DIGAMBER JAIN SWADHYAY MANDIR TRUST,BHAVNAGAR V. THE DY.CIT, CIRCLE-1 (EXEMP.), AHMEDABAD

ITA 476/AHD/2023

AI Insights

The case involves the Digamber Jain Swadhyay Mandir Trust, which appealed against the rectification order passed under section 154 of the Income Tax Act, 1961, concerning the Assessment Year 2016-17. The Trust had initially filed a return declaring nil income, which was scrutinized due to substantial cash deposits. The Assessing Officer added these deposits as unexplained income and recalculated the tax liability under section 115BBE at 60%, correcting an earlier oversight. The Trust's appeal against this rectification was dismissed by the CIT(A), leading to the current appeal. The Tribunal found procedural improprieties in handling the Trust's ongoing main appeal and the rectification appeal separately, leading to the decision to set aside the CIT(A)'s order and consolidate the appeals for a comprehensive review.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 23233 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 14-10-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 07-06-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Rectification of order
• Section: 143(3); 154

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Digamber Jain Swadhyay Mandir Trust Soggadh, Bhavnagar, Gujarat-364250 PAN: AAATD1563F (Appellant) Vs The Dy.CIT, Circle-1, Exmp., Ahmedabad (Respondent) Assessee Represented: Shri Tushar Hemani, Sr. Adv. & Shri Parimalsinh B. Parmar, A.R. Revenue Represented: Shri V Nand Kumar, CIT-DR Date of hearing : 14-10-2024 Date of pronouncement : 18-10-2024 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 16.01.2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the Rectification order passed under section 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2016-17. ITA No. 476/Ahd/2023 Assessment Year 2016-17 I.T.A No. 476/Ahd/2023 A.Y. 2016-17 Page No Digamber Jain Swadhyay Mandir Trust vs. DCIT 2 2. The Registry has noted that there is a delay of 82 days in filing the above appeal. The assessee explained by way of a Notarized Affidavit that as against the regular assessment order passed u/s. 143(3) of the Act dated 06.12.2018 assessee’ appeal pending before Ld. NFAC. Assessee was of the wrong impression, separate appeal is not required to be filed against the appellate order passed against Rectification order, but the same was clarified by the Chartered Accountant. It is thereafter the assessee filed the above appeal with a delay of 82 days which is neither wilful nor wanton and therefore requested to condone the delay. 3. Ld. CIT-DR though initially objected the delay in filing the appeal and then left to the wisdom of the Bench. We are satisfied that the reason explained in the Affidavit thereby we condone the delay of 82 days in filing the above appeal and take up the main appeal for adjudication. 4. Brief facts of the case is that the assessee is a religious Trust maintaining Derasar (Temple), Atithi House (Guest House) and Bhojanshala (Mess) at Songadh (Palitana, Bhavnagar, Gujarat). For the Asst. Year 2016-17, assessee Trust filed its Return of Income on 14.09.2016 declaring Nil income. The return was taken up for scrutiny assessment on the ground that total cash deposits in Bank of India is Rs.1,34,40,611/- and the same was required to be explained. Since the assessee Trust failed to reply, the Assessing Officer held that the cash deposits in the bank account as unexplained and added to the total income of the assessee and demanded tax thereon. It is thereafter, the Assessing Officer found I.T.A No. 476/Ahd/2023 A.Y. 2016-17 Page No Digamber Jain Swadhyay Mandir Trust vs. DCIT 3 that the tax liability on the unexplained cash deposit had to be calculated as per the provisions of Section 115BBE at 60%. However by oversight mistake, the tax is calculated @ 30% plus applicable surcharge, education cess and interest. Hence a show cause notice was issued to the assessee why not to levy tax at 60% as per the provisions of Section 115BBE of the Act. 5. The A.O. was not satisfied with the reply of the assessee and reasons for cash deposits and thereby held that the cash deposits being unexplained is liable to be taxed at 60% u/s. 115BBE of the Act and revised the tax demand accordingly. 6. Aggrieved against the Rectification order, assessee filed an appeal before Ld. NFAC. The various submissions made by the assessee were considered by Ld. CIT(A) and ultimately held that the Rectification order passed by the Assessing Officer as correct in law and thereby dismissed the assessee appeal. 7. Aggrieved against the appellate order, the assessee is in appeal before us raising the following Grounds of Appeal: 1. The Ld. CIT(A) has erred in law and on facts of the case in confirming the rectification order u/s. 154 of the Act in absence of any mistake apparent from record. 2. The Ld. CIT(A) erred in not appreciating that invocation of S.115BBE after the assessment order is framed is beyond the scope of Section 154 of the Act and therefore he ought to have held it illegal and without jurisdiction. I.T.A No. 476/Ahd/2023 A.Y. 2016-17 Page No Digamber Jain Swadhyay Mandir Trust vs. DCIT 4 3. The Ld. CIT(A) erred in law and on facts of the case in invoking Section 292B of the Act for curing the defect of non-issuance of demand notice u/s. 154(6) of the Act. 4. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. The action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 5. The Appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 8. Ld. Sr. Counsel Shri Tushar Hemani appearing for the assessee submitted that the Ld. CIT(A) failed to consider that the appeal against the original assessment order passed u/s. 143(3) is pending as on today with the E-filing Acknowledgement No. 404914390030119 dated 03.01.2019. Without disposing of the main appeal, Ld. CIT(A) disposed of the present appeal arising out of the rectification order, so the impugned order is liable to be set aside to the file of Ld. NFAC to decide along with the pending appeal. 9. Per contra, Ld. CIT-DR Shri V Nanda Kumar appearing for the Revenue supported the order passed by the Lower Authorities and requested to uphold the same. 10. We have given our thoughtful consideration and perused the material available on record. Since the appeal against the regular assessment order is pending before Ld. NFAC, we deem it fit to set I.T.A No. 476/Ahd/2023 A.Y. 2016-17 Page No Digamber Jain Swadhyay Mandir Trust vs. DCIT 5 aside the present appellate order with a direction to Ld. NFAC to decide this appeal along with the main appeal in Acknowledgement No. 404914390030119 pending before him. Needless to state that proper opportunity of hearing be given to the assessee. 11. In the result, the appeal filed by the Assessee is allowed for statistical purpose. Order pronounced in the open court on 18 -10-2024 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 18/10/2024 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद "