CONTAI ROTARY COMMUNITY WELFARE TRUST,MEINIPUR V. I.T.O.,WARD 1(1),EXEMPTION, KOLKATA

ITA 52/KOL/2025

AI Insights

The case involves the Contai Rotary Community Welfare Trust, a charitable trust, which appealed against the order of the National Faceless Appeal Centre (CIT(A)) concerning the assessment year 2018-19. The trust had declared nil income in its return, which was processed but later selected for scrutiny. The Assessing Officer, due to non-compliance in providing necessary documents and explanations regarding claimed expenses, passed an ex parte order under section 144 of the Income Tax Act, disallowing all claimed expenses and adding them to the trust's income. The CIT(A) upheld this decision, leading to the trust's appeal to the Tribunal. The Tribunal found that both the assessment and appellate proceedings were conducted without proper opportunity for the trust to be heard, leading to the decision to remand the case back to the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314689 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Depreciation; Charitable institution
• Section: 144; 142(1); 12A

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Sonjoy Sarma, Judicial Member I.T.A. No.52/Kol/2025 Assessment Year: 2018-19 Contai Rotary Community Welfare Trust………………………..………….……Appellant Rathtala, P.O. Contai, Dist. Purba Medinipur, W.B. – 721401. [PAN: AAATC7008C] vs. ITO, Ward-1(1), Exemption, Kolkata…..……....….….. ……………….........…..Respondent Appearances by: Shri Miraj D. Shah, AR, appeared on behalf of the appellant. Shri Raja Sengupta, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : May 06, 2025 Date of pronouncing the order : May 07, 2025 ORDER Per Sonjoy Sarma, Judicial Member: The present appeal has been preferred by the assessee against the order dated 08.11.2024 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. Brief facts of the case are that the assessee is a charitable trust and registered u/s 12A of the Act. The assessee filed its return of income for the assessment year 2018-19 by declaring nil income which was processed u/s 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny under CASS to examine certain issues particularly the expenses claimed under the head of ‘income from other sources’. Notice u/s 143(2) of the Act was issued to the assessee requiring submission of certain documents but no response was received. Thereafter, a notice u/s 142(1) of the Act was issued calling for details of expenses claimed u/s 57 of the Act but the assessee again failed to respond. Thereafter, the Assessing Officer issued reminder to I.T.A. No.52/Kol/2025 Assessment Year: 2018-19 Contai Rotary Community Welfare Trust 2 the assessee but the assessee continued to remain non-compliant. In the absence of explanation or evidence, the Assessing Officer had no option but to proceed the assessment under the best judgment provision u/s 144 of the Act. While framing the assessment order, the Assessing Officer noted that the assessee declared income from various sources which are as under: Interest from S.B A/c 1,374 Registration charges 22,91,714 Incentive 1,750 Honorarium to Doctor 90,000 Income from X-ray 6,78,600 Blood other Test 12,01,870 Testing charges 14,018 Miscellaneous income 6,000 Sale of medicine without GST 80,48,093 GST from Medicine sale 7,87,584 Closing stock of medicine 9,77,546 Total 1,40,98,549 2.1 Against the above expenses, the assessee claimed expenses of Rs.1,42,80,649/- u/s 57 of the Act and depreciation of Rs.2,36,754/-. However, no documentary evidence was furnished in support of the expenses or depreciation claimed despite giving multiple opportunities to the assessee. In the absence of submissions, the Assessing Officer disallowed the entire expenses of Rs.1,42,80,649/- and Rs.2,36,754/- totalling to Rs.1,45,17,403/- and added the same to the total income of the assessee. I.T.A. No.52/Kol/2025 Assessment Year: 2018-19 Contai Rotary Community Welfare Trust 3 3. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the ld. CIT(A) contending that the non-compliance was due to negligence of the previous counsel and lack of timely communication. It was also argued before the ld. CIT(A) that sufficient materials were later on submitted but the ld. CIT(A) without detailed examination of the facts and evidences confirmed the order of the Assessing Officer by simply dismissing the appeal of the assessee on technical ground. 4. Dissatisfied with the above order, the assessee has filed the present appeal before this Tribunal arguing that the assessment order was passed ex parte u/s 144 and the ld. CIT(A) also passed the appellate order without appreciating the facts and materials subsequently submitted. The ld. AR stated that the entire assessment and appellate proceedings were completed without granting proper opportunity to the assessee to be heard. He, therefore, prayed that the matter may be remanded back to the file of the Assessing Officer for fresh adjudication. 5. On the other hand, the ld. DR supported the orders of the authorities below and opposed the above prayer of remand. 6. After hearing rival contentions and perusing the materials available on record, we find that the assessment order was passed ex parte u/s 144 of the Act due to assessee’s non-compliance to the statutory notices. We also find that even before the ld. CIT(A), the assessee failed to present its case effectively and the appeal was disposed of without proper consideration of the factual matrix and supporting documents. In the interests of justice and fair play, we are of the considered opinion that the matter needs to be restored to the file of the Assessing Officer for fresh consideration. We, therefore, set aside the order of the ld. CIT(A) and remand the matter to the file of the Assessing Officer for fresh adjudication after providing reasonable opportunity to the assessee to I.T.A. No.52/Kol/2025 Assessment Year: 2018-19 Contai Rotary Community Welfare Trust 4 furnish documentary evidences in support of its claim. We direct the assessee to appear positively before the Assessing Officer and comply with all the notices diligently which will be issued in the remand proceedings, failing to do so may result in ex parte adjudication as per law. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Kolkata, the 7th May, 2025. Sd/- Sd/- [Rajesh Kumar] [Sonjoy Sarma] लेखा सदèय/Accountant Member ÛयाǓयक सदèय/Judicial Member Dated: 07.05.2025. RS Copy of the order forwarded to: 1. Contai Rotary Community Welfare Trust 2. ITO, Ward-1(1), Exemption, Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches "