The Gujarat Kelvani And Vaidyakiya Rahat Mandal, Vapi V. Income Tax Officer, Exemption Ward, Surat

ITA 673/SRT/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3995 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 31-01-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 05-10-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revenue expenditure; Set aside
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 673/Srt/2023 (Assessment Year 2016-17) (Physical hearing) The Gujarat Kelvani And Vaidyakiya Rahat Mandal, Zaroli Dhanoli, Post Via Bhilard, Dist.- Bulsar, Zaroli, GIDC, Vapi-396105. PAN No. AAATT 2805 J Vs. I.T.O., Exemption Ward, Anavil Business Center, Adajan, Hazira Road, Adajan, Surat-395007 (Gujarat) Appellant/ Assessee Respondent/ Revenue Assessee represented by Shri Bipin Jariwala, A.R. Department represented by Shri Vinod Kumar, Sr.DR Appeal instituted on 08/10/2023 Date of hearing 01/02/2024 Date of pronouncement 01/02/2024 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 (NFAC)/learned Commissioner of Income Tax (Appeals) [in short, the ld. CIT(A)] dated 08/08/2023 for the Assessment Year (AY) 2016-17. The assessee has raised following grounds of appeal: “1. On the facts and in the circumstances of the case as well as law on the subject, the ld. CIT(A) has erred in confirming the action of the Assessing Officer in considering all the donations received by the Appellant of Rs. 2,38,67,955/- treated as anonymous donation and brought it to tax under section 115BBE of the Act. 2. On the facts and in the circumstances of the case as well as law on the subject, the ld. CIT(A) has erred in confirming the action of the Assessing Officer in disallowing of Rs. 35,48,353/- i.e. 25% of the revenue expenditure of Rs. ITA No. 673/Srt/2023 The Gujarat Kelvani & Vaidyakiya Rahat Mandal Vs ITO (E) 2 1,41,93,415/- on the objects of the Trust as application of income for charitable purpose. 3. On the facts and in the circumstances of the case as well as law on the subject, the ld. CIT(A) has erred in confirming the action of the Assessing Officer in disallowing deduction u/s 11(1)(d) in respect of the Donation to Corpus. 4. On the facts and in the circumstances of the case as well as law on the subject, the ld. CIT(A) has not offered adequate opportunities to hear the case and passed ex parte order and hence the case may please be set aside and restored back to the CIT(A) or AO. On the facts and in the circumstances of the case as well as law on the subject, the ld. CIT(A) has erred in confirming the action of the Assessing Officer in charging interest u/s 234B and 234C of the Act as no income tax payable by the Trust. 6. It is therefore, prayed that the above addition may please be deleted as learned Members of Tribunal may deem it proper. 7. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.” 2. At the outset of hearing, the ld. AR of the assessee submits that there is mistake in the ground No. 2 of appeal and he has filed revised grounds of appeal which may be considered in place of original ground No. 2 of appeal. In the revised ground, he has just corrected the percentage of disallowance and figure of revenue expenditure, otherwise there is no change in the nature of ground. 3. The learned Senior Departmental Representative (ld. Sr. DR) for the revenue has no objection if revised ground of appeal is taken on record. 4. Considering the submissions of both the parties, revised ground No. 2 of appeal is taken on record and the original grounds of appeal is substituted by revised ground of appeal. The assessee has raised following substituted ground No.2 of appeal: “2. On the facts and in the circumstances of the case as well as law on the subject, the ld. CIT(A) has erred in confirming the action of the Assessing Officer in ITA No. 673/Srt/2023 The Gujarat Kelvani & Vaidyakiya Rahat Mandal Vs ITO (E) 3 disallowing of Rs. 14,19,342/- i.e. 10% of the revenue expenditure of Rs. 1,41,93,415/- on objects of the trust as application of income for charitable purpose.” 5. Rival submissions of both the parties have been heard and record perused. The ld. AR of the assessee submits that the ld. CIT(A) dismissed the appeal of assessee in an ex parte order. In fact, notice of appeal was not served on the assessee. The assessee has given e-mail address on Form-35 as [e-mail], however, the notice of hearing of appeal was sent on another e-mail address viz [e-mail]. The assessee came to know about passing of order when ITBA portal was searched about the status of appeal and find that their appeal had been dismissed on 08/08/2023. The assessee immediately filed the present appeal well within time. The ld. AR of the assessee submits that the assessee has good case on merit and will suffer prejudice, if the case is not adjudicated on merit. The ld. AR of the assessee submits that the assessee may be allowed at least one opportunity to explain the facts of case before the ld. CIT(A) 6. On the other hand, the ld. Sr. DR for the revenue submits that the assessee is a habitual defaulter even they have not made any compliance before the Assessing Officer. The Assessing Officer also made addition for want of proper submission. The assessee does not deserve any further leniency. 7. We have considered the submissions of both the parties and perused the record carefully. We find that the assessee while filing appeal before the ld. CIT(A), has given e-mail address viz; [e-mail], however, the ld. CIT(A)/NFAC issued notice at different e-mail address i.e. ITA No. 673/Srt/2023 The Gujarat Kelvani & Vaidyakiya Rahat Mandal Vs ITO (E) 4 [e-mail]. In absence of proper service of notice the assessee remained unrepresented. No fair and reasonable opportunity was given to the assessee before passing the order by ld. CIT(A). Though, we find that the ld. CIT(A) has reduced the disallowance of expenses, though, the ld. CIT(A) granted certain relief to the assessee in granting part relief on the disallowance of expenses. The facts remained the same that the assessee remained unpresented before the ld. CIT(A) for want of proper notice. Thus, considering the facts and circumstances of the case that substantial right of assessee are involved in the present appeal, therefore, grounds of appeal raised by assessee are restored back to the file of ld. CIT(A) to adjudicate all the grounds of appeal afresh. Needless to direct that before passing the order on merit, the ld. CIT(A) shall grant reasonable opportunity of hearing to the assessee. The assessee is also directed to be more vigilant in future and in making proper compliance and not to make any default in responding the notices issued by the ld. CIT(A). With this direction, the grounds of appeal raised by the assessee are allowed for statistical purposes. 8. In the result, this appeal of assessee is allowed for statistical purposes. Order announced in open court on 1 st February, 2024. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 01/02/2024 *Ranjan ITA No. 673/Srt/2023 The Gujarat Kelvani & Vaidyakiya Rahat Mandal Vs ITO (E) 5 Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Surat