Atharva Vidyalaya, Managed by: Mother Care Charitable Trust, Vadodara V. The Income Tax Officer, Ward - Exemption, Vadodara

ITA 571/AHD/2022

AI Insights

The case involves Atharva Vidyalaya, a public trust managed by Mother Care Charitable Trust, which appealed against the order of the CIT(A), National Faceless Appeal Centre, Delhi. The appeal was concerning the Assessment Year 2016-17, where the CIT(A) confirmed an addition of Rs.37,80,060 made by the Assessing Officer (A.O.) under section 143(3) of the Income Tax Act, 1961. The addition was due to the non-allowance of the claim for excess application of income of earlier years. The Tribunal noted that the CIT(A)'s order was ex-parte and non-speaking, leading to the decision to remand the case for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129446 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 03-10-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 21-12-2022
• Laws Referred To: Income Tax Act, 1961, Bombay Public Trust Act, 1950
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Capital expenditure
• Section: 142(1); 143(2)

Judgement Text

ITA No.571/Ahd/2022 Assessment Year: 2016-17 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.571/Ahd/2022 Assessment Year: 2016-17 Atharva Vidyalaya, Managed by: Mother Care Charitable Trust, C.o. Harish B. Virk, 103, Vagheshwari Society-2, VIP Road, Karelibaug, Vadodara. [PAN – AAAAA 4671 J] Vs. The Income Tax Officer, Ward – Exemption, Vadodara. (Appellant) (Respondent) Assessee by Ms. Kinjal Shah, CA Revenue by Shri Sanjay Jain, Sr. DR Da te o f He a r in g 04.10.2023 Da te o f P ro n o u n ce m e n t 18.10.2023 O R D E R This appeal is filed by the Assessee against order dated 26.10.2022 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2016-17. 2. The Assessee has raised the following ground of appeal :- “1. The Commissioner of Income Tax (Appeals), has grossly erred in law and on facts of the case in confirming addition made by the A.O. for Rs.37,80,060/- in the assessment order passed u/s.143(3) of the IT Act without allowing set off of excess application of income by the Trust in earlier/preceding years.” 3. The assessee is a public trust and is registered under Bombay Public Trust Act, 1950. The trust is also registered under Income Tax Department and obtained registration u/s.12A of the Income Tax Act, 1961 on 17.01.2004. The object of the Trust is educational activity by running school in the name of ‘Atharva Vidhyalaya’. The assessee trust filed return of income for A.Y. 2016-17 in ITR – 7 on 05.10.2016 declaring total income at Rs. NIL. The case was selected for complete scrutiny to examine profit or gain from business shown by trust whether ITA No.571/Ahd/2022 Assessment Year: 2016-17 Page 2 of 3 the same is correct and whether the amount spent on charitable purposes is correctly shown in return of income. Notice u/s 143(2) was issued on 01.08.2017 and the same was emailed to the assessee. Notices u/s 142(1) along with questionnaire were issued on 22.06.2018, 20.08.2018 and 15.10.2018. The assessee submitted the details along with copy of audit report, balance sheet, Income & Expenditure account and other details. The Assessing Officer observed that during the year under consideration, the assessee trust received fees as income and trust has shown the gross receipts of Rs.1,72,61,340/-. The assessee trust also applied income of Rs.1,05,78,861/- for revenue expenditure & Rs.3,13,218/- for capital expenditure towards objects of the trust. The Assessing Officer further observed that the assessee Trust has shown the income from business or profession of Rs.61,96,955/- and claimed deduction in respect of income applied of Rs.61,96,955/-, net resulting to total income at Rs. NIL. After taking cognizance of the reply of the assessee, the Assessing Officer made disallowance of Rs.3,34,800/- towards capital expenditure and thus, made addition of Rs.37,80,060/- by not allowing claim of the assessee Trust for excess application of income of earlier years for Rs.61,96,955/-. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR filed an additional grounds stating therein that the CIT(A) has passed ex-parte order without giving opportunity of hearing to the assessee and the order is not speaking order. 6. The Ld. DR relied upon the assessment order and the order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the order passed by the CIT(A) is ex-parte non speaking order. Therefore, in the interest of justice, it will be appropriate to remand back the issues to the file of the CIT(A) for adjudicating the grounds of appeal therein on merit as per provisions of Income Tax Act, 1961. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. The appeal of the assessee is partly allowed for statistical purpose. ITA No.571/Ahd/2022 Assessment Year: 2016-17 Page 3 of 3 8. In result, appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open Court on this 18 th October, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 18 th October, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad