PRABHAT ADARSH JAN KALYAN SAMITI,NEW DELHI V. ITO, WARD EXEMP 2(4), DELHI

ITA 5119/DEL/2024

AI Insights

The case involves Prabhat Adarsh Jan Kalyan Samiti, a registered society, which appealed against the orders of the CIT(A) and the AO concerning the assessment year 2016-17. The AO had disallowed 50% of the expenses claimed by the assessee and assessed an income, which was contested. The CIT(A) dismissed the appeal for non-prosecution as the assessee failed to comply with multiple notices. The assessee argued that their representative was seriously ill and unable to respond, and after his death, the appeal was filed belatedly. The ITAT found sufficient cause for the delay and condoned it, setting aside the previous orders and remanding the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471990 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2016-2017
• Other Referred Cases: Collector of Land Acquisition, Anantnag v. Mst. Katiji & Ors. 1987 AIR 1353, Praveen Sanjiv v. ITO [2024] 163 taxmann.com 640 (Madras)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside; Reasonable cause; Principle of natural justice; Benefit of exemption
• Section: 144; 142(1); 143(2); 250; 11; 12AA; 12

Judgement Text

"1 ITA NO. 5119/Del/2024 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’ NEW DELHI BEFORE SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 5119/Del/2024 Asstt. Yr: 2016-17 Prabhat Adarsh Jan Kalyan Samiti, Z-67, 88, West Patel Nagar, New Delhi-110008. v. Income-tax Officer, Ward Exemption 2(4), Delhi. \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No: AAAAP 8634 N Appellant .. Respondent Assessee represented by : Sh. Mayank Patwari, CA Department represented by: Sh. Dharamveer Singh, CIT(DR) Date of Hearing 20.02.2025 Date of Pronouncement 20 .02.2025 O R D E R PER RAMIT KOCHAR, AM: This appeal in ITA No. 5119/Del/2024, filed by the assessee for the Assessment Year 2016-17 has arisen from the order u/s 250 of the Income-tax Act, 1961 (“the Act”), passed by the learned CIT(A), National Faceless Appeal Centre 2 ITA NO. 5119/Del/2024 (NFAC), Delhi, dated 08.08.2023 in DIN & Order No. ITBA/NFAC/S/250/2023- 24/1054950187(1), which appeal in turn had arisen from the assessment order dated 23.12.2018 passed by the Assessing Officer u/s 144 of the Act. 2. Grounds of appeal raised by the assessee in memo of appeal filed with the Income Tax Appellate Tribunal, Delhi Benches, Delhi, read as under: “1. On the facts and circumstances of the case, the order passed by Ld. CIT(A) is bad both in eyes of law and on facts. 2. That the Ld. CIT(A) has erred in law and on facts by confirming the disallowance of exemption of Rs. 92,28,125/- made by the Ld. AO on adhoc basis without due verification. 2.1. That the Ld. CIT(A) has erred in law and on facts in not considering that the disallowance made by the Ld. AO are without any reasonable basis. 3. That the Ld. CIT(A) has erred in law as well as on facts in not revoking the order in which exemption u/s 11 of the Income Tax Act, 1961 was disallowed. 4. That the Ld. CIT(A) has erred in law and on facts in not annulling the assessment order, in which the Ld. AO asserted that the Appellant did not respond to the notice issued u/s 143(2) of the Act, which is incorrect as the Appellant did respond. 5. That the appellant reserves the right to add, modify, alter, amend or delete any of the grounds”. 3. At the outset learned counsel for the assessee submitted that this appeal is filed belatedly by the assessee with the ITAT by 395 days. It was submitted that appellate order of the CIT(A) was passed on 08.08.2023 which was received on 8.8.2023 and appeal was filed on 6.11.2024. It was submitted that the Chartered 3 ITA NO. 5119/Del/2024 Accountant Shri Santosh Kumar who was representing the assessee was suffering from serious ailments of liver and other diseases, and ultimately died on 13.09.2024.Death Certificate is enclosed in paper book bearing no. 0224- 12409208787 issued by MCD, Govt. of NCT of Delhi. It was submitted that the CA, Shri Santosh Kumar was suffering from serious