OM J J SWA VISHWASHANTI DHAM NIRMAN SANSTHA,VERUL V. ITO EXEMPTION WARD, AURANGABAD

ITA 2090/PUN/2025

AI Insights

The case involves Om J J Swa Vishwashanti Dham Nirman Sanstha, a registered charitable trust, which appealed against the order of the Commissioner of Income-tax (Appeals) for the assessment year 2015-16. The primary contention was the erroneous dismissal of their appeal as withdrawn, which the trust claimed was done inadvertently by their representative. The trust argued that the CIT(A) should have adjudicated the appeal on its merits instead of dismissing it based on the withdrawal. The Tribunal noted that the CIT(A) has the obligation to decide the appeal on merits regardless of the withdrawal and set aside the CIT(A)'s order for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786320 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 05-09-2025
• Other Referred Cases: M/s. Deekay Gears Vs. ACIT, CIT Vs. Premkumar Arjundas Luthra(HUF), M Loganathan Vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP P SATHE
• Assessee Lawyers: PIYUSH BAFNA
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reasonable cause; Period of limitation; Charitable institution; Time period of passing order
• Section: 11; 12AA; 2

Judgement Text

" आयकर अपीलीय अधिकरण ”एस एम सी” न्यायपीठ पुणेमें। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC” :: PUNE BEFORE MS.ASTHA CHANDRA, JUDICIAL MEMBER AND DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपऩल सं. / ITA No.2090/PUN/2025 निर्धारण वषा / Assessment Year: 2015-16 Om J J Swa Vishwashanti Dham Nirman Sanstha, VISHWASHANTI DHAM NIRMAN SANSTHA, SHRI KSHETRA, VERUL, TAL KHULTABAD, AURANGABAD – 431101. V s The ITO, Exemption Ward, Aurangabad. PAN: AAAAO3641E Appellant/ Assessee Respondent / Revenue Assessee by Shri Piyush Bafna – AR Revenue by Shri Sandeep P Sathe – JCIT(DR) Date of hearing 06/10/2025 Date of pronouncement 31/10/2025 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by the Assessee against the order of ld.Commissioner of Income Tax(Appeal)[NFAC] passed under section 250 of the Income Tax Act, 1961 for the A.Y.2015-16 dated 28.08.2024 emanating from the Assessment Order passed under Printed from counselvise.com ITA No.2090/PUN/2025 [A] 2 section 143(1) of the Act, dated 27.03.2017. The Assessee has raised the following grounds of appeal : ―Erroneous Withdrawal of Appeal: 1. On the facts and in the circumstances of the case, the Ld. Commissioner of Income-tax (Appeals) erred in dismissing the appeal as withdrawn, despite the fact that the said withdrawal was made inadvertently and under a mistaken belief by the appellant's representative and hence, it is respectfully submitted that the appeal may kindly be restored to the file of the CIT(A) for fresh adjudication on merits in the interest of justice. Failure to Decide on Merits: 2. On the facts and in the circumstances of the case and without prejudice to any other ground, the Ld. Commissioner of Income-tax (Appeals) erred in not adjudicating the appeal on merits, especially when the issues involved substantial questions of law and fact including eligibility of deduction under section 11 of the Act Intimation u/s 143(1) Bad in Law: 3. On the facts and in the circumstances of the case and without prejudice to any other ground, the intimation issued under section 143(1) of the Act is without complying with jurisdictional conditions and hence, bad in law and thus, may please be quashed/ 4. On the facts and in the circumstances of the case and without prejudice to any other ground, the intimation issued under section 143(1) of the Act is bad in law as is non-speaking, devoid of any reasons, and issued without granting any opportunity of being heard and thus, liable to be quashed Eligibility of Deduction u/s 11: 5. On the facts and in the circumstances of the case and without prejudice to any other ground, the CPC has erred in disallowing the claim for exemption under section 11 of the Act, even though the appellant was a registered charitable institution under section 12AA of the Act and had duly applied the income towards its charitable objectives. Printed from counselvise.com ITA No.2090/PUN/2025 [A] 3 Capital Nature of Donations - Not Taxable: 6. On the facts and in the circumstances of the case and without prejudice to any other ground, the CPC has erred in not treating the donations received towards the building fund and corpus as taxable income, whereas such receipts are capital in nature. Erroneous Taxation of Gross Receipts by CPC 7. On the facts and in the circumstances of the case and without prejudice to any other ground, the CPC has grossly erred in taxing the gross receipts of the appellant without considering the corresponding application of income and expenses and without prejudice to the other grounds, even if any addition was warranted, the same ought to have been restricted to the net income, which in the present case was a loss and hence, accordingly, the addition of ₹45,02,150 made by the CPC is wholly unjustified and liable to be deleted General Ground: 8. The appellant craves leave to add, alter, amend, or withdraw any of the above grounds at the time of hearing, in the interest of justice.‖ 2. The Assessee filed an Affidavit for condonation of delay as under : ―AFFIDAVIT FOR CONDONATION OF DELAY I, Mr. Lakshmangiri Guru Mounagiriji, aged about 67 years, having Aadhaar No. 6555 2265 4680 and PAN EICPM9238N, residing at Shri Kshetra, Verul, Tal-Khultabad, Aurangabad - 431101, do hereby solemnly affirm and state as under: 1. That I am the trustee of OM J J SWA VISHWASHANTI DHAM NIRMAN SANSTHA, a registered charitable trust having PAN AAAAO3641E. I am involved in the overall management of the Ashram, Printed from counselvise.com ITA No.2090/PUN/2025 [A] 4 functioning under the spiritual guidance and aegis of our revered founder Maharaj Shantigiriji Maungiriji Moharaj 2. That although I am a trustee, I am primarily engaged in managing the day-to-day spiritual and charitable affairs of the Ashram and am not well-versed in technical tax and compliance matters. In all good faith and bona fide belief, I have been relying upon the advice of consultants engaged from time to time for statutory Compliance. 3. That the appeal in respect of AY 2015-16 was filed before the CIT (Appeals) on 31.05.2017. At that time, a different consultant was handling the matter. Over the intervening years, the consultants were changed. 4. It is also pertinent to mention that the email ID registered on the portal at the relevant time was [e-mail], which belonged to one of the Ashram devotees (\"Bhavik\") who, out of goodwill and without remuneration, coordinated with the consultant for compliance work and was also looking after this appeal matter. However, this devotee has not been associated with the trust for the last 2-3 years. Consequently, communications sent via email or portal went unnoticed. 5. It was only when a new consultant was appointed for FY 2024-25 for filing income tax returns somewhere around mid of June 2025, that the above matter came to light upon reviewing the e-filing portal. The appellate order, the appeal withdrawal issue, and the mistaken communication were brought to our notice only at that stage. 6. That it was only upon reading the appellate order dated 28.08.2024 passed by the CIT(A) that I came to know that a request for withdrawal of the said appeal was submitted during the course of appellate Printed from counselvise.com ITA No.2090/PUN/2025 [A] 5 proceedings. This came as a complete surprise, as the appellant had strong merits in its case and never intended to withdraw the appeal. 7. That due to changes in consultants and absence of continuity in records, the appellant is unable to trace the circumstances under which the said withdrawal request was filed in the year 2020. We have made best efforts to trace the records, but no such withdrawal application is even available on the current e filing portal 8. That there was initial uncertainty regarding the available remedy under the Income Tax Act. After seeking appropriate advice, it was informed that the only recourse was to approach the Hon'ble Income Tax Appellate Tribunal (ITAT) Accordingly, the appeal fees of Rs 10,000 was promptly paid on 09.07.2025. 9. That since the matter pertained to AY 2015-16 and due to the substantial time gap and change in consultants, we made our best efforts to gather all necessary documents, records, and submissions from past consultants. This collation process took considerable time. 10. That despite sincere efforts, we could not ascertain when and by whom the withdrawal application was filed. No document or record indicating the said withdrawal request is available on the portal or with the trust. 11. That, thereafter, in the meanwhile, appeal documents to be filed before Hon'ble Tribunal are prepared and now, this appeal is being filed. 12. That in the absence of any clarification, appellant has considered the date of the order Ed. CIT-Appeal as date of receipt of said order, albeit appellant came to know about passing of the said order only recently as explained in this affidavit. If time period is counted Printed from counselvise.com ITA No.2090/PUN/2025 [A] 6 therefrom, the appeal should have been filed by 27.10.2024. Thus, there is a delay of approximately 313 days from the expiry of the limitation period on 27 10.2024. It is submitted that the said delay is thus purely inadvertent, unintentional, and due to the above bona fide reasons and circumstances beyond the appellant's control. 