Madresa Himayatul Islam Bachchon ka Ghar, Bardoli V. Income Tax Officer, Exemption Ward, Surat

ITA 279/SRT/2022

AI Insights

The case involves Madresa Himayatul Islam Bachchon Ka Ghar, a public charitable trust, which did not file a return of income for the Assessment Year 2017-18. The Assessing Officer noted a cash deposit of Rs. 20,00,000 during the demonetization period in Dena Bank, which was confirmed by the bank. The trust, primarily funded by public donations, did not have registration under Section 12A/12AA. The Assessing Officer, after issuing notices and receiving online details from the assessee, deemed the cash deposit as unexplained under Section 69A and taxed it under Section 115BBE at a rate of 77.25%. The CIT(A) dismissed the appeal in limine due to non-payment of due tax as per Section 249(4), without adjudicating on merits. The Tribunal found that the CIT(A) should have considered the appeal on merits and restored the matter back to the CIT(A) for fresh adjudication.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301557 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-12-2022
• Assessment Year: 2017-2018
• Appeal Filed On: 27-09-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 144; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH (SMC), SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 279/Srt/2022 (Assessment Year: 2017-18) (Physical hearing) Madresa Himayatul Islam Bachchon Ka Ghar, Ground Floor Bachchon Ka Ghar, Kadod, Bardoli-394335. PAN No. AADTM 1802 F Vs. I.T.O. Exemption Ward, Surat. Appellant/ assessee Respondent/ revenue Appellant represented by Shri Rasesh Shah, CA Respondent represented by Shri Vinod Kumar, Sr. DR Date of hearing 30/12/2022 Date of pronouncement 02/01/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi (in short, the NFAC)/learned Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A) dated 26/05/2022 for the Assessment year (AY) 2017-18. The assessee has raised following grounds of appeal: “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in treating the appeal as not maintainable. 2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in dismissing the appeal without passing speaking order. 3. On the facts and circumstances of the case as well as law on the subject, the learned assessing officer has erred in making addition of Rs. 20,69,392/- u/s 69A of the Income Tax Act, 1961 on account of alleged unexplained cash credits made in the bank. 4. On the facts and circumstances of the case as well as law on the subject, the learned assessing Officer has erred in taxing the addition by taking the rate @ 77.25% by attracting S. 115BBE instead of normal tax rate. ITA No.279/Srt/2022 Madresa Himayatul Islam Vs ITO(E) 2 5. On the facts and circumstances of the case as well as law on the subject, the learned assessing Officer has erred in taxing the income u/s 115BBE @ 77.25% by applying the duly substituted S. 115BBE inserted retrospectively instead of taxing it at 35.54% as per the old provision of s. 115BBE. 6. It is therefore, prayed that the above additions made by assessing officer and confirmed by the CIT(A) may please be deleted. 7. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 2. Brief facts of the case are that no return of income was filed by assessee for A.Y. 2017-18. The Assessing Officer was having information that the assessee had made cash deposit of Rs. 20.00 lacs during demonetization period in Dena Bank. The cash deposit of Rs. 20.00 lacs were confirmed by bank in response to notice under Section 133(6). On further verification of facts from assessee, it was noted by Assessing officer that the assessee is a public charitable trust and running Madersa to impart education to poor students. The main source of assessee’s income is donation from public. The trust is not having registration under Section 12A/12AA. As no return of income was filed, thus, the Assessing Officer issued notices to assessee to furnish details of cash deposits as per CBDT Circular. The Assessing Officer recorded that the assessee furnished all details online. The Assessing Officer after considering the reply, took his view that the assessee has not explained the cash deposit in proper manner with documentary evidence, thus the genuineness of cash deposit was not proved. The Assessing Officer treated the cash deposit as unexplained money under Section 69A and taxed under ITA No.279/Srt/2022 Madresa Himayatul Islam Vs ITO(E) 3 Section 115BBE of the Act in his assessment order dated 24/12/2019 passed under Section 144. 3. Aggrieved by the addition, the assessee filed appeal before the ld. CIT(A). The appeal of assessee was migrated to NFAC. The NFAC/ ld. CIT(A) dismissed the appeal of assessee by holding that the assessee has not paid due tax as per Section 249(4) on the returned income. The appeal of assessee was dismissed in limine without adjudicating the issues on merit. Further aggrieved, the assessee has filed this appeal before the Tribunal. 4. I have heard the submissions of learned Authorised Representative (ld. AR) of the assessee and the learned Senior Departmental Representative (ld. Sr. DR) for the revenue and have gone through the orders of lower authorities carefully. The ld. AR of the assessee submits that no return of income was filed by assessee for the year under in dispute. The Assessing Officer completed the assessment under Section 144. The ld. CIT(A) was required to adjudicate the appeal on merit instead of dismissing in limine. The ld. AR prayed to restore the appeal to the file of ld. CIT(A) with direction to adjudicate the appeal on merit. 5. On the other hand, the ld. Sr.DR for the revenue supported the order of ld. CIT(A). On any specific query, if the matter be restored to ld. CIT(A) for adjudication on merit, the ld. Sr .DR for revenue says that he has no ITA No.279/Srt/2022 Madresa Himayatul Islam Vs ITO(E) 4 objection if the matter is restored to ld CIT(A), but the assessee must comply the statutory requirement of section 249 of Act. 6. I have considered the submissions of both the parties and have gone through the orders of lower authorities carefully. I find that there is very limited dispute for consideration in the present appeal. There is no dispute that no return of income was filed by assessee. The assessment was completed under Section 144 in making addition of Rs. 20.00 lacs. The ld. CIT(A) dismissed the appeal in limine for want of deposit of tax under Section 249(4). No finding on merit was given by the ld. CIT(A). Considering the facts of the present case and the submissions of parties, I find that case of assessee falls under proviso to clause (b) of sub-Section (4) of Section 249. Therefore, the grounds of appeal raised by the assessee are restored back to the file of ld. CIT(A) for adjudication afresh after giving fair and reasonable opportunity of being heard. The assessee is also directed to move appropriate application for exemption of deposit of tax as proviso of clause (b) of Section 294(4). On filing such application, the ld. CIT(A) shall consider the said application sympathetically and would decide the grounds of appeal in accordance with law. In the result, the grounds of appeal raised by assessee are allowed for statistical purpose. 7. In the result, the appeal of assessee is allowed for statistical purposes only. ITA No.279/Srt/2022 Madresa Himayatul Islam Vs ITO(E) 5 Order pronounced in the open court on 02 nd January, 2023. Sd/- (PAWAN SINGH) JUDICIAL MEMBER Surat, Dated: 02/01/2023 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT(A) 4. CIT 5. DR 6. Guard File By order Sr.Private Secretary, ITAT, Surat