ailments of liver& other diseases. Prescription issued by Dr. Mukesh Kumar dated 3.9.2023 was enclosed. The discharge summary issued by Medanta Hospital dated 12.01.2024 (admission dated 10.01.2024) is enclosed. Further, OPD consultation dated 3.6.2024 issued by Institute of Liver & Biliary Sciences is enclosed. It was submitted that ultimately Shri Santosh Kumar,CA died at Institute of Liver &Billary Sciences , Vasant Kunj, New Delhi, on 13.9.2024. Thus, it was submitted that Shri Santosh Kumar, CA was looking after the tax-affairs of the assesseeand representation with the Department. He died because of the serious ailment of liver and other diseases. It was prayed that the delay in filing of this appeal with ITAT belatedly by 395 days beyond the time prescribed u/s 253(3) be condoned. 3.2 Learned CIT-DR went through the documents filed by the assessee and submitted that the Department has no serious objection to the condonation of delay as sufficient cause is shown by the assessee and matter is left to the discretion of the Bench. 4 ITA NO. 5119/Del/2024 3.3 After hearing both the parties and perusing the material on record, we are of the considered view that the delay of 395 days in filing of this appeal with ITAT by the assessee belatedly beyond the time prescribed u/s 253(3) of the Act needs to be condoned. When technicalities are pitted against advancement of substantial justice, then the Courts will lean towards advancement of justice unless malice or negligence is at writ large. We do not find any malice on the part of the assessee in filing this appeal belatedy. The assessee is not likely to gain anything by filing this appeal belatedly. The assessee has shown sufficient /reasonable cause in filing this appeal belatedly with ITAT. Reference is drawn to the judgment and order of Hon’ble Supreme Court in the case of Collector of Land Acquisition , Anantnag v. Mst. Katiji&Ors. 1987 AIR 1353. Thus, in the interest of justice, we condone the delay of 395 days in filing of this appeal belatedly with the Tribunal beyond the time prescribed u/s 253(3), and proceed to adjudicate this appeal on merits. We order accordingly. 4. Brief facts of the case are that assessee filed its return of income declaring ‘Nil’ income claiming benefit of exemption u/s 11 & 12 of the Act. The case of the assessee was selected for framing scrutiny assessment and statutory notices u/s 143(2) and 142(1) were issued by the Assessing Officer but there was no compliance on the part of the assessee and an ex parte best judgment assessment was framed by the Assessing Officer u/s 144 wherein the AO disallowed 50% 5 ITA NO. 5119/Del/2024 expenses to the tune of Rs. 92,28,130/- , and income of Rs. 92,28,130/- was assessed by the AO in the hands of the assesseeas against the returned income of Nil. 5. Being Aggrieved, the assessee filed first appeal with the learned CIT(A). The assessee has in the Statement of facts(SOF) filed with the learned CIT(A) in Form no. 35 stated that the assessee had duly filed replies on 21.12.2018 and had requested for some time to file replies which was not granted by the AO, and the assessment order was passed by the AO u/s 144 on 23.12.2018. It is claimed that the assessee is a registered society incorporated under Society Registration Act, 1860 and was incorporated with an aim and object of social welfare of the public in large. It is claimed in SOF filed with ld. CIT(A) that the assessee is registered u/s 12AA of the Act , and the assessee challenged the disallowance of expenses amounting to Rs. 92,28,130/- by the AO. The CIT(A) during the course of appellate proceedings issued as many as four notices to the assessee, but there was no compliance on the part of the assessee, and an ex-parte appellate order was passed by the CIT(A) as in view of the CIT(A) there was no compliance on the part of the assessee and appeal was dismissed by ld. CIT(A) for non-prosecution. 6. Aggrieved, the assessee has filed this appeal before the Income Tax Appellate Tribunal. 6 ITA NO. 5119/Del/2024 7. Learned counsel for the assessee submitted that assessee had duly filed replies before the AO which were not considered by the AO . Attention was drawn to the screenshot of e-filing IT portal wherein the assessee had filed reply in the course of assessment proceedings and It was submitted that the AO erred in passing an ex-parte best judgment assessment u/s 144. It was submitted that during the course of appellate proceedings before the CIT(A) learned counsel for the assessee, CA Shri Santosh Kumar was not well as he was suffering from serious liver ailment and other diseases and ultimately dies. It has been submitted and prayed that the matter be set aside to the file of AO. The assessee has also filed paper book , in which registration certificate u/s 12AA is also enclosed at page no. 33 and prayer was made by ld. Counsel for the assessee to set aside the matter back to the file of AO. The assessee has also relied on the decision of Hon’ble Madras High Court in the case of Praveen Sanjiv v. ITO [2024] 163 taxmann.com 640 (Madras), and prayers are made that principles of natural justice are vitiated and matter can be set aside to the AO for de novo assessment. 8. The learned CIT(DR) fairly submitted that the matter may go back to the file of AO for de novo assessment. 9. We have considered rival contentions and perused the material available on record. We have observed that the assessee has filed return of income declaring Nil 7 ITA NO. 5119/Del/2024 income claiming exemption u/s 11 & 12 of the Act. The case of the assessee was selected for framing scrutiny assessment. The assessee claimed to have filed reply before the AO but the same was not taken cognizance by the AO and the best judgment assessment was framed u/s 144 by the AO, in which the AO disallowed 50% of the expenses to the tune of Rs.92,28,130/- and an income of Rs. 92,28,130/- was assessed by the AO in the hands of the assessee as against the returned income of Nil. Aggrieved, assessee filed first appeal with ld. CIT(A) which also stood dismissed by the CIT(A). The assessee in its statement of fact filed before ld. CIT(A) in form no. 35 has stated that the assessee has filed replies before the AO on 21.12.2018, but the same was not considered by the AO.. The CIT(A) issued as many as four notices but there was no compliance by the assessee. The learned CIT(A) on his part also did not make any inquiry with the AO nor any remand report was called by the learned CIT(A) from the AO. The learned CIT(A) did not make any inquiry as is contemplated in section 250(4) of the Act and dismissed the appeal of the assessee for non-prosecution by the assessee. The ld. CIT(A) is obligated to pass appellate order u/s 250 on merits specifying the point for determination, decisions thereof and reasons for the decision. Reference is drawn to provisions of Section 250(6). The ld. CIT(A) did not adjudicated the appeal of the assessee on merits as the issues arisen in the appeal filed by the assessee were not adjudicated by ld. CIT(A), and the appeal 8 ITA NO. 5119/Del/2024 stood dismissed by ld. CIT(A) for non prosecution. The assessee is also equally responsible for its woes . Keeping in view fairness to both the parties and in the interest of justice, we set aside the appellate order passed by ld. CIT(A) and the assessment order passed by the AO, and the matter is restored back to the file of AO for framing de-novo assessment after providing adequate opportunity of being heard to the assessee. Thus, orders of ld. CIT(A) and assessment order passed by the AO are set aside and matter is restored to the file of the AO for framing denovo assessment. The AO will admit evidences filed by the assessee in its defense in set aside proceedings. We clarify that we have not commented on the merits of the issue. We order accordingly. 10. Appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 20.02.2025, and reduced to writing and signed on 24.02.2025 Sd/- (VIMAL KUMAR) Sd/- (RAMIT KOCHAR ) JUDICIALMEMBER ACCOUNTANT MEMBER Dated: 24.02.2025. PS: *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT , Delhi 9 ITA NO. 5119/Del/2024 "