NATHOO LALJI CHARITY TRUST,MUMBAI V. INCOME TAX OFFICER, EXEM. WARD 2(1), MUMBAI, MUMBAI

ITA 3925/MUM/2025

AI Insights

The case involves multiple appeals by the Nathoo Lalji Charity Trust against the orders of the CIT(A), National Faceless Appeal Centre, Delhi, concerning the assessment years 2018-19 and 2019-20. The appeals challenge the ex-parte orders and the substantive additions made to the trust's income, including the treatment of donations and interest income as anonymous donations, and the disallowance of capital losses. The tribunal noted procedural irregularities, such as the failure to use the correct email for communication, which led to the absence of the trust during hearings. Consequently, the tribunal decided to remit the cases back to the ITO for a fresh assessment, ensuring the trust is given a fair opportunity to present its case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717241 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Appeal Filed On: 31-05-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reasonable cause; Sale consideration of property below Jantri Value
• Section: 143(3); 50C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA Nos. 3907, 3923, 3924 and 3925/MUM/2025 Assessment Years: 2019-20 and 2018-19 Nathoo Lalji Charity Trust Opp. Santoshi Mata Temple, L. B. S. Marg, Mulund West, MUMBAI - 400080 (PAN : AAATN0468P) Vs. Income Tax Officer (Exem.), Ward 2(1), Mumbai (Appellant) (Respondent) Present for: Assessee : Shri Rakesh Joshi, CA Revenue : Shri Satyaprakash R.Singh, CIT DR. and Shri Leyaqat Ali Aafaqui, Sr. AR Date of Hearing : 05.08.2025 Date of Pronouncement : 12.08.2025 O R D E R PER BENCH: These four appeals filed by the assessee are against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi vide order nos. i) ITBA/NFAC/S/250/2024-25/1074748272(1), dated 20.03.2025 passed against the assessment order by National e-Assessment Centre Delhi, u/s. 143(3) r.w.s. 143(3A) & 143(3В) of the Income-tax Act (hereinafter referred to as the “Act”), dated 24.03.2021 for Assessment Year 2019-20. ii) ITBA/NFAC/S/250/2024-25/1074747459(1), dated 20.03.2025 passed against the assessment order by Printed from counselvise.com 2 ITA No. 3907/MUM/2025 and Ors. Nathoo Lalji Charity Trust. AY 2019-20 and 2018-19 National e-Assessment Centre Delhi, u/s. 143(3) r.w.s 144B of the Act, dated 19.04.2021 for Assessment Year 2018-19. iii) ITBA/NFAC/S/250/2024-25/1074747459(1), dated 20.03.2025 passed against the assessment order by National e-Assessment Centre Delhi, u/s. 143(3) r.w.s 144B of the Act, dated 19.04.2021 for Assessment Year 2018-19. iv) ITBA/NFAC/S/250/2024-25/1074748272(1), dated 20.03.2025 passed against the assessment order by National e-Assessment Centre Delhi, u/s. 143(3) r.w.s 143(3A) & 143(3В) of the Act, dated 24.03.2021 for Assessment Year 2019-20. 2. Grounds taken by the assessee are reproduced as under: ITA Nos. 3907/MUM/2025 1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in passing the exparte order, without providing sufficient opportunity of being heard to the appellant. 2. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in assessing the Total Income of the appellant at Rs.63,99,542/- as against the income of Rs.45.564/- declared in the Return of Income. 3. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as the Learned Assessing Officer has erred in not allowing the exemption claimed u/s.11 of the Income Tax Act, 1961, without considering the facts and circumstances of the case. 4. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in treating donations of Rs.19,49,756/- and Income from other than voluntary contribution (Interest income) of Rs. 44,04,222/- as alleged Income of the Trust. 5. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in not considering the application of funds of Rs.1,13,36,371/- for the object of the trust, without considering the facts and circumstances of case. ITA Nos. 3923/MUM/2025 Printed from counselvise.com 3 ITA No. 3907/MUM/2025 and Ors. Nathoo Lalji Charity Trust. AY 2019-20 and 2018-19 1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in passing the ex-parte order, without providing sufficient opportunity of being heard to the appellant. N.A 2. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in assessing the Total Income of the appellant at Rs.10,48,04,380/- as against the NIL Income declared in the Return of Income. N.A 3. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as the Learned Assessing Officer has erred in not allowing the exemption claimed u/s.11 of the Income Tax Act, 1961, without considering the facts and circumstances of the case. N.A 4. