SMT. DAKUBEN SAREMALJI SANCHETI (NADOL)CHARITABLE TRUST ,MUMBAI V. INCOME TAX OFFICER (EXEMPTION)WD 2(2), MUMBAI

ITA 3704/MUM/2025

AI Insights

The case involves the Smt. Dakuben Saremalji Sancheti (Nodal) Charitable Trust appealing against the order of the Commissioner of Income-tax (Appeals) which upheld an intimation under section 143(1) of the Income Tax Act, 1961. The intimation included an adjustment of Rs. 1,20,11,455 to the returned income, which the trust contested as being void ab initio due to the absence of proper notice and intimation as required under the Act. The trust argued that the adjustments were made without considering the impact of COVID-19 restrictions and their inability to file the return of income on time due to reasonable and sufficient cause. The Tribunal noted the trustee's lack of response to repeated notices due to personal constraints and the ongoing proceedings regarding the condonation of delay in filing the necessary audit report.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 788446 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 27-05-2025
• Other Referred Cases: M/s Chhabra Land and Housing Ltd. vs. B.N. Bhattachargee, 118 ITR 461 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANNAVARAMKOSURI
• Assessee Lawyers: BHAVIK CHHEDA; AW
• Keywords: Condonation of delay; Set aside; Principle of natural justice; Charitable institution
• Section: 10B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA No. 3704/MUM/2025 Assessment Year: 2020-21 Smt. Dakuben Saremalji Sancheti (Nodal) Charitable Trust, C/o G.P. Mehta & Co. CAS, 807, Tulsiani Chambers, Nariman Point, Mumbai-400021. Vs. ITO (Exemption) WD 2(2), MTNL Building, Pedder Road, Mumbai-400026. PAN NO. AAATD 7192 E Appellant Respondent Assessee by : Mr. Bhavik Chheda, Adv. a/w Mr. G.P. Mehta, CA Revenue by : Mr. Annavaram Kosuri, Sr. DR Date of Hearing : 03/11/2025 Date of pronouncement : 26/11/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 03.03.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2020-21, raising following grounds: 1. The orders passed by the learned lower authorities are bad in law and bad in facts. Printed from counselvise.com 2. The learned lower authorities have grossly erred in upholding the validity of the Intimation issued u/s 143(1) of the I.T. Act, 1961, even though no intimation, (notice) as provided by the, 1st & 2nd Proviso below Sec. 143 (1) of the I.T. Act, 1961, was issued 3. The Intimation issued u/s 143(1) of the I. T. Act, 1961, is ab-initio void, inasmuch as, impugned adjustment Rs. 1,20,11,455/ the mandatory provisions of law. 4. The learned lower considering the prevalent circumstances emerging out of Covid restrictions and have further erred in adding a sum of Rs.1,20,11,455/ 5. The learned lower authorities have grossly erred in not considering, prior to making of impugned addition of Rs.1,20,11,455/ reasonable and sufficient cause in filing return of income belatedly. 6. Having regard to the facts of the case, provisions of law and judicial proposition income is wholly unwarranted 2. We have heard the learned representatives of the parties and have carefully perused the material available on record. The essential facts, briefly stated, are that the prese of the second round of proceedings before the Ld. CIT(A). In the first round, the matter had been restored to the file of the CIT(A) by the Tribunal vide order dated 31.05.2023 in ITA No. 3202/2022 with a direction for fresh adjudicati 2.1 In the course of the rehearing, the Ld. CIT(A) issued several notices, as duly recorded in paragraph 4 of the impugned order. However, save for a solitary communication dated 26.12.2024, the assessee did not furnish the information requisitioned. T CIT(A) specifically called upon the assessee to produce evidence Smt. Dakuben Saremalji Sancheti (Nodal) The learned lower authorities have grossly erred in upholding the validity of the Intimation issued u/s 143(1) of the I.T. Act, 1961, even though no intimation, (notice) as provided by the, 1st & 2nd Proviso below Sec. 143 (1) of the I.T. Act, 1961, was issued The Intimation issued u/s 143(1) of the I. T. Act, 1961, is initio void, inasmuch as, impugned adjustment Rs. 1,20,11,455/- without issuing an intimation is contrary to the mandatory provisions of law. The learned lower authorities have grossly erred in not considering the prevalent circumstances emerging out of Covid restrictions and have further erred in adding a sum of Rs.1,20,11,455/- to the returned income. The learned lower authorities have grossly erred in not idering, prior to making of impugned addition of Rs.1,20,11,455/- that the