INCOME TAX OFFICER, EXEMPTIONS, MADURAI, MADURAI V. DOLPHIN EDUCATIONAL FOUNDATION, MADURAI

ITA 2600/CHNY/2025

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The case involves the Income Tax Department (Revenue) appealing against the order of the Learned Commissioner of Income Tax (Appeals), which set aside the assessment made by the Income Tax Officer (Exemptions), Madurai, and restored the matter for a fresh assessment. The original assessment was completed ex parte under section 144 of the Income-tax Act, 1961, due to the assessee's non-compliance with statutory notices. The Tribunal upheld the Ld.CIT(A)'s decision, emphasizing the need for a fair reassessment process, allowing the assessee a reasonable opportunity to be heard.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 834151 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Appeal Filed On: 19-09-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. ANITHA; C.I.T
• Keywords: Set aside; Opportunity of being heard; Unexplained cash credit; Charitable institution
• Section: 68

Judgement Text

" आयकर अपील य अ धकरण, ‘सी’ \u000eयायपीठ, चे\u000eनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI \u0015ी मनु क ुमार ग\u0019र, \u000eया\u001aयक सद य एवं \u0015ी एस. आर. रघुनाथा, लेखा सद य क े सम# BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.:2600/Chny/2025 \u001aनधा$रण वष$ / Assessment Year: 2020-21 ITO, Exemption, Madurai. vs. Dolphin Educational Foundation, 43, Harvey Nagar, 2nd Street, Arasaradi, Madurai – 625 016. (अपीलाथ&/Appellant) [PAN:AACTD-2565-K] ('(यथ&/Respondent) अपीलाथ& क) ओर से/Appellant by : Ms. R. Anitha, Addl. C.I.T. '(यथ& क) ओर से/Respondent by : None सुनवाई क) तार ख/Date of Hearing : 19.11.2025 घोषणा क) तार ख/Date of Pronouncement : 02.02.2026 आदेश /O R D E R PER S. R. RAGHUNATHA, AM : The present appeal of the Revenue is directed against the order dated 03.07.2025 passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the Ld.CIT(A)”] arising out of the assessment order dated 21.10.2022 passed by the Income Tax Officer (Exemptions), Madurai [hereinafter referred to as “the AO”] u/s.144 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”] pertaining to the Assessment Year 2020-21. 2. The brief facts of the case are that the assessee, a charitable institution, filed its return of income for the impugned assessment year on 13.01.2021, declaring aggregate income eligible for exemption u/s.11 of the Act at Rs. Printed from counselvise.com :-2-: ITA. No:2600/Chny/2025 3,05,51,409/-, and the amount applied during the previous year relevant to the assessment year under consideration at Rs. 2,95,92,402/-. 3. The case was selected for scrutiny and notice u/s.143(2) of the Act was issued on 10.03.2021. During the course of assessment proceedings, the AO observed that the assessee failed to comply with/respond to the statutory notices issued from time to time. Consequently, the AO proceeded to complete the assessment ex parte u/s.144 of the Act vide order dated 21.10.2022, determining the total income of the assessee at Rs. 6,66,95,395/-. 4. While completing the assessment, the AO computed the total gross receipts of the assessee at Rs.6,99,88,974/- and allowed application of income towards the objects of the trust at Rs.1,13,61,366/-, thereby arriving at an excess of income over expenditure amounting to Rs.5,86,27,608/-. 5. Further, after making various disallowances, the AO assessed the income of the assessee under the head “Profits and Gains of Business or Profession” at Rs. 6,53,98,230/-. In addition thereto, the AO made an addition of Rs. 12,97,165/- on account of unexplained cash credit under section 68 of the Act. 6. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). The Ld.CIT(A), vide the impugned appellate order dated 03.07.2025, set aside the assessment and restored the matter to the file of the AO for fresh adjudication/consideration in accordance with law. Aggrieved by the said order of the Ld.CIT(A), the Revenue has preferred the present appeal before this Tribunal. 7. At the outset, we observe that the impugned assessment has been framed by the AO u/s.144 of the Act. We further note that the first proviso to section 251(1)(a) of the Act confers powers upon the Ld.CIT(A) to set aside the assessment and restore the matter to the file of the Assessing Officer for the purpose of framing a fresh assessment in accordance with law. Printed from counselvise.com :-3-: ITA. No:2600/Chny/2025 8. In the present case, the Ld.CIT(A), after considering the facts and circumstances of the case, has exercised the aforesaid statutory power and set aside the assessment order with a direction to the AO to make a fresh assessment after due verification/examination of the relevant material and after affording reasonable opportunity of being heard to the assessee. In our considered view, such directions issued by the Ld.CIT(A) are well within the four corners of the powers vested u/s.251(1)(a) of the Act and are fully in conformity with the scheme of the Act. We do not find any infirmity, illegality or perversity in the directions so issued by the Ld.CIT(A), warranting interference by this Tribunal. Accordingly, the order of the Ld.CIT(A) is upheld. Consequently, the grounds raised by the Revenue stand dismissed. 9. In the result, the appeal of the Revenue stands dismissed. Order pronounced in the open court on 02nd February, 2026 at Chennai. Sd/- Sd/- (मनु क ुमार ग\u0019र) (MANU KUMAR GIRI) \u000eया\u001aयक सद य/Judicial Member (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखा सद य/Accountant Member चे\u000eनई/Chennai, .दनांक/Dated, the 02nd February, 2026 SP आदेश क) '\u001aत0ल1प अ2े1षत/Copy to: 1. अपीलाथ&/Appellant 2. '(यथ&/Respondent 3.आयकर आयु3त/CIT– Chennai/Coimbatore/Madurai/Salem 4. 1वभागीय '\u001aत\u001aन ध/DR 5. गाड\u0004 फाईल/GF Printed from counselvise.com "