Ranwati Balak Ram Foundation, Lucknow. V. Income Tax Officer(Exemption Ward), Lucknow., Lucknow.

ITA 55/LKW/2023

AI Insights

The case involves the Ramwati Balak Ram Foundation, a trust registered in Uttar Pradesh, which appealed against the order of the NFAC, Delhi, for the Assessment Year 2017-18. The trust had filed a return declaring nil income, claiming exemption under section 11(1)(a) of the Income Tax Act, 1961, which was initially granted. However, due to non-compliance in providing necessary documentation regarding corpus donations, the Assessing Officer treated these as anonymous donations and assessed the income accordingly. The trust's appeal to the First Appellate Authority was dismissed due to non-compliance, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123031 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-05-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 08-02-2023
• Other Referred Cases: CIT Vs. S. Chnniappa Mudaliar (1969) 74 TTR 41 (SC), Partha Mitra Cs ITO (2016) 161 ITD 25 (Kolkata-trib.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARISH GIDWANI
• Keywords: Non compliance; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘B’, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No.55/Lkw/2023 Assessment Year: 2017-18 Ramwati Balak Ram Foundation, 11/225, Faizabad Road, Indira Nagar, Lucknow 226016 PAN: AACTR 7467A Vs. Income Tax Officer, (Exemption Ward), Lucknow. (Appellant) (Respondent) O R D E R PER SUDHANSHU SRIVASTAVA, J.M.: This appeal has been preferred by the assessee against the order dated 23.12.2022 passed by the National Faceless Appeal Centre, (NFAC), Delhi for Assessment Year 2017-18. 2. The brief facts of the case are that the assessee is a trust registered with the office of the Sub Registrar, Uttar Pradesh. During the year under consideration, the return of income was filed declaring income at Rs. NIL after claiming its income exempt u/s. 11(1)(a) of the Income Tax Act, 1961 (hereinafter called ‘the Act’), which was granted on 27.01.2017. The assessee’s case was selected for complete scrutiny under the CASS guidelines and the statutory notices were issued. It was noticed that the assessee had shown gross receipts at Rs.15,51,700/- Appellant by Shri S.C. Agrawal, Advocate Respondent by Shri Harish Gidwani, DR Date of hearing 23/05/2023 Date of pronouncement 25/05/2023 I.T.A. No.55/Lkw/2023 2 and application of income at Rs.10,39,518/- and the excess of income over expenditure at Rs.4,99,633/-. The assessee had also received corpus fund of Rs.2,09,59,000/-. The Assessing Officer required the assessee to furnish list of donors with names, complete addresses, ID proofs and receipts but no compliance was made by the assessee with respect to any of the notices issued. In view of the non compliance by the assessee, the Assessing Officer proceeded to complete the assessment at income of Rs.2,09,59,000/- by treating the corpus donations as anonymous donations. 3. Aggrieved, the assessee approached the ld. First Appellate Authority and here also the assessee’s appeal came to be dismissed for non compliance. 4. Now, the assessee has approached this Tribunal, challenging the order of the NFAC by raising as many as ten grounds which are as under: “1. Because the impugned order dated 23.12.2022 passed in appeal CIT(A), Lucknow- 4/10089/2019-20 is illegal and arbitrary, hence liable to be set aside by the Hon'ble Tribunal. 2. Because the ld. CIT(A) has not taken in to consideration the factual as well as legal submissions made by the appellant/assessee as well as the Income Tax Rules framed under the Income Tax Act, 1961 while deciding the case against the appellant/assessee. 3. Because the appeal of the assessee/appellant was dismissed by the ld CIT(A) ex-parte in the absence of the assessee in limine without discussing the issues on merits despite the fact that the averments and grounds of the appeal were before the ld. CITIA) while it was deciding the appeal ex-parte against the appellant. 4. Because the order dated 23.12.2022 passed by the ld. CIT(A) which is under challenge is against the settled principles of law laid by various apex Courts in several cases. 5. Because the finding of the ld. CITIA) is not in accordance with Law. I.T.A. No.55/Lkw/2023 3 6. Because the assessee raised several grounds of appeal before the CIT(A) challenging the additions as were made by AP to the returned income, but the Id CITA) did not adjudicated these grounds on meri but rather dismissed the appeal of the assessee in limine ex-parte on the grounds that the assessee did not appear before the Id. CIT(A), without discussing the issues raised by the assessee in its appeal before the ld. CIT(A) on merit. 7. Because the Hon'ble Supreme Court of India in the case of CIT Vs. S. Chnniappa Mudaliar (1969) 74 TTR 41 (SC) and decision of ITAT, Kolkata (TM) in the case of Partha Mitra Cs ITO reported in (2016) 161 ITD 25 (Kolkata-trib.) it has been held that the Appellate authority is not permitted in Law to dismiss the grounds of appeal in limine, without discussing the issues on merit. 8. Because the ld. CIT(A) has overlooked the provision under Section 250(6) of the Income Tax Act, 1961, which specifically provides the procedure for deciding the appeal which says that, "The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision.", while deciding the case against the appellant/assessee. 9. Because the Id. CIT(A) has wrongly confirmed the addition of Rs.2,09,59,000/- under section 115BBZ and it is liable to be deleted. 10. The appellant craves leave to add/amend or delete grounds of appeal during the course of appellate proceedings.” 5. At the outset, the ld. Authorized Representative submitted that the assessee’s appeal had been dismissed in limine by the NFAC for the reason of the non compliance. It was prayed that the assessee be provided with one more opportunity to explain its case before the First Appellate Authority. 6. Per contra, the ld. Sr. DR opposed the prayer of the ld. AR and submitted that the assessee had been non compliant throughout and, therefore, did not deserve any further opportunity. I.T.A. No.55/Lkw/2023 4 7. We have heard both the parties and after having gone through the records, it is seen that it is a fact on record that no compliance had been made by the assessee before the Assessing Officer in spite of notices having been served from time to time. Further, the assessee did not cooperate during the First Appellate Proceeding also. However, the fact remains that the NFAC has dismissed the assessee’s appeal without going to the merits of the case and without passing a speaking order. In such a situation and on the facts of this case, we deem it expedient to restore the appeal to the office of the NFAC with the direction to adjudicate the issues at hand after providing adequate opportunity to the assessee. We also direct that should the assessee again be non compliant before the NFAC, the NFAC will be at complete liberty to adjudicate the issues at hand on merits, in accordance with law ex-parte qua the assessee. 8. In the final result, the appeal of the assessee stands allowed for statistical purposes. (Order pronounced in the open court on 25 /05/2023) Sd/- Sd/- ( ANADEE NATH MISSHRA ) (SUDHANSHU SRIVASTAVA) Accountant Member Judicial Member Dated: 25/05/2023 Aks Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. The CIT(A) 5. D.R., I.T.A.T., Lucknow Asstt. Registrar