appellant was prevented by a reasonable and sufficient cause in filing return of income belatedly. Having regard to the facts of the case, provisions of law and judicial propositions, impugned adjustment to returned income is wholly unwarranted & uncalled for. We have heard the learned representatives of the parties and have carefully perused the material available on record. The essential facts, briefly stated, are that the present appeal arises out of the second round of proceedings before the Ld. CIT(A). In the first round, the matter had been restored to the file of the CIT(A) by the Tribunal vide order dated 31.05.2023 in ITA No. 3202/2022 with a direction for fresh adjudication. In the course of the rehearing, the Ld. CIT(A) issued several notices, as duly recorded in paragraph 4 of the impugned order. However, save for a solitary communication dated 26.12.2024, the assessee did not furnish the information requisitioned. T CIT(A) specifically called upon the assessee to produce evidence Smt. Dakuben Saremalji Sancheti (Nodal) Charitable Trust 2 ITA No. 3704/MUM/2025 The learned lower authorities have grossly erred in upholding the validity of the Intimation issued u/s 143(1) of the I.T. Act, 1961, even though no intimation, (notice) as provided by the, 1st & 2nd Proviso below Sec. 143 (1) of the The Intimation issued u/s 143(1) of the I. T. Act, 1961, is initio void, inasmuch as, impugned adjustment Rs. without issuing an intimation is contrary to authorities have grossly erred in not considering the prevalent circumstances emerging out of Covid restrictions and have further erred in adding a sum of The learned lower authorities have grossly erred in not idering, prior to making of impugned addition of that the appellant was prevented by a reasonable and sufficient cause in filing return of income Having regard to the facts of the case, provisions of law s, impugned adjustment to returned for. We have heard the learned representatives of the parties and have carefully perused the material available on record. The nt appeal arises out of the second round of proceedings before the Ld. CIT(A). In the first round, the matter had been restored to the file of the CIT(A) by the Tribunal vide order dated 31.05.2023 in ITA No. 3202/2022 with a In the course of the rehearing, the Ld. CIT(A) issued several notices, as duly recorded in paragraph 4 of the impugned order. However, save for a solitary communication dated 26.12.2024, the assessee did not furnish the information requisitioned. The Ld. CIT(A) specifically called upon the assessee to produce evidence Printed from counselvise.com regarding any application made before the Commissioner of Income tax (Exemption) seeking condonation of delay in filing Form No. 10B. The assessee failed to respond to this requirement absence of any order condoning the delay in filing the mandatory audit report, the Ld. CIT(A) proceeded to dismiss the appeal, primarily on account of non the order of the Ld. CIT(A) have already been reproduce hereinabove. The relevant finding of the Ld. CIT(A) is reproduced as under: “4. DISCUSSION, REASON & DECISION: The matter was set aside to the undersigned by the ITAT Order vide ITA No. 3202 of 2022 dated 31/05/2023. The ITAT remanded the issue to the fi During this appellate proceeding, hearing notices were issued on 01/11/2023, 04/04/2024, 24/06/2024, 04/10/2024, 08/11/2024, 17/12/2024, 09/01/2025 and 28/01/2025 respectivelly for submission in support of grounds t appellant. In response to these notices, the appellant responded only once on 26/12/2024 stating as under: \"The appellant Smt. DAKUBEN SAREMALJI SANCHETI (NADOL) CHERITABLE trust is in receipt of notice dated 17/12/2024 bearing DIN: ITBA/NFAC/F fixing the date of hearing on 26/12/2024 in respect of appeal no: NFAC/2019-20/10296220 FPR ASST. YEAR: 2020 connection we have to submit that the appellant has not received any communication from the Hon'ble CIT (e condonation of delay in filing audit report in form 10b and notice of accumulation in form 10. The central board of direct taxes vide circular no: 11/2024 dated 01/10/2024 have delegated power of condonation of delay to various autho application for condonation of delay is pending and a favorable consideration of application is expected for the assessment year 2020-21. The due date for filing return of income and audit reports was extended upto 15/02/2021 on account Smt. Dakuben Saremalji Sancheti (Nodal) regarding any application made before the Commissioner of Income tax (Exemption) seeking condonation of delay in filing Form No. 10B. The assessee failed to respond to this requirement absence of any order