13. That thus, I the undersigned for the appellant Trust, humbly prays that the above genuine facts and circumstances and bonafide reasons explained here above which are beyond the control of the appellant Trust may kindly be considered sympathetically and the delay in filing the appeal may please be condoned. It is also submitted that the delay in filing the appeal is non-deliberate and unintentional and has arisen in the light of genuine and bonafide facts and circumstances explained hereabove. 14. That in view of above, it is submitted that the delay in filing the appeal may please be condoned in the interest of justice. The appellant has a strong case on ments, non-condonation of delay would result in irreparable harm and denial of justice to the appellant and, the appellant Trust may suffer a grave injustice. It is also submitted that the assessee Trust may not be denied justice due to incorrect withdrawal of appeal before Ld. CIT-Appeal. 15. That it is therefore respectfully prayed that the delay in filing the appeal may kindly be condoned in the interest of substantial justice and the matter may kindly be taken up for adjudication of merit, for which appellant would remain ever grateful.‖ Delay : 2.1 There was a delay of 309 days in filing appeal before this Tribunal. We have perused the request of the Assessee and are Printed from counselvise.com ITA No.2090/PUN/2025 [A] 7 convinced that there is sufficient and reasonable cause for delay, accordingly, the Delay in condoned. Submission of ld.AR : 3. Ld.AR for the Assessee submitted that Assessee Trust had filed Return of Income for A.Y.2015-16 declaring income at Rs.NIL. The Centralized Processing Centre(CPC) passed an order u/s.143(1) of the Act, assessing total income at Rs.45,02,150/-. Assessee filed an appeal before the ld.CIT(A). Ld.CIT(A) dismissed the appeal of the Assessee stating that Assessee had withdrawn the appeal. Ld.AR submitted that as per Section 251 of the Act, the ld.CIT(A) do not have any power to dismiss the appeal based on withdrawal application. Ld.AR relied on the following case laws :  Mumbai ITAT : M/s. Deekay Gears Vs. ACIT, ITA No.2366/MUM/2018, 2019(2) TMI 1063 – ITAT MUMBAI.  Bombay High Court : CIT Vs. Premkumar Arjundas Luthra(HUF). Income Tax Appeal No.2336 of 2013, 2016 (5) TMI 290.  Madras High Court : M Loganathan Vs. ITO Tax Case (Appeal) Nos.361 to 363 of 2006, [2013] 350 ITR 373. 4. Ld.AR further invited our attention to the Affidavit of the Trustee. Ld.AR submitted that the Trustees do not understand Income Tax Provisions. In the Affidavit, it has been admitted that Printed from counselvise.com ITA No.2090/PUN/2025 [A] 8 they are not aware why and who filed the so-called withdrawal letter. Ld.AR submitted that in the interest of justice, ld.CIT(A) order may be set-aside to ld.CIT(A) for denovo adjudication on merits. 5. On merits, ld.AR submitted that CPC has not allowed any expenditure and they have taxed the entire receipts which is outside the provisions. Submission of ld.DR : 6. Ld.Departmental Representative(ld.DR) for the Revenue has not objected to setting aside to ld.CIT(A). Findings & Analysis : 7. We have heard both the parties and perused the records. We have carefully studied the Affidavit filed by the Trustee of the Assessee Trust. 8. On perusal of the order u/s.143(1), it is observed that entire income has been taxed and deductions claimed by the Assessee have been denied. 8.1 We have studied the decisions relied by the ld.AR. Printed from counselvise.com ITA No.2090/PUN/2025 [A] 9 8.2 Section 251 of the Act is reproduced as under : Powers of the 69[Joint Commissioner (Appeals) or the] Commissioner (Appeals). 251. (1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers— (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment : 70[Provided that where such appeal is against an order of assessment made under section 144, he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment;] …………. 8.3 Thus, as per Section 251 of the Act, Commissioner of Appeal may confirm, reduce, enhance or annul the assessment order. 9. The Hon’ble Bombay High Court has held in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF) Bombay)/[2017] 297 CTR 614 (Bombay) as under : Quote, “8.From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide Printed from counselvise.com ITA No.2090/PUN/2025 [A] 10 that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is coterminous with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non- prosecution as is evident from the provisions of the Act.” Unquote. 9.1 Thus, Hon’ble Bombay High Court has categorically held that CIT(A) has to decide the appeal on merit. Similarly, ITAT Mumbai Printed from counselvise.com ITA No.2090/PUN/2025 [A] 11 Bench in Deekar Gears Vs. ACIT in ITA No.2366/MUM/2018 has held as under : ―9. I have considered rival submissions and perused material on record. I have also applied my mind to the decisions relied upon by the learned Authorised Representative Undisputedly, in the course of proceedings before the first appellate authority the assessee had filed letter dated 19th September 2017, seeking withdrawal of the appeal. Taking note of the said letter, learned Commissioner (Appeals) dismissed assessee's appeal in limine without deciding it on merit. Therefore, the issue which arises for consideration before me is, whether as per the provisions of section 251 of the Act. learned Commissioner (Appeals) can permit withdrawal of the appeal by dismissing it in limine without deciding on merits. As per the provisions of section 251(1)(a) of the Act, the first appellate authority is conferred with the powers to decide an appeal against an order of assessment by confirming, reducing, enhancing or annulling the assessment. Even, the power to set-aside an assessment order was taken away from the first appellate authority by the amendment brought to the statute in Finance Act, 2001, w.e.f. 1st June 2001. Therefore, while deciding an appeal filed by the assessee under section 246A of the Act, learned Commissioner (Appeals) has to act within the parameters laid out in section 251(1)(a) of the Act. Interpreting the aforesaid statutory provision, the Hon'ble Jurisdictional High Court in Premkumar Arjundas Luthra (HUF) (supra) has held as under- \"8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the CIT(A) to dispose of Printed from counselvise.com ITA No.2090/PUN/2025 [A] 12 an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is co-terminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act Printed from counselvise.com ITA No.2090/PUN/2025 [A] 13 10. Similar view was expressed by the Hon'ble Madras High Court in M. Loganathan (supra). If the ratio laid down in the aforesaid decisions is carefully examined, it clearly emerges that learned Commissioner (Appeals), notwithstanding the fact that the assessee has filed an application seeking withdrawal of the appeal, is obliged and duty bound under the Act to decide the appeal on merits within the parameters of section 251(1)(a) of the Act. Thus, following the ratio laid down in the aforesaid decision, I have to hold that while dismissing assessee's appeal in limine without deciding on merit. learned Commissioner (Appeals) has not exercised his power in consonance with the provisions of section 251(1)(a) of the Act. Accordingly, I am inclined to set-aside the impugned order of the learned Commissioner (Appeals). However, since, the issues raised in the said appeal have not been decided on merit, I restore all the issues raised in the present appeal to the learned Commissioner (Appeals) for de novo adjudication Consequently, the appeal filed by the assessee before the learned Commissioner (Appeals) is restored back to its original position. It is open for the assessee to raise all such issues before the first appellate authority for contesting the assessment order passed by the Assessing Officer. Needless to mention, the learned Commissioner (Appeals) must afford reasonable opportunity of being heard to the assessee before deciding the appeal. With the aforesaid observations, the grounds raised are allowed for statistical purposes.‖ 9.2 The Hon’ble Madras High Court has also held the same. 9.3 Respectfully following the judicial precedence, we set-aside the order of ld.CIT(A) to ld.CIT(A) for denovo adjudication. The ld.CIT(A) shall decide the appeal on merits. The ld.CIT(A) shall Printed from counselvise.com ITA No.2090/PUN/2025 [A] 14 provide opportunity to the Assessee. The Assessee shall file necessary documents before the ld.CIT(A). Accordingly, grounds of appeal raised by the Assessee are allowed for statistical purpose. 10. In the result, appeal of the Assessee is allowed for statistical purpose. Order pronounced in the open Court on 31 October, 2025. Sd/- Sd/- ASTHA CHANDRA Dr.DIPAK P. RIPOTE JUDICIAL MEMBER ACCOUNTANT MEMBER पपणे / Pune; ददिधंक / Dated : 31 Oct, 2025/ SGR आदेशकीप्रनिनलनपअग्रेनषि / Copy of the Order forwarded to : 1. अपऩलधर्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. नवभधगऩयप्रनिनिनर्, आयकर अपऩलऩय अनर्करण, “एस एम सऩ” बेंच, पपणे / DR, ITAT, “SMC” Bench, Pune. 6. गधर्ाफ़धइल / Guard File. आदेशधिपसधर / BY ORDER, / / TRUE COPY / / Senior Private Secretary आयकर अपऩलऩय अनर्करण, पपणे/ITAT, Pune. Printed from counselvise.com "