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Judgment
PER RAJ KUMAR CHAUHAN (J.M.):
The appeal is preferred by the assessee /appellant against the order of Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), New Delhi [hereinafter referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] dated 08.09.2025 for the A.Y. 2023-24 wherein denial of exemption u/s 11 of the Act by CPC, Bengaluru was upheld.
The facts in brief as culled out from the order of the authorities below are that the appellant/assessee, a public charitable trust registered u/s 12AA of the Act, engaged in the promotion of educational activities and providing vocational training to the poor and needy students at nominal fee. The return of income of the relevant year was filed by the assessee on 23.12.2024 declaring taxable income of Rs. Nil. The assessee has claimed voluntary contribution aggregating Rs. 1,24,81,845.00 as exempt income u/s 11, 12 and Sections 10 23C iv, 10 23C v, 10 23C vi and 10 23(C) vii of the Act. The AO has considered the said voluntary contribution as income and has not given the exemption under the above Sections and consequentially raised the demand of Rs. 50,43,010/-.
Aggrieved by the said demand, the assessee filed appeal before the ld. CIT(A) wherein the appeal has been dismissed and the denial of exemption by CPC, Bengaluru was upheld because the appellant has not explained the material facts which were required for granting exemption.
Aggrieved by the impugned order of the ld. CIT(A), the assessee is in appeal before the Tribunal and has raised various grounds in Form 36.
We have heard the ld. AR on behalf of the assessee and Ld. DR for the Revenue. The ld. AR at the very outset, submitted that there is delay of 5 days in filing the appeal before the Tribunal and an application seeking condonation of delay has been filed wherein the condonation of delay has been sought on the ground that the authorized counsel handling this case was out of station due to another professional engagement of urgent nature and because of unavoidable absence of the authorized counsel, the appeal could not be filed hence it is prayed that because of above explained reasons the delay of 5 days be condoned.
We have heard Ld. AR and have considered the submissions and examined the application. In view of the contention raised in the application and in the interest of justice, the delay of five days in filing the appeal is condoned and the appeal is admitted for hearing. It has been argued by the Ld. AR that the impugned order has been passed without giving effective opportunity of hearing to remove the deficiency as noted by the ld. CIT(A) wherein the exemption has been disallowed for non-compliance by the assessee. It is therefore submitted that one more opportunity be given to the assessee to submit necessary documents or to make required compliance before the ld. CIT(A) and for that reason the matter be remitted back to the file of Ld. CIT(A) for deciding the same afresh.
Ld. DR on the other hand while relying the order of the Ld. lower authorities has left it to the discretion of the court to consider the submissions.
We have considered the rival submission and examined the impugned order. We deem it expedient to extract the relevant portion of the impugned order wherein the reason for dismissal of the appeal has been mentioned in para 6.2 extracted below as under:
“6.2On perusal of the reply filed by the Appellant, it is seen that the Appellant has not explained the following reasons as under:
1)In Schedule Part B-TI (Part B3), Sl. No. II(1) 'Total Income for the previous year other than Sl. No. 7' should be equal to or more than sum of Sl. No. (C- Ai-Bi) of Schedule VC and Sl. No. 10 'Total of Schedule Al. Hence, Sl. No. 1 of Part B-TI (Part B3) will be recomputed accordingly. (as entered -0, as Computed -35160034, Variance-35160034)
2)In Schedule Part B-TI (Part B3), Sl. No. II(2) 'Total Expenditure incurred in India, for the objects of the auditee assessee' is less than Sl. No. G of Column 'Revenue of Schedule A. Hence, Sl. No. 2 of Part B-TI (Part B3) will be recomputed accordingly. (as entered -0, as Computed-24331292, Variance -24331292)
In the absence of any reply from the Appellant on the above points, the denial of exemption made by CPC Bengaluru is upheld. Therefore, these grounds of appeal are dismissed.”
It is thus evident from the above extract of the impugned order that the appeal has been dismissed as the appellant has failed to explain the material facts enumerated therein. It appears from the impugned order that effective opportunity of hearing has not been given for removing those deficiency by the assessee and in these facts, we are convinced that the provision of opportunity of hearing as enshrined in Section 250 and sub section 2a of the Act has not been followed while passing the impugned order.
In the absence of effective hearing, the appellant/assessee could not explain the reasons for dismissal of the appeal and denial of exemption claimed by the assessee under the relevant provisions of Income Tax Act. For these reasons, we are of the considered opinion that the end of justice required that one effective opportunity of hearing be given to the assessee to present its case before the Ld. CIT(A) who shall submit the necessary details/ make the necessary compliance within a period of 60 days from this order. For these reasons, the impugned order is set aside and the matter is remitted back to the file of the ld. CIT(A) for deciding the same afresh.
In the result, the appeal of the assessee is accordingly allowed for statistical purposes for above terms.