THE CATHEDRAL VIDYA TRUST, MUMBAI V. THE ACIT, EXEMPTION, CIR-1, MUMBAI

ITA 1483/MUM/2023

AI Insights

The Cathedral Vidya Trust, a charitable organization, appealed against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, which had affirmed the Assessing Officer's decision denying the benefit of exemption under section 11 of the Income Tax Act, 1961. The Trust argued that it was engaged in commercial activities contrary to its charitable objects, which led to the denial of exemption. The Tribunal noted procedural delays and the lack of proper representation at the Commissioner level, leading to the decision to remand the case for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136470 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 06-08-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 27-04-2023
• Other Referred Cases: ITA Nos. 4958/Mum/2015, ITA Nos. 6997/Mum/2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Benefit of exemption
• Section: 11; 143(3); 80G; 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “G” BENCH, MUMBAI Before Shri Prashant Maharishi, Accountant Member & Shri Narender Kumar Choudhry, Judicial Member ITA No. 1483/Mum/2023 (Assessment Year: 2016-17) The Cathedral Vidya Trust 06, Pushottamdas Thakurdas Marg, G.P.O. Mumbai 400001 Vs. ACIT (Exemption), Cicle-1 6th Floor, MTNL Telephone Cumballa Hills, Poddar Road, Mumbai PAN – AABTT5706B Appellant Respondent Appellant by: Shri Viral Shah, Ld. CA Respondent by: Shri H.M. Bhatt, Ld. Sr. D.R. Date of Hearing: 07.08.2023 Date of Pronouncement: 18.08.2023 O R D E R Per: N.K. Choudhry, JM This appeal has been preferred by the Assessee against the order dated 09.03.2023 impugned herein passed by the learned Commissioner of Income Tax (Appeal)/National Faceless Appeal Centre, Delhi (NFAC) (in short ‘ld. Commissioner’) under section 250 of the Income Tax Act, 1961 (in short ‘the Act’) for AY 2016-17. 2. In this case, the Assessee trust is registered as a charitable organisation with the Charity Commissioner and CIT (Exemption), Mumbai under section 12A of the Act as well as under section 80G of the Act. The Assessee for the year under consideration declared its total income at Rs. ‘Nil’ by filing its return of income on 01.10.2016, which was selected for scrutiny and therefore the AO issued various statutory notices, in response to which the Assessee ITA No. 1483/Mum/2023 The Cathedral Vidya Trust 2 filed its reply. The Assessing Officer (AO) ultimately denied the benefit of exemption under section 11 of the Act by holding that it is abundantly clear that the Assessee trust is indulging in commercial activities (which are contradiction to its charitable objects by charging huge fees from students). 3. The Assessee being aggrieved challenged the assessment order dated 14.02.2018 passed under section 143(3) of the Act by filing first appeal, before the learned Commissioner. However, in spite of affording various opportunities by the learned Commissioner, the Assessee neither appeared nor filed any adjournment petition or written submissions. Therefore, in the constrained circumstances, the learned Commissioner dismissed the appeal of the Assessee and affirmed the action of the AO in denying the benefit of exemption under section 11 of the Act and computing the income at Rs. (-)1,47,94,999/-. 4. The Assessee being aggrieved is in appeal before us. 5. Heard the parties and perused the material available on record. The Assessee claimed that though the appeal was instituted on 11.01.2019 against the assessment order referred to above, however, first notice was issued for the date of hearing only on 5 th January, 2021, i.e. after 2 years and thereafter further notices were issued on 02.02.2023 and 18.02.2023, i.e. after two years and therefore that could be a reason which can be construed as valid reason for non-appearance before the learned Commissioner. The Assessee further claimed that the Hon'ble Coordinate Benches of the Tribunal vide orders dated 24.10.2017 and 27.11.2018 passed respectively in ITA Nos. 4958/Mum/2015 and 6997/Mum/2016 for the assessment years 2011-12 and 2012-13 also dealt with identical ITA No. 1483/Mum/2023 The Cathedral Vidya Trust 3 issues and allowed the exemption as claimed under section 11 of the Act. 6. We observe that in the absence of proper reply and/or documents the learned Commissioner failed to decide the appeal in proper manner, hence considering the peculiar facts and circumstances in totality, for just decision of the case and for the ends of substantial justice, we are inclined to remand the instant case to the file of the learned Commissioner for decision afresh, suffice to say by affording reasonable opportunity of being heard to the Assessee trust. 7. In the result, the appeal filed by the Assessee stands allowed for statistical purposes. Pronounced in the open Court on 18 th August, 2023. Sd/- Sd/- (Prashant Maharishi) (Narender Kumar Choudhry) Accountant Member Judicial Member Mumbai Copy to: 1. The Appellant 2. The Respondent 3. The CIT concerned 4. The DR, ITAT, Mumbai 5. Guard File By Order //True Copy// Assistant Registrar ITAT, Mumbai n.p.S