JNANA JYOTHI REHABILITATION SOCIETY FOR DISABLED,HUBBALI V. INCOME TAX OFFICER, WARD-1, HUBBALLI

ITA 1478/BANG/2025

AI Insights

The case involves the Jnana Jyothi Rehabilitation Society for Disabled, a non-profit organization running a school for differently abled children, appealing against an order from the Learned Commissioner of Income Tax (Appeals) (Ld. CIT(A)). The appeal was related to an assessment order that disallowed 30% of the expenditure claimed by the society for the assessment year 2015-16, passed under section 144 of the Income Tax Act, 1961. The society argued that the disallowance was made ex-parte due to their non-compliance with notices, which was attributed to their operational challenges as a non-profit organization. The ITAT found sufficient cause for the delay in filing the appeal and agreed to set aside the case to the Ld. AO for a fresh assessment, considering the details of expenditure and the audit report submitted during the appeal proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716397 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 02-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: REVENUE; GANESH R GHALE; STANDING
• Assessee Lawyers: GIREESHA T.L
• Keywords: Opportunity of being heard
• Section: 144

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC’’BENCH: BANGALORE BEFORE Dr. DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI PRAKASH CHAND YADAV, JUDICIAL MEMBER ITA No.1478/Bang/2025 Assessment Year:2015-16 Jnana Jyothi Rehabilitation Society for Disabled, Old Soraba, P.O Old Soraba, Shivamogga-577429, Karnataka. PAN NO : AABTJ7999J Vs. Income Tax Officer, Ward-(1) Hubbali. APPELLANT RESPONDENT Appellant by : Sri Gireesha T.L, CA Respondent by : Sri Ganesh R Ghale, Advocate-Standing Counsel for Revenue Date of Hearing : 21.08.2025 Date of Pronouncement : 21.08.2025 O R D E R PER Dr. DIPAK P. RIPOTE, ACCOUNTANT MEMBER: This is an appeal filed by Jnana Jyothi Rehabilitation Society for Disabled against the order of the Learned Commissioner of Income Tax (Appeals) (NFAC) (in short “Ld. CIT(A)”) passed U/s. 250 of the Income Tax Act, 1961 (in short “the Act”) for Asst Year 2015- 16 on 03/12/2024 emanating from Assessment Order dated 31/10/2017 passed U/s. 144 of the Act. 2. Submissions of the Ld. AR: The Ld. AR invited our attention to the fact that there was a delay in filing the appeal before this Tribunal of 106 days. The Ld. AR took us through the Affidavit to explain the reason for the delay. Printed from counselvise.com Page 2 of 4 ITA No.1478/Bang/2025 Jnana Jyothi Rehabilitation Society for Disabled vs. ITO 3. The Ld. AR submitted that the assessee is running a school for differently abled children. There is a deficiency in the income and expenditure account. However, the Ld. AO passed an ex-parte order and made adhoc disallowance. The Ld. AR submitted that since it is a non-profit organization, one more opportunity may be given to file all the details before the Ld. Ld. AO. The Ld. AR submitted that the assessee receiving grant from Department of Empowerment of Differently Abled and Senior Citizens, Govt. of Karnataka. The Ld. AR submitted that the assessee had submitted details of expenditure to the appropriate authority of Govt. of Karnataka. 4. Submissions of Ld. DR: The Ld. DR fairly accepted that there was a sufficient cause for delay. The Ld. DR also agreed for setting aside the case to Ld. AO. 5. Findings and Analysis: We have heard both the parties and perused the records. In this case, the assessee-trust had filed return of income on 23/09/2015 declaring total income of Rs. NIL for Asst. Year 2015- 16. The assessee’s case was selected for scrutiny. Since the assessee failed to comply with the notices, the Ld. AO passed an order U/s. 144 of the Act disallowing 30% of the expenditure claimed. Printed from counselvise.com Page 3 of 4 ITA No.1478/Bang/2025 Jnana Jyothi Rehabilitation Society for Disabled vs. ITO 6. The Ld. CIT(A) confirmed the addition. Relevant para 5.1.1 of the order of the Ld. CIT(A) is reproduced here under: We have perused the submissions filed by the Ld. AR, assessment order and the order of the Ld. CIT(A). It is noted that the assessee’s books of accounts have been duly audited by the Chartered Accountant. As per the income and expenditure account for the year, there is a meager profit of Rs. 923/- only. It is also noted that the assessee’s income is mainly from grant received and expenditure seems to be towards running the school for mentally retarded children and differently abled children. The assessee has filed details of expenditure. 7. In this case, the Ld. AO has made adhoc disallowance of 30% of expenditure as the assessee could not file the details during the assessment proceedings. During the appeal proceedings before the ITAT, the assessee has filed the details of expenditure along with Printed from counselvise.com Page 4 of 4 ITA No.1478/Bang/2025 Jnana Jyothi Rehabilitation Society for Disabled vs. ITO audit report. In the interest of justice, we set-aside the assessment order to the Ld AO for denovo adjudication. Ld. AO shall provide a reasonable opportunity of being heard to the assessee. 8. In the result, appeal of the assessee is allowed for statistical purposes as indicated herein above. We condone the delay. Order pronounced in the open court on 21st August, 2025 Sd/- (Prakash Chand Yadav) Judicial Member Sd/- (Dr. Dipak P. Ripote) Accountant Member Bangalore, Dated: 21st August, 2025. OKK/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. Printed from counselvise.com "