KHAIRABAD EYS HOSPITAL SOCIETY,KANPUR V. ITO(EXEMPTION), KANPUR

ITA 631/LKW/2024

AI Insights

The case involves Khairabad Eye Hospital Society appealing against the order of the Ld. Addl/JCIT(A)-1, Gurugram, which dismissed their appeal against the assessment order. The primary contention was the omission of grounds 4, 5, and 6 in the appellate order, which the assessee argued constituted a mistake as per the jurisdictional High Court's ruling. Additionally, the assessee challenged the summary disposal of the first three grounds and the non-appreciation of their written submissions. The Tribunal found merit in the assessee's arguments and directed a re-examination of all grounds by the Ld. CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31937 (ITAT-LUCKNOW)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Other Referred Cases: COMMISSIONER OF INCOME TAX VS. KESHAV FRUIT MART
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE; REVENUE EXPRESSES NO; SUNIL KUMAR RAJWANSHI
• Assessee Lawyers: PRADEEP SETH
• Keywords: Set aside; Principle of natural justice; Charitable institution
• Section: 250; 11; 13; 12; 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “SMC”, LUCKNOW BEFORE SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No.631/LKW/2024 (Assessment Year: 2013-14) Khairabad Eye Hospital Society 112/202, Swaroop Nagar, Kanpur-208002. v. Income Tax Officer (Exemption) Aayakar Bhawan, Civil Lines, Kanpur-208001. PAN: AAATK3893P (Appellant) (Respondent) Appellant by: Shri Pradeep Seth, Adv Respondent by: Shri Sunil Kumar Rajwanshi, Addl. CIT(DR) O R D E R PER ANADEE NATH MISSHRA, A.M.: (1) The present appeal has been filed by the assessee against the impugned appellate order dated 23.08.2024 passed by the Ld. Addl/JCIT(A)-1, Gurugram [“Addl/JCIT(A)”, for short], whereby the assessee’s appeal against the assessment order was dismissed. The grounds of appeal of the assessee are as under: - “1. That the Learned Addl./Jt.C.I.T.(Appeals)-1, Gurugram has erred in law and on facts in omitting to decide the assessee’s Grounds No. 4,5 and 6 as reproduced in the appellate order on pages 2 and 3 and in only dealing with first 3 grounds of appeal before him as admitted by him in para 4.1 of the appellate order. 2) That the failure to adjudicate grounds No. 4,5 and 6 of grounds of appeal before him constitutes a mistake as held by the jurisdictional High Court ie. Allahabad High Court in the case of COMMISSIONER OF INCOME TAX VS. KESHAV FRUIT MART reported in 199 ITR Page 771. 3) That the learned Addl./Jt.C.I.7.(Appeals) has further erred in law and on facts in disposing off even grounds No. 1,2 and 3 in a summary manner without deciding the grounds in the manner prescribed by the provisions of Section 250 Sub-Section (6) of the LT. Act 1961 Le. stating the facts regarding each ground of appeal, his decision on such ground and detailed reasons for decision in respect of each ground. ITA No.631/LKW/2024 Page 2 of 5 4) That he has further erred in law and on facts in not appreciating the assessee’s written submissions regarding the aforesaid grounds, as reproduced in the appellate order On pages 8, 9 and 10, as evident from’ para 4.2 of the order which makes only a casual reference to the road orders/judgments filed by assessee in only 3 lines while the written arguments run into more than 2 pages. 5) That without prejudice to the foregoing grounds the learned Addl./Jt.C.1.T.(Appeals) has further erred in law and on facts in not appreciating that the A.O. had invoked the provisions of Section 13 of the I.T. Act without discharging the onus of proving that the person specified U/s 13(3) of the I.T. Act derived any undue benefit from the Society which, under the law lay on the A.O. but only by stating that Smt. Manju Mahendra was a person covered by Section 13(3) of the 1I.T. Act. 6) That without prejudice to. the foregoing grounds the learned Addl./Jt.C.1.T.(Appeals) has further erred in law and on fact in confirming the computation of total income by A.O. at Rs.49,77,340/as against NIL income declared in the return by invoking the provisions of Section 13 of the 1.T. Act and denying the exemption U/s 11 and 12 of the Act. 7) That the learned Addl./Jt.C.I.T(Appeals) has further erred in violating of the order of the Income Tax Appellate Tribunal in the case of the assessee and confirmed in appeal of the Department by the Hon’ble Allahabad High Court and Hon’ble Supreme Court allowing exemption U/s 80G of the Act which could only be allowed if the assessee’s income had been exempt U/s 11 and 12 as it is a pre- condition for exemption under the aforesaid provisions vide sub section (5) Clause (i) of the Act. 8) That without prejudice to the foregoing grounds the learned Addl./Jt.C.1.T.(Appeals) has further erred in law and on facts in mechanically adopting the reasoning and finding in the assessment order ignoring the assessee’s written reply dated 16.12.2010 filed before the A.O. in Assessment Year 2008-09 filed at pages 30-31 of the paper book before C.I.T.(Appeals). 9) That without prejudice to the foregoing grounds the learned Addl./Jt.C.1.T.(Appeals) has further erred in law and on facts in confirming the addition made to the returned income of Rs.1,65,600/ignoring the provisions of the Act namely, Sections 11 and 13 which did not permit any addition to the returned income and only permitted denial of exemption U/s 11 if the provisi.s of Section 13 are applicable. 10) That without prejudice to the foregoing grounds the learned Addl./it.C.1.T.(Appeals) has further erred in law and on facts in not appreciating that the Income-tax Act does not permit any disallowance or addition to the returned income to arrive at a hypothetical income and that the above addition was also contrary to the C.B.D.T. Circular No.5P of 1968 dated 19.06.1968. 11) That without prejudice to the foregoing grounds the learned Addl./Jt.C.I.T.(Appeals) has further erred in law and on facts in confirming the computation of income of the assessee under the head ITA No.631/LKW/2024 Page 3 of 5 Business ignoring that the provisions of Section 14 of the I.T. Act have no application to the case of Charitable Institution as explained by the C.B.D.T. Circular Cited in the foregoing ground. 12) That without prejudice to the foregoing grounds the learned Addl/Jt.C.1.T.(Appeals) has further erred in law and on facts in confirming the addition of Rs.1,65,600/on account under charging of rent from Mrs. Manju Mahendra proprietor of M/s Optical Centre a person covered by Section 13(3) of the Act. 13) That the appellate order is arbitrary, unjust, excessive, bad in law and against the principles of natural justice.” (1.1) In the course of appellate proceedings in ITAT, the assessee filed a paper book containing the following particulars: - 2. At the time of hearing, the Ld. Counsel for assessee submitted that the Ld. Addl/JCIT(A) has not decided all the grounds of appeal as per Form No. 35. He further submitted that the impugned order of the Ld. Addl/JCIT(A) also lacks clarity and conviction. He submitted that all the issues in dispute should be restored back to the file of the Ld. Addl/JCIT(A) or to the file of ITA No.631/LKW/2024 Page 4 of 5 the Ld. CIT(A), as the case may be, with the direction to pass denovo order in accordance with law, after providing reasonable opportunity to the assessee. He further submitted that the direction should also be given to pass a speaking order on all the grounds of appeal that have been raised by the assessee in Form No. 35 in the appeal filed against the assessment order. The Ld. Sr. Departmental Representative for revenue expresses no objection to this. (2.1) In view of the foregoing and as representatives of both sides are in agreement with this, in the specific facts and circumstances of the present case, the impugned order of the Ld. Addl/JCIT(A) dated 23/08/2024 is set aside and the Ld. CIT(A) is directed to pass denovo order in accordance with law, after providing reasonable opportunity to the assessee. All grounds of appeal are treated as disposed of in accordance with the aforesaid directions. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 03/03/2025. Sd/- [ANADEE NATH MISSHRA] ACCOUNTANT MEMBER DATED: 03/03/2025 Vijay Pal Singh, (Sr. PS) ITA No.631/LKW/2024 Page 5 of 5 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard file By order //True Copy// Assistant Registrar "