GURU NANAK TRUST FOR CHARITABLE,MOHALI V. INCOME TAX OFFICER,EXEMPTIONS WARD, CHANDIGARH

ITA 1079/CHANDI/2024

AI Insights

The case involves the Guru Nanak Trust for Charitable, a charitable trust, which appealed against the orders of the CIT(A)/NFAC, Delhi, pertaining to the Assessment Year 2018-19. The trust had filed its return declaring a loss, which was scrutinized under the e-assessment scheme, leading to an ex parte assessment order that treated excess liabilities as income. The trust's appeal to the CIT(A) was dismissed due to a significant delay without an affidavit explaining the delay. The tribunal found that the assessment order was sent to the trust's email, but there were doubts about the email's activity status, especially since a different email was used in a subsequent year. The tribunal decided to remand the matter back to the CIT(A) for a thorough examination of these issues.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107607 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Other Referred Cases: Munjal BCU Centre of Innovation and Entrepreneurship Vs. CIT(E) Chandigarh CWP No. 21028/2023 dt. 04/03/2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: SHRUTI KHANDELWAL
• Keywords: Opportunity of being heard; Reasonable cause; Fair market value; Deemed to accrue or arise in india; Charitable institution
• Section: 144; 142(1); 143(2); 250

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “ए” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: HYBRID MODE ŵी लिलत क ुमार, Ɋाियक सद˟ एवं ŵी क ृणवȶ सहाय, लेखा सद˟ BEFORE: SHRI. LALIET KUMAR, JM & SHRI. KRINWANT SAHAY, AM आयकर अपील सं./ ITA No. 1079 /Chd/ 2024 िनधाŊरण वषŊ / Assessment Year : 2018-19 Guru Nanak Trust for Charitable 1595, Phase 3B2, Mohali, Punjab- 160055 बनाम The ITO Exemptions Ward, Chandigarh ˕ायी लेखा सं./PAN NO: AACTG1450G अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Ms. Shruti Khandelwal, Advocate for Shri Parikshit Aggarwal, C.A राजˢ की ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 02/04/2025 उदघोषणा की तारीख/Date of Pronouncement : 07/04/2025 आदेश/Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the CIT(A)/NFAC, Delhi dt. 17/10/2024 pertaining to Assessment Year 2018-19. 2. In the present appeal Assessee has raised the following grounds: 1. That on the facts, circumstances and legal position of the case, the Worthy CIT(A), NFAC in Appeal No. NFAC/2017-18/10239381has erred in passing order dtd. 17.10.2024 in contravention of provisions of S. 250 of the Income Tax Act, 1961 (hereinafter referred to as \"Act\"). 2. That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in dismissing the appeal filed by the appellant in limine even when the appellant had bonafide and reasonable cause which led to delay in filing of appeal before the Worthy CIT(A). 3. That on facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the addition made by the Ld. AO of Rs. 32,83,423/- by erroneously holding that the assets and liabilities of equal amount of Rs. 32,83,423/- as per Balance sheet of the appellant is taxable deemed income of the appellant. 4. That on facts, circumstances and legal position of the case, the order passed by Ld. AO and then by Worthy CIT(A)deserves to be quashed since the same has been passed without affording reasonable opportunity of being heard to the appellant. 2 3. Briefly the facts of the case are that the assessee is a charitable trust, filed its return for AY 2018-19 declaring a loss of Rs. 12,67,468. The case was selected for scrutiny under the e-assessment scheme to verify the taxation of accreted income. Despite notices under Sections 143(2) and 142(1) of the Income Tax Act, 1961, the assessee has failed to respond the same. The Ld. AO observed a mismatch between the trust’s claimed liabilities of Rs. 32,83,483 and the aggregate fair market value of its assets of Rs. 32,83,423. The AO treated the excess liability as income from other sources, the AO passed an ex parte assessment order under Section 144 on 16.04.2021, determining total income at Rs. 20,15,960 and raising a demand of Rs. 8,72,092. 4. Against the order of the AO the assessee went in appeal before the Ld. CIT(A) which is late by 704 days and the Ld. CIT dismissed the appeal for the reason that the assessee has not filed any affidavit explaining the delay. 5. Against the order of the Ld. CIT(A) the assessee is in appeal before us. 6. During the course of hearing the Ld. Counsel for the Assessee submitted that the assessment order was never physically served, and the trust became aware of it only through the reassessment order dated 22.03.2023. And regarding the delay filing in appeal before the Ld. CIT(A) the assessee submitted that the delay arose due to circumstances beyond their control, warranting condonation under Section 249(3). 7. Per contra, the Ld. DR relied on the order of the lower authorities. 8. We have heard the rival contention and perused the material available on the record. In the present case we find that the assessment order was sent to the assessee’s registered email id as per legal requirements under section 282. However, the assessee claims that they were unaware of it, which is raising doubts about whether the email id was active or regularly checked or not. Further the AR had filed the return of income for the subsequent year for A.Y. 2019-20 wherein different email id i.e; [e-mail] has been mentioned. The appeal was dismissed by the Ld. CIT(A) mainly because no affidavit was provided by the assessee for the condonation of delay. However, technical issues should not outweigh fair justice if the appellant acted in good faith. We are of the opinion that in the interest of justice, we remand the matter back to the file of the Ld. CIT(A) and also direct the assessee to submit an affidavit explaining the reason for delay of 704day, including details about email 3 access and monitoring during that period. The Ld. CIT(A) should check whether the registered email id was working and determine if the delay was due to a genuine mistake or negligence. Ld. CIT(A) shall keep in mind that there was change of email id in subsequent year and it is quite possible that assessee may not have received the email. The Ld. CIT(A)is also directed to apply the ratio laid down by the Jurisdictional High Court in the case of Munjal BCU Centre of Innovation and Entrepreneurship Vs. CIT(E) Chandigarh CWP No. 21028/2023 dt. 04/03/2024 while passing the order. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 07/04/2025. Sd/- Sd/- क ृणवȶ सहाय लिलत क ुमार (KRINWANT SAHAY) (LALIET KUMAR) लेखा सद˟/ ACCOUNTANT MEMBER Ɋाियक सद˟ /JUDICIAL MEMBER AG आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "