Aakriti, Faridabad V. DCIT, Faridabad

ITA 5371/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2838 (ITAT-DELHI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 21-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR TIWARI
• Keywords: Principle of natural justice
• Section: 12A; 10B; 11

Judgement Text

1 ITA NO. 5371/DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI R. S. SYAL, VICE PRES IDENT AND MS SUCHITRA KAMBLE, JUD ICIAL MEMBER ITA NO. 5371/DEL/201 7 ( A.Y 2014-15) AAKRITI HOUSE NO. J-159, SECTOR-10, DLF, FARIDABAD, HARYANA (APPELLANT) VS DCIT FARIDABAD HARYANA (RESPONDENT) APPELLANT BY SH. PRAMOD JAIN, CA RESPONDENT BY SH. VIJAY KUMAR TIWARI, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 07/06/2017 PASSED BY CIT(A) , FARIDABAD FOR ASSESSM ENT YEAR 2014-15. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT THE ORDER OF LD. AO AND LD. CIT (A) IS BAD IN LAW AND AGAINST FACTS OF THE CASE. 2. THAT THE LD. A.O. ERRED IN MAKING ADJUSTMENTS WHIL E PROCESSING RETURN U/S 143(1). 3. THAT THE LD. A.O. ERRED IN DENYING EXEMPTION CLAIM ED U/S 11 OF INCOME TAX ACT FOR NOT SUBMITTING AUDIT REPORT IN FORM 10B . 4. THAT THE LD. A.O. ERRED IN MAKING ADDITION OF RS. 13,49,450/- WITHOUT GIVING ANY OPPORTUNITY OF HEARING TO THE ASSESSEE T O EXPLAIN ITS CASE. DATE OF HEARING 19.03.2018 DATE OF PRONOUNCEMENT 21.03.2018 2 ITA NO. 5371/DEL/2017 5. THAT THE LD. CIT(A). ERRED IN NOT CONSIDERING THE DOCUMENTS/ DETAILS FURNISHED IN VARIOUS HEARINGS. 6. THAT THE LD. AO AND LD. CIT(A) ERRED IN VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. 7. THAT THE LD. CIT(A) ALSO ERRED IN NOT FOLLOWING VA RIOUS JUDGMENTS OF JURISDICTIONAL HIGH COURT AND IT AT. 8. THAT THE APPELLANT CARVES LEAVE TO ADD, ALTER, MOD IFY OR DELETE ANY OF THE GROUND OF APPEAL. 3. THE ASSESSEE IS A SOCIETY REGISTERED UNDER THE S OCIETY ACT, 1860 TO RUN AND MAINTAIN AN EDUCATION CENTRE FOR THE PURPOSE OF PROMOTION OF EDUCATION SPECIALLY FOR PHYSICALLY CHALLENGED AND NEEDY PERSO NS SPECIALLY CHILDREN SUFFERING FROM DISABILITIES AND TO PROVIDE THEM MED ICAL RELIEF TO CARRY ACTIVITIES FOR WELFARE AND REHABILITATION OF PHYSICALLY CHALLE NGED AND NEEDY PERSON NOT INVOLVING ANY ACTIVITY IN THE NATURE OF TRADE, COMM ERCE OR ANY COMMERCIAL ACTIVITIES AND ALSO NOT TO EARN ANY PROFIT. IN CO NSIDERATION OF THESE ACTIVITIES PARENTS OF THE PHYSICALLY AND MENTALLY DISABLED CHI LDREN PAY MONTHLY PAY ADMISSION CHARGES ETC. THE ASSESSEE IS ALSO REGIST ERED U/S 12A OF THE INCOME TAX ACT, 1961 VIDE ORDER DATED 20/07/2011 AND U/S 8 0G OF THE SAME ACT VIDE ORDER DATED 26/12/2011. THE ASSESSEE ALSO RECEIVED DONATION FROM GENERAL PUBLIC FOR THE ASSESSMENT YEAR 2014-15. THE ASSESSE E FILED ITS INCOME TAX RETURN ON 14/10/2014 DECLARING TOTAL TAXABLE INCOME NIL. BUT IT MISSED UPLOADING AUDIT REPORT IN FORM 10B U/S 12A (B). IN COME TAX RETURN WAS PROCESSED U/S 143(1) AND A DEMAND OF RS. 5,32,650/- WAS RAISED FOR NON FILING OF AUDIT REPORT. 4. BEING AGGRIEVED BY THE SAME, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT THE A.O HAS SIMPLICITO R RAISED DEMAND FOR NOT FILING AUDIT REPORT IN FORM 10B BUT THE AUDIT REPOR T DATED 31/7/2014 WAS 3 ITA NO. 5371/DEL/2017 ISSUED BY THE AUDITOR. THE SAME WAS MISSED BY THE ASSESSEE TO UPLOAD ON INCOME TAX WEBSITE. THE COMMUNICATION FROM CPC FOR NOT FILING OF AUDIT REPORT HAS ALSO GONE TO ITS SPAM FOLDER. BUT THE A SSESSEE UPLOADED THE AUDIT REPORT IN FORM 10B ON 8/2/2017. THUS, THE LD. AR S UBMITTED THAT THE ASSESSING OFFICER IS UNJUSTIFIED IN DENYING EXEMPTI ON U/S 11 WITHOUT GIVING ANY OPPORTUNITY OF HEARING TO THE ASSESSEE TO EXPLA IN ITS CASE. THUS, PRINCIPAL OF NATURAL JUSTICE WAS VIOLATED. THE LD. AR FURTHE R SUBMITTED THAT THERE WAS NO MALAFIDE INTENTION OF THE ASSESSEE FOR NON FILIN G OF AUDIT REPORT AND IT IS A GENUINE MISTAKE WHICH SHOULD HAVE BEEN CONSIDERED B Y THE CIT(A). THE LD. AR FURTHER SUBMITTED THAT BEFORE THE CIT(A) THE AUDIT REPORT WAS SUBMITTED BY THE ASSESSEE. 6. THE LD. DR SUBMITTED THAT THE CIT(A) HAS RIGHTLY DISMISSED THE APPEAL OF THE ASSESSEE AS THE RETURN WAS FILED ON 14/10/2014 AND THE AUDIT REPORT WAS UPLOADED IN FORM NO. 10B ON 8/2/2017 WHICH WAS A GA P OF AROUND TWO AND A HALF YEARS. THE LAST DATE OF FILING RETURN WAS 30/0 9/2014. EVEN THOUGH THE RETURN WAS FILED AFTER THE DUE DATE THE AUDIT REPOR T WAS NOT UPLOADED BY THE ASSESSEE AT THE TIME OF FILING OF RETURN. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS NOT SHUN AWAY ITS DEFAULT OF NON SUBMISSION OF AUDIT REPORT AT THE TIME OF FI LING THE RETURN. THE ASSESSMENT ORDER WAS PASSED ON 12/3/2016 AND THE AU DIT REPORT WAS FILED ON 8/2/2017, THE ASSESSEE HAS GIVEN THE GENUINE REASON THAT THE COMMUNICATION FROM CPA FOR NON FILING OF AUDIT REPORT WAS GONE TO ITS SPAM FOLDER AND THE SAME HAS TO BE ACCEPTED, AS MOST OF THE TIME SPAM F OLDER ARE NOT CHECKED. BESIDES THAT THE ASSESSEE HAS ALSO SUBMITTED ALL TH E DOCUMENTS BEFORE THE CIT(A). THE CIT(A) SHOULD HAVE CALLED FOR REMAND RE PORT FROM THE ASSESSING OFFICER AND THEN AFTER TAKING PROPER COGNIZANCE OF THE DOCUMENTS SHOULD HAVE DECIDED THE APPEAL OF THE ASSESSEE. IT WILL BE APP ROPRIATE AT THIS STAGE TO REMAND BACK TO THIS MATTER TO THE FILE OF CIT(A) FO R FRESH CONSIDERATION OF THE 4 ITA NO. 5371/DEL/2017 AUDIT REPORT AND THE CIT(A) SHOULD DECIDE ACCORDING LY. WE DIRECT THE CIT(A) TO CALL FOR REMAND REPORT FROM THE CONCERN ASSESSING O FFICER BEFORE ARRIVING AT THE DECISION. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OP PORTUNITY OF THE HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MARCH, 2018 . SD/- SD/- (R. S. SYAL) (SUCHITRA KAMBLE) VICE PRESIDENT JUDI CIAL MEMBER DATED: 21/03/2018 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 5371/DEL/2017 DATE 1. DRAFT DICTATED ON 20/03/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 20/03/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 21.03.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 2 1 .03.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.