condoning the delay in filing the mandatory audit report, the Ld. CIT(A) proceeded to dismiss the appeal, primarily on account of non-compliance. The relevant extracts of the order of the Ld. CIT(A) have already been reproduce The relevant finding of the Ld. CIT(A) is reproduced as 4. DISCUSSION, REASON & DECISION: The matter was set aside to the undersigned by the ITAT Order vide ITA No. 3202 of 2022 dated 31/05/2023. The ITAT remanded the issue to the file of CIT(A) for its fresh adjudication. During this appellate proceeding, hearing notices were issued on 01/11/2023, 04/04/2024, 24/06/2024, 04/10/2024, 08/11/2024, 17/12/2024, 09/01/2025 and 28/01/2025 respectivelly for submission in support of grounds taken by the appellant. In response to these notices, the appellant responded only once on 26/12/2024 stating as under: \"The appellant Smt. DAKUBEN SAREMALJI SANCHETI (NADOL) CHERITABLE trust is in receipt of notice dated 17/12/2024 bearing DIN: ITBA/NFAC/F/APL_4/2024-25/1071288525(1) fixing the date of hearing on 26/12/2024 in respect of appeal no: 20/10296220 FPR ASST. YEAR: 2020-21. In this connection we have to submit that the appellant has not received any communication from the Hon'ble CIT (exemption) in regard to condonation of delay in filing audit report in form 10b and notice of accumulation in form 10. The central board of direct taxes vide circular no: 11/2024 dated 01/10/2024 have delegated power of condonation of delay to various authorities. Appellants application for condonation of delay is pending and a favorable consideration of application is expected for the assessment year 21. The due date for filing return of income and audit reports was extended upto 15/02/2021 on account Smt. Dakuben Saremalji Sancheti (Nodal) Charitable Trust 3 ITA No. 3704/MUM/2025 regarding any application made before the Commissioner of Income- tax (Exemption) seeking condonation of delay in filing Form No. 10B. The assessee failed to respond to this requirement. In the absence of any order condoning the delay in filing the mandatory audit report, the Ld. CIT(A) proceeded to dismiss the appeal, compliance. The relevant extracts of the order of the Ld. CIT(A) have already been reproduced The relevant finding of the Ld. CIT(A) is reproduced as The matter was set aside to the undersigned by the ITAT Order vide ITA No. 3202 of 2022 dated 31/05/2023. The ITAT le of CIT(A) for its fresh adjudication. During this appellate proceeding, hearing notices were issued on 01/11/2023, 04/04/2024, 24/06/2024, 04/10/2024, 08/11/2024, 17/12/2024, 09/01/2025 and 28/01/2025 aken by the appellant. In response to these notices, the appellant responded \"The appellant Smt. DAKUBEN SAREMALJI SANCHETI (NADOL) CHERITABLE trust is in receipt of notice dated 17/12/2024 25/1071288525(1) fixing the date of hearing on 26/12/2024 in respect of appeal no: -21. In this connection we have to submit that the appellant has not received xemption) in regard to condonation of delay in filing audit report in form 10b and notice of accumulation in form 10. The central board of direct taxes vide circular no: 11/2024 dated 01/10/2024 have delegated power rities. Appellants application for condonation of delay is pending and a favorable consideration of application is expected for the assessment year 21. The due date for filing return of income and audit reports was extended upto 15/02/2021 on account of covid. Printed from counselvise.com Even after 15/02/2021 government restrictions for transportation / movement of general public continued. Hence, appellant staff could not attend the office and do the needful. Considering all the surrounding circumstances hon'ble supreme court in the case of cognizance for extension of limitation 441 ITR 0722 extended the due date upto 28/02/2022. In case of appellant the audit report in 10B was filed on 25/03/2021 and form 10 also filed on 25/03/2021. Return of income was filed on 27/03/2021. Thu before the time line set by the hon'ble supreme court. In view of the above stated facts, we request your honor to kindly grant us some time to peruse the condonation application before the hon'ble Commission However, this office issued a letter dated 09/01/2025 and also a reminder for the same on 28/01/2025 for copy of application made to the CIT(Exemption) which is as follows: \"As per your submission dated 26.12.2024 that you had applied for condonation in respect of delay in filling Audit Report in form 10B. You are requested to furnish the copy of it to this office.\" But, the appellant has failed to comply with the notices. Hence, on being non- proper submission, the claim of the appellant is rejected. 4.2 The Hon'ble ITAT in ITA No. 1025 A.Y. 2002-03 in the case of M/s Chhabra Land and Housing Ltd. after following the decisi of B.N. Bhattachargee, 118 ITR 461 (SC) held that the appeal does not mean merely fifing, of the appeal but effectively pursuing it. 4.3 As per Tax Payer's Charter, the Income Tax Department expects from taxpayers 1. Tax payer is expected to be aware of his compliance obligations under tax law and seek help of department if needed. 2. Tax payer is expected to make submission as per tax law in timely manner. 4.4 In the result, the appeal of the appellant is hereby \"dismissed.\" Smt. Dakuben Saremalji Sancheti (Nodal) Even after 15/02/2021 government restrictions for transportation / movement of general public continued. Hence, appellant staff could not attend the office and do the needful. Considering all the surrounding circumstances hon'ble supreme the case of cognizance for extension of limitation 441 ITR 0722 extended the due date upto 28/02/2022. In case of appellant the audit report in 10B was filed on 25/03/2021 and form 10 also filed on 25/03/2021. Return of income was filed on 27/03/2021. Thus, all the statutory compliances were made well before the time line set by the hon'ble supreme court. In view of the above stated facts, we request your honor to kindly grant us some time to peruse the condonation application before the hon'ble Commissioner of Income Tax (exemption) and oblige..\" However, this office issued a letter dated 09/01/2025 and also a reminder for the same on 28/01/2025 for copy of application made to the CIT(Exemption) which is as follows: \"As per your submission dated 26.12.2024, you have claimed that you had applied for condonation in respect of delay in filling Audit Report in form 10B. You are requested to furnish the copy of it to this office.\" But, the appellant has failed to comply with the notices. Hence, - compljant to the notices issued and in absence of proper submission, the claim of the appellant is rejected. 4.2 The Hon'ble ITAT in ITA No. 1025-1027/Chandi/2005 for the 03 in the case of M/s Chhabra Land and Housing Ltd. after following the decision of Hon'ble Supreme Court in the case of B.N. Bhattachargee, 118 ITR 461 (SC) held that the appeal does not mean merely fifing, of the appeal but effectively 4.3 As per Tax Payer's Charter, the Income Tax Department expects from taxpayers 1. Tax payer is expected to be aware of his compliance obligations under tax law and seek help of department if needed. 2. Tax payer is expected to make submission as per tax law in timely manner. 4.4 In the result, the appeal of the appellant is ismissed.\" Smt. Dakuben Saremalji Sancheti (Nodal) Charitable Trust 4 ITA No. 3704/MUM/2025 Even after 15/02/2021 government restrictions for transportation / movement of general public continued. Hence, appellant staff could not attend the office and do the needful. Considering all the surrounding circumstances hon'ble supreme the case of cognizance for extension of limitation 441 ITR 0722 extended the due date upto 28/02/2022. In case of appellant the audit report in 10B was filed on 25/03/2021 and form 10 also filed on 25/03/2021. Return of income was filed on s, all the statutory compliances were made well before the time line set by the hon'ble supreme court. In view of the above stated facts, we request your honor to kindly grant us some time to peruse the condonation application before the er of Income Tax (exemption) and oblige..\" However, this office issued a letter dated 09/01/2025 and also a reminder for the same on 28/01/2025 for copy of application , you have claimed that you had applied for condonation in respect of delay in filling Audit Report in form 10B. You are requested to furnish the copy But, the appellant has failed to comply with the notices. Hence, pljant to the notices issued and in absence of proper submission, the claim of the appellant is rejected. 1027/Chandi/2005 for the 03 in the case of M/s Chhabra Land and Housing Ltd. on of Hon'ble Supreme Court in the case of B.N. Bhattachargee, 118 ITR 461 (SC) held that the appeal does not mean merely fifing, of the appeal but effectively 4.3 As per Tax Payer's Charter, the Income Tax Department 1. Tax payer is expected to be aware of his compliance obligations under tax law and seek help of department if needed. 2. Tax payer is expected to make submission as per tax law in 4.4 In the result, the appeal of the appellant is Printed from counselvise.com 3. Before us, the assessee has placed on record an affidavit sworn by the trustee of the assessee lack of computer literacy as well as medical constraints, the trustee was unable to respond to the repeated notices i appellate authority. It has further been brought to our notice that subsequent to the passing of the impugned order dated 03.03.2025, the Ld. Commissioner of Income 06.03.2025, has rejected the assessee’s condonation of delay in filing Form No. 10B, and that the assessee has preferred an appeal against the said rejection, which remains pending adjudication. 3.1 In the totality of the circumstances, and having regard to the principles of natural justice, we are of the considered view that the ends of substantial justice would be best served if the matter is restored to the file of the Ld. CIT(A) for a fresh decision. Since the adjudication of the assessee’s appeal before the CIT(A) is inextricably linked with the outcome of the pending appeal against the order of the Ld. Commissioner of Income rejecting the condonation request, we direct the Ld. CIT(A) to dispose of the appeal afresh after the final determination of the said condonation proceedings. 3.2 Accordingly, the impugned order is set aside, and the matter is remanded to the Ld. CIT(A) with the aforesaid directions. The Smt. Dakuben Saremalji Sancheti (Nodal) Before us, the assessee has placed on record an affidavit sworn by the trustee of the assessee-trust, explaining that due to lack of computer literacy as well as medical constraints, the trustee was unable to respond to the repeated notices issued by the first appellate authority. It has further been brought to our notice that subsequent to the passing of the impugned order dated 03.03.2025, the Ld. Commissioner of Income-tax (Exemption), by order dated 06.03.2025, has rejected the assessee’s application seeking condonation of delay in filing Form No. 10B, and that the assessee has preferred an appeal against the said rejection, which remains pending adjudication. In the totality of the circumstances, and having regard to the natural justice, we are of the considered view that the ends of substantial justice would be best served if the matter is restored to the file of the Ld. CIT(A) for a fresh decision. Since the adjudication of the assessee’s appeal before the CIT(A) is tricably linked with the outcome of the pending appeal against the order of the Ld. Commissioner of Income-tax (Exemption) rejecting the condonation request, we direct the Ld. CIT(A) to dispose of the appeal afresh after the final determination of the said condonation proceedings. 3.2 Accordingly, the impugned order is set aside, and the matter is remanded to the Ld. CIT(A) with the aforesaid directions. The Smt. Dakuben Saremalji Sancheti (Nodal) Charitable Trust 5 ITA No. 3704/MUM/2025 Before us, the assessee has placed on record an affidavit trust, explaining that due to lack of computer literacy as well as medical constraints, the trustee ssued by the first appellate authority. It has further been brought to our notice that subsequent to the passing of the impugned order dated 03.03.2025, tax (Exemption), by order dated application seeking condonation of delay in filing Form No. 10B, and that the assessee has preferred an appeal against the said rejection, which remains In the totality of the circumstances, and having regard to the natural justice, we are of the considered view that the ends of substantial justice would be best served if the matter is restored to the file of the Ld. CIT(A) for a fresh decision. Since the adjudication of the assessee’s appeal before the CIT(A) is tricably linked with the outcome of the pending appeal against tax (Exemption) rejecting the condonation request, we direct the Ld. CIT(A) to dispose of the appeal afresh after the final determination of the said 3.2 Accordingly, the impugned order is set aside, and the matter is remanded to the Ld. CIT(A) with the aforesaid directions. The Printed from counselvise.com assessee shall ensure full cooperation and timely compliance before the appellate authority. 4. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/- (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Mumbai; Dated: 26/11/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Smt. Dakuben Saremalji Sancheti (Nodal) assessee shall ensure full cooperation and timely compliance before the appellate authority. In the result, the appeal of the assessee is allowed for ounced in the open Court on 26/11/2025. Sd/ RAJ KUMAR CHAUHAN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Smt. Dakuben Saremalji Sancheti (Nodal) Charitable Trust 6 ITA No. 3704/MUM/2025 assessee shall ensure full cooperation and timely compliance before In the result, the appeal of the assessee is allowed for /11/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "