SARASWATHI EDUCATIONAL TRUST,SALEM V. ITO, WARD-1(1), SALEM

ITA 344/CHNY/2025

AI Insights

The case involves Saraswathi Educational Trust, which did not file a return of income for the assessment year 2015-16. The Income Tax Department, upon discovering a cash deposit of Rs.94,21,200 during the financial year 2014-15, reopened the case and issued notices to the Trust, which went unanswered. Consequently, an ex parte order was passed treating the entire deposit as unexplained income under Section 69A of the Income Tax Act, and a penalty was levied under Section 271(1)(c). The Trust appealed these decisions, but the appeals were initially dismissed due to non-participation. The Tribunal, considering the circumstances and the principles of natural justice, decided to set aside the previous orders and remand the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 313093 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Other Referred Cases: Tin Box Company vs CIT, [2001] 249 ITR 216 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KEERTHI NARAYANAN
• Assessee Lawyers: T.S. LAKSHMI VENKATRAMAN; F
• Keywords: Set aside
• Section: 271(1)(c)

Judgement Text

" आयकर अपीलीय अिधकरण, ‘ए’ Ɋायपीठ, चेɄई IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH, CHENNAI ŵी एबी टी वकŎ, Ɋाियक सद˟ एवं ŵी एस. आर. रघुनाथा, लेखा सद˟ क े समƗ BEFORE SHRI ABY T VARKEY, HON’BLE JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./ITA Nos.: 343 & 344/Chny/2025 िनधाŊरण वषŊ / Assessment Year: 2015-16 Saraswathi Educational Trust, Saraswathi Matriculation, Ulipuram Village and Post, Gangavalli Taluk, Salem – 636 118. vs. Income Tax Officer, Ward 1(1), No.3, Gandhi Road, Hasthampatti, Salem – 636 007. [PAN: AAETS-7058-N] (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से/Appellant by : Shri. T.S. Lakshmi Venkatraman, F.C.A. ŮȑथŎ की ओर से/Respondent by : Shri. Keerthi Narayanan, JCIT सुनवाई की तारीख/Date of Hearing : 22.04.2025 घोषणा की तारीख/Date of Pronouncement : 28.04.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER: These appeals by the assessee are filed against the orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2015-16, dated 13.12.2024 and 28.12.2024 respectively. 2. The assessee is a trust didn’t file return of income for the assessment year 2015-16. As per the information received from the Risk Management :-2-: ITA. Nos:343 & 344/Chny/2025 Strategy formulated by CBDT on Insight Portal maintained by the department found that the assessee has deposited cash in savings bank account to the tune of Rs.94,21,200/- during the Financial Year 2014-15. Accordingly, the case was reopened and issued statutory notice to the assessee. However, the assessee did not respond to any of the notices and hence, the Assessing Officer passed an exparte order (though it is mentioned as order u/s.147 r.w.s.144B of the Act) dated 04.03.2023 by treating the entire cash deposit of Rs.94,21,200/- as unexplained income under Section 69A of the Act and brought to tax. Further, the Assessing Officer also levied a penalty under Section 271(1)(c) of the Act to the tune of Rs.29,11,151/- by passing an order dated 09.09.2023. Aggrieved by the order of the Assessing Officer for both the quantum and penalty, the assessee filed appeals before the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. 3. At the outset, we observed that the Ld.CIT(A) has provided seven opportunities to the assessee to appear for hearings as detailed in paragraph 1 of the CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld. CIT(A) confirmed the order of Assessing Officer with available details by passing an order dated 13.12.2024. Similarly, the assessee did not respond for the appeal filed against the penalty order also, in spite of providing six opportunities by the ld.CIT(A). Hence, the ld.CIT(A) dismissed the appeal of the assessee by confirming the penalty levied by the Assessing Officer under Section 271(1)(c) of the Act. Before us, the ld.AR for the assessee prayed for providing one more opportunity before the Assessing Officer since both Assessing Officer as well as the ld.CIT(A) have passed the order without the :-3-: ITA. Nos:343 & 344/Chny/2025 participation of the assessee. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the Assessing Officer to complete the assessment proceedings effectively. 4. Per contra, the ld.DR submitted that both the Assessing Officer and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A). 5. We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the Assessing Officer has passed an exparte order by considering the information available with the department by bringing the entire credits of Rs.94,21,200/- as income of the Trust and the same has been dismissed by the ld.CIT(A) - NFAC due to non-participation of the assessee before the first appellate authority. Since, the assessee has failed to participate both before the Assessing Officer as well as the appellate authority, we levy the cost of Rs.5,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order. 6. In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of Assessing Officer by relying on the decision of the Hon’ble Supreme Court in the case of Tin Box Company vs CIT, [2001] 249 ITR 216 (SC) and direct AO to denovo frame the assessment order in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so. :-4-: ITA. Nos:343 & 344/Chny/2025 7. Since the penalty levied under Section 271(1)(c) is consequential, which has been confirmed by the ld.CIT(A) is also set aside and to decide afresh based on the fresh assessment to be made as directed above. 8. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open court on 28th April, 2025 at Chennai. Sd/- Sd/- (एबी टी वकŎ ) (ABY T VARKEY) Ɋाियक सद˟/Judicial Member (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखासद˟/Accountant Member चेɄई/Chennai, िदनांक/Dated, the 28th April, 2025 sp आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3.आयकर आयुƅ/CIT– Chennai/Coimbatore/Madurai/Salem 4. िवभागीय Ůितिनिध/DR 5. गाडŊ फाईल/GF "