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in treating the Corpus Donation of Rs.5,72,19,157/- and Non-Corpus donation of Rs.6,71,255/- as anonymous donations and taxing the same u/s.115BBC of the Act, without considering the facts & circumstances of the case. Rs. 1,95,42,790/- 5. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in confirming the action of the Learned Assessing Officer in treating the interest income of Rs. 44,02,622/- as anonymous donation and taxing the same u/s.115BBC of the Act, without considering the facts & circumstances of the case 6. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in disallowing Long Term Capital loss of Rs.27,21,607/-, without considering the facts & circumstances of the case 7. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in making an addition of Rs.4,56,26,000/- as alleged short term capital gain earned on sale of immovable property by adopting the stamp duty value as sales consideration u/s. 50C of the Income Tax Act, 1961 without considering the facts & circumstances of the case ITA Nos. 3924/MUM/2025 1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in passing the ex-parte order, without providing sufficient opportunity of being heard to the appellant. Printed from counselvise.com 4 ITA No. 3907/MUM/2025 and Ors. Nathoo Lalji Charity Trust. AY 2019-20 and 2018-19 2. On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in passing the Penalty Order u/s.270A of the Income which is bad in law and void since in penalty notice under section 270A revenue had failed to specify limb \"under-reporting\" or \"misreporting\" of income, under which penalty proceedings had been initiated. 3. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in levying penalty of Rs.4,20,58,076/- u/s. 270A of the Income Tax Act, 1961, for under reporting of income which is in consequence of misreporting of income, without considering the facts & circumstances of the case. 4. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in partly confirming the penalty of Rs.79,95,553/- levied by the Learned Assessing Officer, u/s.270A of the Income Tax Act, 1961, for under reporting of income, without considering the facts & circumstances of the case. ITA Nos. 3925/MUM/2025 1. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred in passing the ex-parte order, without providing sufficient opportunity of being heard to the appellant. 2. On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of the Learned Assessing Officer in passing the Penalty Order u/s.270A of the Income Tax Act, 1961, which is bad in law and void since in penalty notice under section 270A revenue had failed to specify limb under which the penalty is initiate. 3. On the facts and circumstances of the case as well as in law, the Learned CIT(A) as well as Learned Assessing Officer has erred in levying penalty of Rs.39,63,644/- u/s. 270A of the Income Tax Act, 1961 for under reporting of income which is in consequence of mis reporting of income, without considering the facts & circumstances of the case. 3. These four appeals by the assessee are taken up together for adjudication by passing a consolidated order. Two appeals in ITA No. 3923 & 3907/Mum/2025 are against the assessment made u/s. 143(3) wherein common issues are involved. The other two appeals for the same AY i.e. ITA No.3924 & 3925/Mum/2025 are in respect of penalty- imposed u/s. 270A in relation to the aforesaid assessment completed Printed from counselvise.com 5 ITA No. 3907/MUM/2025 and Ors. Nathoo Lalji Charity Trust. AY 2019-20 and 2018-19 u/s. 143(3). We take up appeal for AY 2018-19 in ITA No. 3923/Mum/2025 to draw our facts and give our observations and findings which shall apply mutatis mutandis to the other appeal in ITA No. 3907/Mum/2025/ 4. Brief facts of the case are that assessee is a trust and filed its return of income on 13.03.2019 reporting total income at NIL. In the course of assessment proceedings Ld.AO sought details of donors and their identity in respect of corpus donation received by the assessee as well as other donations. Details were also called for in respect for investment made by the assessee in movable assets and other application of funds. Assessee could not furnish replies and comply with the requirements as the entire assessment proceeding was undertaken during the period of pandemic of Covid - 2019. In absence of details furnished by the assessee, assessment was completed based on material available on record with the following additions /disallowances: - a. Treating the corpus donation of Rs. 5,72,19,157/- and non- corpus donation of Rs. 6,71,255/- as anonymous donations and taxing the same u/s 115BBC of the Act. b. Treating the interest income of Rs. 44,02,622/- as anonymous donation and taxing the same u/s 115BBC of the Act. c. Disallowance of Long-Term Capital loss of Rs. 27,21,607/-. d. Addition on account of Short-Term Capital Gain of Rs. 4,56,26,000/-. 5. Aggrieved, assessee went in appeal before Ld. CIT(A). First appellate order is also ex-parte order as assessee failed to attend the dates fixed for hearing. In this respect, Ld. Counsel for the assessee pointed out that notices were sent on the email id of the erstwhile tax Printed from counselvise.com 6 ITA No. 3907/MUM/2025 and Ors. Nathoo Lalji Charity Trust. AY 2019-20 and 2018-19 consultant because of which assessee could not respond. Assessee had given new email id in Form No.35 at the time of filing appeal before Ld. CIT(A) which was not taken into account while issuing the notices for hearings. Ld. Counsel for the assessee also pointed out that issue involves making a reference to Department Valuation Officer (DVO) since one of the additions relates to making an addition u/s. 50C. Accordingly, a prayer was made to restore the matter back to the file of Ld. AO for de-novo meritorious adjudication of the additions/ disallowances made at the assessment stage. An assurance was given by the Ld. Counsel as to due compliance which shall be made once the matter is remitted back to the Ld. AO for expeditious disposal of the case. 5.1 Per contra, Ld. Sr DR objected and submitted to restore the matter to the file of ld. CIT(A) instead of ld. AO. 6. We have heard both the parties and perused the material on record. It is noted from the impugned assessment order that the entire proceedings were undertaken during the period of pandemic of Covid- 19 and there exists reasonable cause which prevented the assessee from making compliance with the requirements called for by the Ld. AO. Before the first appellate authority, assessee could not attend the hearings as the required email id was not used for sending the notices which resulted into ex-parte order. 6.1. Considering the prayer made by the Ld. Counsel and in the given set of facts and circumstances, we find it appropriate to remit the matter back to the file of Ld. AO for de-novo meritorious adjudications on the issues wherein additions/disallowances have been made. Needless to say, assessee be given reasonable opportunity of being heard so as to Printed from counselvise.com 7 ITA No. 3907/MUM/2025 and Ors. Nathoo Lalji Charity Trust. AY 2019-20 and 2018-19 substantiate the claim and furnish any other details and documents, if so required. On the objections raised by the Ld. Sr DR for remitting it to the file of Ld. CIT(A), we find that in the interest of justice and fair play, it would be more appropriate to remit the matter back to the file of Ld. AO instead of Ld. CIT(A), since remitting it before the Ld. CIT(A) would lead to multiplicity of proceeding on account of remand reports which may be required by the Ld. CIT(A). Also, one of the issues relates to addition made u/s. 50C which requires reference to DVO. Accordingly, prayer made by the Ld. Counsel is accepted and the matter is remitted back to the file of Ld. AO to pass speaking order on the merits of the case. Thus, grounds raised by the assessee are allowed for statistical purposes. In the result, appeal of the assessee is allowed for statistical purposes. 6.2. Similar issue exists in appeal for AY 2019-20. Accordingly, our observations in findings in appeal for AY 2018-19 apply mutatis mutandis to this year. In the result, appeal for this year is also allowed for statistical purposes. 7. The other two appeals which relate to imposition of penalty u/s. 270A are consequent to the assessment completed u/s. 143(3) for which the matters have been restored back to the file of Ld. AO in terms of our observations and findings in the above paragraphs. Accordingly, these two appeals are also remitted back to the file of Ld. AO so as to take up the issue relating to imposition of penalty u/s. 270A which shall be consequent to the de-novo meritorious adjudication of the assessment proceedings so remanded back to the Ld. AO. In the result, these two appeals relating to imposition of penalty are also allowed for statistical purposes. Printed from counselvise.com 8 ITA No. 3907/MUM/2025 and Ors. Nathoo Lalji Charity Trust. AY 2019-20 and 2018-19 8. In the result, all the four appeals of the assessee are allowed for statistical purposes. Order is pronounced in the open court on 12th August, 2025 Sd/- Sd/- (Amit Shukla) (Girish Agrawal) Judicial Member Accountant Member Dated: 12th August, 2025 Divya R. Nandgaonkar Stenographer Copy to: 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 5 Guard File CIT BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai. Printed from counselvise.com "