DISTRICT RED CROSS SOCIETY,GURGAON V. ITO, WARD-1(4), GURGAON

ITA 1259/DEL/2024

AI Insights

The case involves the District Red Cross Society appealing against the order of the CIT/National Faceless Appeal Centre (NFAC), which had dismissed their earlier appeal due to non-payment of advance tax as required under section 249(4) of the Income Tax Act, 1961. The original assessment had been made ex-parte under section 144, assessing the income significantly higher than the returned NIL income. The Tribunal found that the provisions of section 249(4) were erroneously invoked, given the circumstances of the case, and thus restored the matter to the A.O. for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474895 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: MANJIT ANJNA
• Keywords: Principle of natural justice; Source of fund; Deemed to accrue or arise in india
• Section: 144

Judgement Text

" 1 ITA No. 1259/Del/2024 District Red Cross Society Vs. CIT, Exemption IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘B’ NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No. 1259/Del/2024 (A.Y 2017-18) District Red Cross Society Behind ITI, Meheauli Road, Chandan Road, Gurgaon, Haryana PAN: AAABD1232B Vs CIT, Exemption Gurgaon Haryana Appellant Respondent Assessee by CA Manjit Anjna Revenue by Sh. Surender Pal, CIT DR and Sh. Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 28/01/2025 Date of Pronouncement 31/01/2025 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of the CIT/National faceless Appeal Centre (‘NFAC’ for short) dated 06/02/2024 for Assessment Year 2017-18. 2. The grounds of appeal are as under: - “1. That the appellant denies its liability to be assessed under section 144/147 at an income of INR 60,59,356/- and 2 ITA No. 1259/Del/2024 District Red Cross Society Vs. CIT, Exemption accordingly denies its liability to pay tax, interest demanded thereon. 2. That the Ld. CIT(A) has erred in his order for dismissal of appeal on the ground-of non-payment of advance tax u/s 249(4), whereas the advance payment is not applicable in case of assesse as the whole addition had been challenged before the Hon'ble CIT(A). 3. That the Ld. CIT(A) has erred in rejecting the appeal without giving a Show cause notice to assesse, which is violation of principal of natural justice. 4. That the Ld. CIT(A) has erred in refusing Just Relief to appellant merely because of some mistake, negligence, inadvertence or even fraction of rules of procedure. 5. That by dismissal of appeal the Ld. CIT(A) had erred of upholding the impugned order passed by Ld. A.O. Where the Ld. AO has considered all credit transaction in bank statement and considered 15% as deemed income i.e. 49,98,950 on amount received other than the period of demonetization and amount received during demonetization period as deemed income under Other sources & considered income @60%. Although the Ld. A.O. has all the details mentioning the sources of Income. This is against the principle of natural justice. As the Law of Income tax clearly states that Income should be taxed in their respective heads. 6. That the appellant craves leave to add to, alter, amend, modify, substitute, delete and/or rescind all or any of the grounds if necessary so rises of Appeal on or before the final hearing.” 3. Brief facts of the case are that, an assessment order came to be passed u/s 144 of the Income Tax Act, 1961 (‘Act’ for short) vide assessment order dated 14/12/2019 by computing the income of the Assessee at Rs. 83,26,130/-as against the returned NIL income. 3 ITA No. 1259/Del/2024 District Red Cross Society Vs. CIT, Exemption Aggrieved by the assessment order dated 14/12/2019, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 06/02/2024, dismissed the appeal filed by the Assessee without admitting the same on the ground that the Assessee has not complied the involved necessary condition contemplated u/s 249 (4)(b) of the Act by making advance payment of equal amount to the amount of advance tax. Aggrieved by the order of the Ld. CIT(A), the Assessee preferred the present Appeal on the grounds mentioned above. 4. The Ld. Counsel for the Assessee submitted that the Assessee denies the liability to be assessed u/s 144/147 of the Act and there is no liability to pay the tax. Further contended that the provision of Section 249(4) are not applicable to the Assessee. Therefore, submitted that the order impugned of the Ld. CIT(A) suffers infirmity, thus, sought for allowing the Appeal. 5. Per contra, the Ld. Departmental Representative submitted that the Ld. CIT(A) has rightly dismissed the Appeal filed by the Assessee without admitting the same as the Assessee has not complied the conditions prescribed u/s 249(4)(b) of the Act, therefore, sought for dismissal of the Appeal. 4 ITA No. 1259/Del/2024 District Red Cross Society Vs. CIT, Exemption 6. We have heard both the parties and perused the material available on record. As could be seen from the assessment order, the same has been passed ex-parte and the Assessee contended that there is no liability to pay tax by the Assessee, thus, invocation of provision of Section 249(4) of the Act is erroneous. Considering the fact that assessment order has been passed ex-parte, we deem it fit to restore the issue to the file of the A.O. for framing de-novo assessment after hearing the Assessee. The Assessee is also directed to participate and co-operate in the assessment proceedings, failing which the A.O. is at liberty to pass order in accordance with law. 7. In the result, Appeal of the Assessee is partly allowed for statistical purpose. Order pronounced in the open court on 31st January, 2025 Sd/- Sd/- (AVDHESH KUMAR MISHRA) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 31.01.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI 5 ITA No. 1259/Del/2024 District Red Cross Society Vs. CIT, Exemption "