CSMMU WELFARE SOCIETY ,LUCKNOW V. LD. AO, NFAC, JURISDICTIONAL AO-DCIT(EXEMPTION), LUCKNOW

ITA 596/LKW/2024

AI Insights

The case involves the CSMMU Welfare Society, a charitable society, which faced scrutiny from the Income Tax Department for discrepancies in reported income during the demonetization period in India. The society had deposited a substantial amount of cash, which was not fully disclosed in their income returns. The Assessing Officer (AO) reopened the case under section 147 of the Income Tax Act, added the undisclosed income to the society's taxable income, and initiated penalty proceedings. The society's appeal to the NFAC was dismissed ex-parte, leading to their appeal to the Income Tax Appellate Tribunal, which resulted in the restoration of their case to the NFAC for a detailed hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126570 (ITAT-LUCKNOW)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJEEV KRISHNA SHARMA
• Assessee Lawyers: SHWETA MITTAL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 147; 148; 144; 142(1); 22

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “A”, LUCKNOW BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No.596/LKW/2024 Assessment Year: 2017-18 CSMMU Welfare Society VC Office, King George Medical University Lucknow v. The DCIT (Exemption) Lucknow TAN/PAN:AAATC6217F (Appellant) (Respondent) Appellant by: Ms. Shweta Mittal, C.A. Respondent by: Shri Sanjeev Krishna Sharma, D.R. Date of hearing: 21 04 2025 Date of pronouncement: 22 04 2025 O R D E R PER SUDHANSHU SRIVASTAVA, J.M.: This appeal has been preferred by the assessee against the order dated 31.07.2024, passed by the ld. Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2017-18. 2. The brief facts of the case are that the assessee is a charitable society. It was noticed by the Income Tax Department that the assessee-society had made cash deposits to the tune of Rs.7,76,89,268/- during the demonetization period Whereas, the assessee had shown only Rs.5,64,72,685/- under Aggregate of income. Since the difference of Rs.2,12,16,583/- had not been ITA No.596/LKW/2024 Page 2 of 4 shown by the assessee in the return of income for the year under consideration, the case of the assessee-society was reopened under section 147 of the Act by issuing notice under section 148 of the Act. The assessee did not file any return of income in response to notice under section 148 of the Act, but, filed a reply, vide dated 28.12.2021, in response to notice under section 142(1) of the Act. The Assessing Officer (AO), after considering the reply of the assessee, completed the assessment under section 147 read with sections 144 and 144B of the Act, assessing the total income of the assessee at Rs.2,12,16,580/-, after making an addition of Rs.2,12,16,583/- as unexplained/undisclosed income of the assessee. 2.1 The AO also initiated penalty proceedings under section 270A of the Act, separately. 3. Aggrieved, the Assessee preferred an appeal before the NFAC. The appeal of the Assessee came to be dismissed in limine by passing an order ex-parte qua the Assessee. 4. Now, the assessee has approached this Tribunal challenging the dismissal of its appeal by the NFAC by raising the following grounds of appeal: ITA No.596/LKW/2024 Page 3 of 4 1. The Commissioner of Income Tax (Appeal) has erred in law and on facts in passing the order which is illegal, improper and against the principles of natural justice. 2. The Commissioner of Income Tax (Appeal) has erred in law and on facts in passing an ex-parte order without giving adequate opportunity of being heard. 3. The Commissioner of Income Tax (Appeal) has erred in law and on facts in confirming the addition of Rs.2,12,16,583/- made by Ld. Assessing Officer treating it as undisclosed income. 4. The Commissioner of Income Tax (Appeal) has erred in law and on facts in passing appellate order which is contrary to the facts and law. 5. The appellant craves leave to add, amend, alter or withdraw any grounds of appeal or raise any new ground appeal during the pendency of appeal. 5. The ld. Authorized Representative for the Assessee submitted before us that the NFAC was not justified in dismissing the appeal of the Assessee by passing an order ex- parte qua the Assessee. The ld. AR prayed that the Assessee’s appeal may be restored to the file of the NFAC for the purpose of adjudication on merits. 6. Since the order passed by NFAC was an ex-parte order, the ld. Senior D.R. had no objection to the restoration of appeal to the NFAC. ITA No.596/LKW/2024 Page 4 of 4 7. We have heard both the parties and have also perused the material on record. Looking into the facts of this case, we are of the considered view that the Assessee deserves one more opportunity to present its case and, therefore, we restore this file to the Office of the NFAC with the direction to hear the appeal on merits. We also caution the Assessee to fully comply with the notices and directions of the NFAC in the set-aside proceedings when called upon to do so, failing which, the NFAC would be at complete liberty to pass the order in accordance with law, based on material available on record even if it is ex-parte qua the assessee. 8. In the result, the appeal of the Assessee stands allowed for statistical purposes. Order pronounced in the open Court on 22/04/2025. Sd/- Sd/- [ANADEE NATH MISSHRA] [SUDHANSHU SRIVASTAVA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:22/04/2025 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR By order Assistant Registrar/DDO "