The Suvarta Alliance Ministries Trust, Nandurbar V. The Assistant Commissioner of Income Tax, Exemption Circle , Aurangabad

ITA 706/PUN/2023

AI Insights

The case involves the Suvarta Alliance Ministries Trust, a charitable trust engaged in educational activities, which appealed against the order of the NFAC for the assessment year 2010-11. Initially, the trust's return of income was accepted, but later, the assessment was reopened, and additional income was assessed, denying the exemption under section 11 of the Income Tax Act. The NFAC upheld the Assessing Officer's decision, leading to the trust's appeal to the ITAT. The ITAT found procedural lapses in the NFAC's handling of the appeal and remitted the case for re-evaluation.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137649 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 21-08-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 11-06-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Opportunity of being heard
• Section: 147; 148; 11; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.706/PUN/2023 िनधाᭅरण वषᭅ / Assessment Year : 2010-11 The Suvarta Alliance Ministries Trust, Church Compound, Nandurbar- 425412. PAN : AABTS1941F Vs. ACIT, Exemption Circle, Aurangabad. Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of the National Faceless Appeal Centre, Delhi [‘NFAC’] dated 10.05.2023 for the assessment year 2010-11. 2. Briefly, the facts of the case are that the appellant is a charitable trust formed with the object of rendering educational activities. It was duly registered under the provisions of section 12A of the Income Tax Act, 1961 (‘the Act’). The Return of Income for the assessment year 2010-11 was filed on 20.09.2010 Assessee by : None Revenue by : Smt. Sonal Sonkavde Date of hearing : 22.08.2023 Date of pronouncement : 25.08.2023 ITA No.706/PUN/2023 2 disclosing Rs.Nil income. Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 07.12.2012 passed u/s 143(3) of the Act accepted the returned income. Subsequently, the assessment was reopened u/s 147 on 30.03.2017 by issuing notice u/s 148 of the Act on 30.03.2017. In response to the notice u/s 148, the appellant filed a letter dated 01.06.2017 stating that the original return of income filed on 20.09.2010 may be treated as return of income in response to notice u/s 148 of the Act. Against the said return of income, the assessment was completed by the Asst. Commissioner of Income Tax, Exemption Circle, Aurangabad (‘the Assessing Officer’) vide order dated 07.12.2017 u/s 143(3) r.w.s. 147 of the Act at a total income of Rs.35,35,157/- denying the exemption u/s 11 of the Act. While doing so, the Assessing Officer brought to tax the alleged unexplained expenditure of Rs.9,80,000/- + Rs.15,000/- incurred by the appellant trust on the payment made to M/s. Educomp Solution Ltd.. The Assessing Officer also brought to tax a sum of Rs.34,22,157/- by holding that the appellant trust should have charged additional fees for students in respect of computer course undertaken by the M/s. Educomp Solution Ltd.. ITA No.706/PUN/2023 3 3. Being aggrieved by the above additions, an appeal was filed before the ld. CIT(A), who vide impugned order confirmed the action of the Assessing Officer. 4. Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal. 5. When the matter was called on, the appellant trust moved an application seeking adjournment of hearing of the case on the ground that the Paper Book is under compilation. The said request of the assessee declined, as the matter was earlier posted on three occasions. Therefore, I proceed to dispose of the matter on merits after hearing the ld. Sr. DR. 6. I had gone through the order of the NFAC and find that the NFAC after extracting the written submissions filed by the appellant trust before him merely confirmed the findings of the Assessing Officer without expressing, as to how he had concurred with the findings of the Assessing Officer as well as without adverting to the written submissions filed by the appellant trust. Thus, it is crystal clear that the NFAC had disposed of the appeal without any independent application of mind on the issues in appeal in ignorance of the written submissions filed by the appellant trust. Thus, the ITA No.706/PUN/2023 4 order was passed by the NFAC in flagrant of violation of the principles of natural justice. Therefore, I am of the considered opinion that the matter requires remission to the file of the NFAC for fresh adjudication of the issues in appeal in accordance with law after affording due opportunity of being heard to the appellant trust. Thus, the grounds of appeal filed by the assessee stand partly allowed. 7. In the result, the appeal filed by the assessee stands partly allowed. Order pronounced on this 25 th day of August, 2023. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 25 th August, 2023. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “SMC” बᱶच, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.