ACCURATE EDUCATION AND RESEARCH SOCIETY,GREATER NOIDA, UP V. DCIT EXEMPTIONS 1(1), DELHI

ITA 3156/DEL/2024

AI Insights

The case involves Accurate Education and Research Society, which appealed against the orders of the AO and CIT(A) concerning the assessment year 2020-21. The primary contention was the erroneous addition of substantial amounts to the assessee's income due to alleged failure to furnish a certificate of registration under sections 12A/12AA of the Income Tax Act. The AO had also treated the assessee as an Association of Persons (AOP) and estimated gross receipts as business income, applying an 8% estimation rate. The CIT(A) upheld the AO's decision, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal found procedural lapses in the handling of the case by the lower authorities and remitted the matter back to the AO for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 471578 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-10-2024
• Assessment Year: 2020-2021
• Appeal Filed On: 02-07-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: JAVED AKHTAR
• Assessee Lawyers: AMIT GOEL
• Keywords: Opportunity of being heard; Depreciation; Principle of natural justice; Competent authority
• Section: 11; 44AD

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA NO. 3156/Del/2024 A.YR. : 2020-21 ACCURATE EDUCATION AND RESEARCH SOCIETY, 49, KNOWLEDGE PARK-3, GREATER NOIDA, UTTAR PRADESH-201306 (PAN: AAAAA7866M) VS. DCIT (EXEMPTIONS)1(1) CIVIC CENTRE, NEW DELHI - 2 (APPELLANT) (RESPONDENT) Appellant by : Shri Amit Goel, CA Respondent by : Mr. Javed Akhtar, CIT(DR) Date of hearing : 08.10.2024 Date of pronouncement : 09.10.2024 ORDER PER SHAMIM YAHYA, AM : The Assessee has filed the instant Appeal against the Order of the Ld. CIT(Appeal)/NFAC, Delhi dated 30.10.2023, relating to assessment year 2020-21 on the following grounds:- “1. On the facts and circumstances of the case and in law, the assessment order passed by the AO by making addition of Rs. 26,56,12,954/- and Rs. 2,07,91,846/- on the ground that the assessee failed to furnish certificate of registration u/s. 12A/12AA is totally erroneous without appreciating the fact that the assessee 2 was duly registered u/s. 12A/12AA of the Act and this fact was verifiable from the department’s own records. 2. On the facts and circumstances of the case and in law, the AO erred in passing exparte order and CIT(A) erred in passing exparte order and CIT(A) erred in not holding so. 3. On the facts and circumstances of the case and in law, the order passed by lower authorities CIT(A) and AO is against the principles of natural justice. 4. On the facts and circumstances of the case and in law, the CIT(A) erred in not adjudicating the grounds of appeal on merit. 5. On the facts and circumstances of the case and in law, the CIT(A) erred in passing exparte order. 6. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in passing order without providing proper opportunity of being heard. 7. On the facts and circumstances of the case and in law, the AO erred in not allowing the deduction / exemption u/s. 11 of the Act and CIT(A) erred in not holding so. 8. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the AO by invoking section 44AD of the Act on account of estimation of gross receipts of Rs. 2,07,91,846/- i.e. @ 8% of Rs. 25,98,98,077/-. 9. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of AO in disallowance of exemption claimed u/s. 11(1)(c) of the Act of Rs. 26,56,12,954/-. 10 On the facts and circumstances of the case and in law, the AO erred in treating the assessee as an AOP (Association of Person) and treating the gross receipts as deemed receipts from business and CIT(A) erred in not holding so.” 3 2. Brief facts of the case are that Assessee filed its return of income for the year under consideration declaring total income as NIL. The case of the assessee was selected for scrutiny under CASS for the reasons of expenditure for charitable or religious purposes and depreciation claimed by trust during the year. The notices were issued and served upon the assessee accordingly. The assessee did not respond to the notices. During the assessment proceedings, AO noted that the assessee had claimed exemption u/s. 11(1)(c) of the Act to the tune of Rs. 26,56,12,954/-, however, the assessee failed to furnish the Certificate of Registration u/s. 12A/12AA and as such had failed to prove that it was a registered trust duly approved by the competent authority. AO further noted that assesee had only filed form 10-B, which could not be said to be fulfilling the condition laid down for claiming deduction u/s. 11 of the Act, therefore, the AO had disallowed the aforesaid exemption claimed. Further, the AO had considered the gross receipts of the assessee as receipts from business and the income from such receipts was estimated at 8% of the gross receipts, i.e. 8% of Rs. 25,98,98,077/- at Rs. 2,07,91,846/- and added the same to the total income of the assessee vide exparte assessment order dated 13.09.2022 passed u/s. 144 r.w.s. 144B of the Act. Against the aforesaid AO’s order, assessee appealed before the Ld. CIT(A), who vide his impugned order 30.10.2023 has dismissed the appeal of the assessee by observing that the assessee has not filed any written submission/document with respect to ground raised in Form 35 and accordingly upheld the order of the AO. Aggrieved with the aforesaid action of the Ld. CIT(A), assessee is in appeal before us. 3. At the outset, Ld. AR has submitted that AO has passed the assessment order by making addition of Rs. 26,56,12,954/- and Rs. 2,07,91,846/- on the ground that the assessee failed to furnish certificate of registration u/s. 12A/12AA is totally erroneous without appreciating the fact that the assessee was duly registered u/s. 12A/12AA of the Act, this fact was 4 verifiable from the department’s own record. It was further submitted that the AO has passed the exparte order, which is against the principles of natural justice. It was the further contention of the Ld. AR that Ld. CIT(A) has not adjudicating the ground of appeal on merit and also passed the exparte order, without providing proper opportunity of being heard. Hence, Ld. AR has prayed that the issues in dispute may please be remitted back to the file of the AO for fresh adjudication, after giving adequate opportunity of being heard to the assessee. Ld. DR has no serious objection on the aforesaid proposition made by the Ld. AR. 4. We have heard the rival contentions and perused the records. Considering the grounds raised by the Assessee as well as aforesaid contentions made by the Ld. AR during the hearing, we are of the considered view, that interest of justice will be served, if the issues in dispute are remitted back to the file of the AO with the directions to consider the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. Moreover, assessee is also directed to produce all the necessary documents / evidences, if any, before the AO in order to canvass its case appropriately. 5. In the result, the Assessee’s appeal is allowed for statistical purposes. Order pronounced on 09/10/2024. Sd/- (SUDHIR KUMAR) Sd/- (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER SRB Copy forwarded to:- 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT Assistant Registrar "