Punjab Police Welfare Fund, Chandigarh V. ITO (Exemptions), Chandigarh

ITA 600/CHANDI/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1662 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-06-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 04-10-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUSUM BA NSAL
• Keywords: Capital receipt; Set aside
• Section: 147; 148; 12; 11; 142(1); 250

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B’ CHANDIGARH BEFORE: SHRI A.D.JAIN, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 600/CHD/2023 नधा रण वष / Assessment Year : 2012-13 Punjab Police Welfare Fund, Punjab Police Headquarter, Sector 9-A, Chandigarh. बनाम VS The ITO (Exemptions), Chandigarh. थायी लेखा सं./PAN /TAN No: AAAJP0753F अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by : Shri Tej Mohan Singh, Advocate राज व क ओर से/ Revenue by : Smt. Kusum Bansal, CIT, DR तार"ख/Date of Hearing : 12.06.2024 उदघोषणा क तार"ख/Date of Pronouncement : 13.06.2024 HYBRID HEARING आदेश/ORDER PER A.D.JAIN, VICE PRESIDENT This is assessee's appeal for assessment year 2012-13 against the order dated 08.08.2023 passed by the ld. Commissioner of Income Tax (Appeals) NFAC, Delhi [in short ‘the ld. CIT(A)]. 2. The assessee has raised the following grounds of appeal: ITA 600/CHD/2023 A.Y. 2012-13 2 “1. That the Ld. Commissioner of Income Tax (Appeals) has erred in passing an ex-parte order without affording a proper opportunity of hearing which is against the principles of natural justice and as such the order passed is arbitrary and unjustified. 2. That the Ld. Commissioner of Income Tax (Appeals) has further erred in upholding the reopening of the case resorting to the provisions of Section 148 in as much as there was no reason to believe that income had escaped assessment and as such the assessment framed is illegal, arbitrary and unjustified. 3. Without prejudice to the above, the Commissioner of Income Tax (Appeals) has further erred in upholding treating the interest income at Rs.l,10,40,262/- as against Rs.69,29,723/- declared resulting in an addition of Rs.41,10,539/- leading to increase in gross receipts for the purpose of calculation of exemption u/s 11 and 12 of the Act in utter disregard of the explanations rendered which is arbitrary and unjustified. 4. That the Ld. Commissioner of Income Tax(Appeals) has further erred in upholding the action of the Assessing Officer treating subscription fund amounting to Rs.3,01,40,131/- to be a revenue receipt as against capital receipt/voluntary contribution declared by the assessee leading to increase in gross receipts for the purpose of calculation of exemption u/s 11 and 12 of the Act in utter disregard of the explanations rendered which is arbitrary and unjustified. 5. That the ld. Commissioner of Income Tax (Appeals) has further erred in law as well as on facts in upholding the computation of shortfall for the purpose of claiming benefit of Section 11/12 at Rs.99,12,640/- after making the addition of Rs.41,10,539/- and Rs.3,01,40,131/- as challenged in Grounds 1 & 2 supra resulting in Gross receipts of Rs.4,12,47,094/- as against Rs.69,96,424/- declared which is illegal, arbitrary and unjustified.” 3. The brief facts of the case, as per the impugned order are that proceedings u/s 147 of the Income Tax Act, 1961 were initiated against the assessee and notice u/s 148 of the ITA 600/CHD/2023 A.Y. 2012-13 3 Act was issued on 25.03.2019. In response, the assessee filed its return of income on 29.05.2019 declaring ‘Nil’ income. During the course of assessment proceedings, notice u/s 142(1) of the Act and questionnaire, were issued on ITBA E-filing Portal on different dates to call for necessary information. In response, the assessee filed necessary information on ITBA Portal. The Assessing Officer, being not satisfied with the reply of the assessee, issued a notice u/s 142(1) of the Act alongwith detailed show cause on 05.12.2019. The assessee did not respond to the said notice, therefore, another opportunity was given to the assessee to file the reply on 10.12.2019. The assessee again failed to furnish any explanation. Accordingly, the Assessing Officer completed the assessment on the basis of record and made an addition of Rs.99,12,640/- vide order dated 20.12.2019. 4. Being aggrieved by the order passed by the Assessing Officer, the assessee went in appeal before the ld. CIT(A). Before ld. CIT(A), notices u/s 250 on e-portal were issued on various dates i.e., on 29.01.2021, 26.04.2022 and 25.07.2023, but no compliance was made and no written submissions or any other supporting document was filed by the assessee. ITA 600/CHD/2023 A.Y. 2012-13 4 Accordingly, the ld. CIT(A) passed an ex-parte order and confirmed the additions made by the Assessing Officer. 5. Aggrieved, the assessee is in appeal before this Tribunal. 6. The ld. DR could not rebut the aforesaid factual position. 7. We have heard the parties and have perused the material on record. It is found that various notices, fixing the dates of hearing, were issued through e-proceedings on e-filing Portal. The assessee has contended that the then Counsel of the assessee Shri Arvind Mehta, Advocate expired during the Covid Pandemic on 05.05.2021 and due to this fact, there was no representation before the ld. CIT(A). Copy of Death Certificate has been filed. The ld. Counsel for the assessee has requested that the matter may be sent back to the ld. CIT(A) and the assessee may be given opportunity to present its case. Merely uploading of information about the date of hearing on the Income Tax Portal is not an effective service of notice. The matter now stands covered by the decision of the Hon'ble jurisdictional High Court in the case of ‘Munjal BSU Centre of Innovation and ITA 600/CHD/2023 A.Y. 2012-13 5 Entrepreneurship, Ludhiana through its authorized signatory Shri Bharat Goyal Vs Commissioner of Income Tax (E), Chandigarh’, in CWP 21028-2023 (O&M), wherein, vide order dated 04.03.2024, their Lordships have held that the provisions of Section 282(1) of the Income Tax Act and Rule 127(1) of the Income Tax Rules, 1962, envisage that it is essential that before any action is taken, a communication of the notice must be in terms of these provisions; that these provisions do not make mention of communication to be “deemed” by placing the notice on the e-portal of the Department; that an pragmatic view has always to be adopted in these circumstances; that an individual or a company is not expected to keep the e-portal of the Department open all the times so as to have knowledge of what the Department is supposed to be doing with regard to the submissions of forms, etc.; and that the principles of natural justice are inherent in the Income Tax provisions and the same are required to be necessarily followed. Accordingly, considering the facts and circumstances of the case, the impugned order of the ld.CIT(A) is, hereby set aside with a direction to the ld.CIT(A) to decide the appeal of the assessee afresh, after giving proper and adequate ITA 600/CHD/2023 A.Y. 2012-13 6 opportunity to the assessee to present its case. The assessee, no doubt, shall cooperate in the fresh proceedings before the CIT(A). 8. The appeal of the assessee is allowed for statistical purposes. Order pronounced on 13.06.2024. Sd/- Sd/- (KRINWANT SAHAY) (A.D.JAIN ) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” आदेश क琉 灹ितिलिप अ灡ेिषत/ Copy of the order forwarded to : 1. अपीलाथ牸/ The Appellant 2. 灹瀄यथ牸/ The Respondent 3. आयकर आयु猴/ CIT 4. िवभागीय 灹ितिनिध, आयकर अपीलीय आिधकरण, च瀃डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड榁 फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar