SHREE NIRMAL GYAN PRATISHTHAN,PUNE V. THE CIT (EXEMPTION), PUNE

ITA 2760/PUN/2024

AI Insights

The case involves Shree Nirmal Gyan Pratishthan, a public trust engaged in charitable activities, which appealed against the order of the CIT(A) confirming the assessment of income at Rs. 23,09,664 for the Assessment Year 2020-21. The trust had declared a nil income in its return, claiming deductions and exemptions under various sections of the Income Tax Act. The CIT(A) dismissed the appeal for non-prosecution as the trust did not comply with the notices due to the critical health condition of the trustee's mother. The Tribunal, considering the circumstances and the medical evidence provided, decided to set aside the CIT(A)'s order and remand the case for a fresh decision on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472591 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Other Referred Cases: B.N. Bhattacharjee and another 118 ITR 461 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MISS INDIRA R. ADAKIL
• Assessee Lawyers: SUHAS P. BORA
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 250; 143(1); 10(23C)

Judgement Text

" आयकर अपीलीय अधिकरण “एक सदस्य मामला” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, PUNE BEFORE MS. ASTHA CHANDRA, JUDICIAL MEMBER AND SHRI DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.2760/PUN/2024 निर्धारण वर्ा / Assessment Year : 2020-21 Shree Nirmal Gyan Pratishthan, 9, Bhagya Chintamani Society, Paud Road, Pune City, Kothrud, S.O., Pune, Maharashtra-411038 PAN : AAUTS5977N Vs. CIT(Exemption), Ward-1(1), Pune अपीलधर्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Suhas P. Bora Department by : Miss Indira R. Adakil Date of hearing : 29-01-2025 Date of Pronouncement : 31-01-2025 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 18.12.2024 of the Ld. Additional/Joint Commissioner of Income Tax (Appeals)-12, Delhi [“Addl./JCIT(A)”] pertaining to Assessment Year (“AY”) 2020-21. 2. The assessee has raised the following grounds of appeal :- “On facts and in law 1. The Ld. CIT(A) has erred in dismissing appellant's appeal and confirming the action of the Ld. ADIT, CPC assessing the total income at Rs. 23,09,664/- u/s 143(1) of the Act as against the returned income 'Nil' solely on the ground that the appellant has no evidence to substantiate the grounds taken and has not even once argued with any supporting, relevant and cogent arguments/averment. 2. The Ld. CIT(A) erred in dismissing the appellant's appeal without granting sufficient opportunity for hearing, violating the principles of natural justice. The order u/s 250 of the Act was passed just 12 days after issuing the first notice dated 06.12.2024, which is inadequate time for the appellant to prepare and present the case. 2 ITA No.2760/PUN/2024, AY 2020-21 3. The Ld. CIT(A) failed to appreciate that the order u/s 143(1) has been passed without issuing any notice for proposed adjustments, thereby violating the principles of natural justice. 4. The Ld. CIT(A) failed to appreciate that the Ld. ADIT, CPC determined the gross receipts of Rs. 23,09,664/- as the taxable income without allowing the deduction of expenditure claimed in the return of income of Rs. 19,67,431/- thereby taxing the gross receipts of the appellant instead of net income which is not permissible under the Income Tax Act. 5. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.” 3. Briefly stated, the facts of the case as mentioned by the assessee in Form No. 35 ‘Statement of Facts’ are that the assessee is a public trust registered under the Bombay Public Trust Act, 1950 as well as Society Registration Act, 1960. It is engaged in the charitable activity of running educational institution. The assessee filed its return of income for AY 2020-21 on 31.12.2020 declaring total income at Rs. Nil. During the relevant AY, the assessee received gross receipts of Rs.23,09,664/- against which it claimed expenditure of Rs.19,67,431/- and set apart amount of Rs.3,42,233/- as per the provisions of section 11(1)(a)/11(1)(b) or in terms of third proviso to section 10(23C) of the Act. The return was processed u/s 143(1) of the Income Tax Act, 1961 (the “Act”) on 25.12.2021 wherein the Ld. Assessing Officer, CPC Bangaluru (“AO”) computed the income at Rs.23,09,664/- and the tax liability including interest amounting to Rs.6,62,530/- on the basis of slab rates without assigning any valid reason and without considering the fact that the assessee has claimed exemption under the head “Exemption u/s 11/10(23C)(iv)/10(23C)(v)10(23C)(vi)/ 10(23C) (via)-Application of income for charitable or religious purposes or for the stated objects of the trust/ institution.” 4. Aggrieved, the assessee challenged the intimation order u/s 143(1) passed by the Ld. AO before the Ld. CIT(A). The Ld. CIT(A) in his appellate order noted that two notices of hearing dated 06.12.2024 and 12.12.2024 were issued to the assessee electronically in E-proceeding/ITBA facility requiring the assessee to submit the details along with supporting documents and evidence in respect of its claim. However, neither any 3 ITA No.2760/PUN/2024, AY 2020-21 compliance was received nor any adjournment was sought by the assessee. In the absence of any response to the said notices, the Ld. CIT(A) observed that the assessee appears to be not interested in pursuing this appeal. Relying on the decision of the Hon’ble Supreme Court in the case of B.N. Bhattacharjee and another 118 ITR 461 (SC), the Ld. CIT(A) dismissed the appeal of the assessee for non-prosecution by observing in para 4.4 and 4.5 of the appellate order as under : “4.4 It is pertinent to add here that laws assist those who are vigilant and not those who sleep over their rights. It means equity comes to the aid of the vigilant and not the slumbering. In all actions, suits and other proceedings at law and in equity, the diligent and careful plaintiff is favoured and prejudicial of him who is careless. Viewed thus, it is presumed that the appellant has no, further cogent reasoning or/and evidence to substantiate the grounds taken in this impugned appeal. It is trite that the onus is on person making the claim, and the primary responsibility/onus/burden for proving the claim made before the tax authorities (Assessing Officers/Appellate Authorities) lies with the assessee/appellant. In the present case, the appellant has not been able to even discharge the primary onus/burden statutorily & judicially cast upon him to substantiate the claims made in the grounds of appeal in spite of adequate time and opportunities given as brought out in the foregoing paragraphs. 4.5 It is, thus, evident that the appellant has no evidence to substantiate the grounds taken and is has not even once argued with any supporting, relevant and cogent arguments/averment, constraining me to, dismiss this appeal as no material change has been brought out by the appellant, to what was available before the AO. Therefore, order made decided ex- parte and appeal of the assessee is dismissed.” 5. Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto. 6. The Ld. AR submitted that the non-compliance before the Ld. CIT(A) was not intentional but has occurred due to the reason that the mother of the trustee, Ms. Vineeta Kapoor was hospitalized and was in a critical condition. Ms. Vineeta Kapoor, trustee was the primary caretaker of her mother and even after discharge of her mother, she was required to monitor her oxygen levels and other parameters constantly as her mother was on oxygen support due to which she missed checking her emails on a regular basis which led the notices remained uncomplied with. The Ld. AR submitted medical reports of the mother of the trustee in support thereof. He emphasized that the Ld. CIT(A) issued only two notices and proceeded to decide the appeal ex-parte for non-prosecution and therefore the 4 ITA No.2760/PUN/2024, AY 2020-21 assessee was not provided with adequate opportunity of hearing by the Ld. CIT(A) to present its case before him. He, therefore, prayed that the matter may be set aside to the file of the Ld. CIT(A) to decide the appeal afresh on merits after providing due opportunity of hearing to the assessee. 7. The Ld. DR had no objection to the above request of the Ld. AR. 8. We have heard the Ld. Representatives of the parties and perused the records. We find that the non-appearance before the Ld. CIT(A) was due to the reason of critical medical condition of the trustee’s mother which has been evidenced by furnishing of medical reports in support thereof. We also find that the Ld. CIT(A) issued only two notices in a short span of a week’s time, first notice on 06.12.2024 and another on 12.12.2024, fixing the date of hearing on 11.12.2024 and 17.12.2024 respectively. Admittedly, these notices were missed by the assessee due to the aforementioned reasons. In our considered opinion, the assessee had reasonable and sufficient cause for non-compliance of notices due to the reasons stated above. The appellate order reveals that the Ld. CIT(A) has applied the decision in B.N. Bhattacharjee and another (supra). No doubt, the Ld. CIT(A) may decide the appeal ex-parte where the assessee does not prosecute his appeal inspite of several opportunities. None-the-less, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereon and the reason for the decision. We observe that the Ld. CIT(A) has passed the order in concurrence of the order of Ld. AO without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act. 9. On the facts and in the circumstances of the case enumerated above, we deem it fit in the interest of justice and fair play to set aside the order of Ld. CIT(A) and restore the matter back to his file to adjudicate the issue(s) raised by the assessee on merits afresh and pass speaking order on merit after allowing reasonable opportunity of being heard to the assessee who shall provide the requisite support in terms of submitting the relevant 5 ITA No.2760/PUN/2024, AY 2020-21 documents/evidence as may be required/called upon on the appointed date without seeking adjournment under any pretext, failing which the Ld. CIT(A) shall be at liberty to pass appropriate order as per law. We order accordingly. 10. In the result, the appeal of assessee is allowed for statistical purpose. Order pronounced in the open court on 31st January, 2025. Sd/- Sd/- (Dr. Dipak P. Ripote) (Astha Chandra) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 31st January, 2025. रदि आदेश की प्रनिनलनप अग्रेनर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. धिभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, “एक सदस्य मामला” बेंच, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपत प्रदत// True Copy// आिेश नुस र / BY ORDER, िररष्ठ दनजी सदिि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune "