ld. ADIT CPC in denying the exemption is outside the purview of section 143(1) of the Act. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not deciding the appeal of the assessee on merits of the case. 5. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.” [
3. Facts giving rise to the present appeal are that the assessee filed its return of income at NIL on 26.06.2018. The said return was processed by Centralized Processing Centre (“CPC”) whereby the exemption u/s 10 of the Income Tax Act, 1961 (“the Act”) was disallowed.
4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A) who after considering the submissions, dismissed the appeal of the assessee on the ground that the assessee failed to file compliance about his claim.
5. Aggrieved against the order of Ld.CIT(A), the assessee is in appeal before this Tribunal.
Apropos to grounds of appeal, Ld. Counsel for the assessee vehemently argued that the Assessing Officer (“AO”) was not justified in making disallowance while processing the income tax return u/s 143(1) of the Act. He submitted that on this ground, the adjustment made by CPC needs to be deleted. He submitted that CPC exceeded its jurisdiction and adjustment, has been made in utter disregard to principles of natural justice.
On the other hand, Ld. Sr. DR opposed these submissions and supported the orders of the authorities below.
We have heard Ld. Authorized Representatives (“AR”) of the parties and perused the material available on record. The only grievance of the assessee is with regard to the denial of exemption by CPC. It is the contention of the assessee that the claim could not have been rejected while processing the return of income. The assessee was not given adequate opportunity to explain his case. We find that Ld.CIT(A) dismissed the appeal of the assessee and decided the issue by observing as under:- 4 Decision: 4.1 In this case, the appellant filed an appeal against the order dated 31.08.2018 passed under section 143(1) of Income-Tax Act, 1961 by the ACIT/DCIT, CPC, Bengaluru for Assessment Year 2018-19. 4.2 The grounds of the appeal are related to the issue of disallowance of exemption of Rs.60,513/- u/s 10 of the Income Tax Act, 1961. The notice of hearing was issued to the appellant on 10.11.2022 for furnishing submissions and evidences in support of Grounds of Appeals. The appellant did not comply. Further, again a notice was issued on 31.11.2022 for furnishing final submission. In compliance this notice, the appellant again not made any compliance. Again a final notice was issued to the appellant on 24.04.2023 but again no compliance was made by the appellant, hence, I have no alternate option, so, this appeal is decided accordingly on the basis of materials available on record. 4.3 Keeping in view of facts and circumstances of the case, it is observed that the appellant has claimed exemption of Rs. 60,513/- u/s 10 of the Act, 1961 in his ITR for the year under consideration, whereas, the same been disallowed by the CPC. During the appellant proceedings, the appellant did not file any compliance about his claim. Therefore, the AO has rightly disallowed exempt income claimed by the appellant, the same is upheld. Thus, the appeal of the appellant is dismissed.” Page | 3
9. From the above findings, it is evident that the appeal of the assessee for want of compliance at the end of assessee regarding its claim. Considering the material available on records, we are of the considered view that the authority below ought to have given adequate opportunity to the assessee. We therefore, set aside the impugned order and restore the issue to the file of Ld.CIT(A) to decide it afresh. Needless to say that the Ld.CIT(A) would grant adequate opportunity to the assessee for explaining its case and support its claim. Grounds raised by the assessee are thus, allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 23rd June, 2023.