1. This appeal is filed by the assessee against order dated 16.12.2022, passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2014-15.
2. The assessee has raised the following grounds of appeal :-
1. In law and in the facts and circumstances of the appellant’s case, the order passed by the learned CIT(A) under Section 250 of the Income Tax Act is ab initio void being bad in law.
2. In law and in the facts and circumstances of the appellant’s case, the learned CIT(A) erred in not condoning delay in filing of appeal when there is bonafide belief that the delay is not malafide as said by the Ld. CIT(A) in its order passed under Section 250(6) of the.
3. In law and in the facts and circumstances of the appellant’s case, the learned CIT(A) erred in confirming the disallowance of deduction under Section 11(2) amounting to Rs.34,00,000/- when there is inadvertent mistake on the part of appellant while filing return of income. The CIT(A) ought to have appreciated that only real income can be taxed and all relevant details were already filed along with return of income and addition cannot be made due to technical error made while filing return of income.
4. in law and in the facts and circumstances of the appellant’s case, the learned CIT(A) erred in not providing an opportunity of video hearing to the appellant during the course of appellate proceeding.”
3. The return of income was filed on 25.09.2014 declaring income of Rs. Nil by the assessee Trust. Form No.10 was filed by the Trust physically on 26.09.2014 i.e. before the due date of filing of Income Tax Return. Form No.10B which has a reference to Section 11(2) of thewas filed online on 25.09.2014. The assessee is a Registered Charitable Trust which was formed by Gujarat Police Department. Return was processed by CPC under Section 143(1) of thevide order dated 28.02.2016 and assessed the income of Rs.34,22,850/-, after making addition of Rs.34,00,000/- in respect of specific reserves, which the Trust has created out of the current income of the Trust for which copy of the resolution of board of trustees and Form No.10 was filed by the Trust with Assistant Commissioner of Income Tax (Exemption), Ahmedabad on 26.09.2014. In the year 2014-15, the same was not mandatory to file Form No.10 online as per the submission of the Ld. AR/assessee.
4. Being aggrieved by the Assessment Order, the assessee Trust filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee on the ground of delay.
5. The Ld. AR submitted that the return was processed by the CPC and vide intimation under Section 143(1) of thefor addition of Rs.34,00,000/-, without giving opportunity, was given to the assessee to contest the addition. Intimation was issued on 28.02.2016. The assessee filed online application for rectification under Section 154 of theon 03.02.2017 and the same was rejected on 17.05.2021. The assessee was never heard by the CIT(A) in respect of addition made particularly when both the return as well as Form No.10 was filed within the prescribed time limit. The Ld. AR submitted that the delay in filing the appeal before the CIT(A) was due to the reason that trustees are ex-officio members of the Gujarat Police Department with Superintendent of Police being one of the key Trustees who is authorized to take decisions. Once the rectification application was rejected papers were sent to the Police Department for necessary direction as the President of the Trust who is the Superintendent of Police who has to take the decision. Unfortunately the file was misplaced as the staff concerned was transferred. More particularly, the delay is from the date of rejection of rectification application till the date of filing the appeal. The Ld. AR relied upon the decision of Hon’ble Apex Court in the case of N. Balakrishnan vs. M. Krishnamurthy 1998 (7) SCC 123, [LQ/SC/1998/904] Collector, Land Acquisition vs. Mst Katiji & Others, 167 ITR 471 [LQ/SC/1987/214] , Maniben Devraj Shab vs. Municipal Corporation of Birhan Mumbai, (2012) 5 SCC 157 [LQ/SC/2012/354] and also decision of Hon’ble Bombay High Court in case of Cenzer Industries Limited vs. ITO – notice of motion Nos.492 & 493 of 2015 dated 15.01.2016. The Ld. AR further submitted that theR 7 was wrongly filed where schedule I & J were incorrectly filed stating “Not applicable”. Pertinent to that when viewed from entirely when form No.10 has been filed within time and, therefore, the disallowance merely on technicality is unjust. The Ld. AR relied upon the Circular No.14(XL 35) dated 11.04.1955 which mandates the Officers of the Department must not take advantage of ignorance of an assessee as to his rights. Ld. AR submitted that the matter may be restored back to the file of the CIT(A) after condoning the delay and decide the matter on merit.
6. The Ld. DR relied upon the Assessment Order, Rectification Order and the Order of the CIT(A).
7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that due to transfer of supporting staff who was Incharge of the records related to the Income Tax Return and the subsequent rectification order and the necessity of filing appeal was transferred during that period and being the Trust which is formed by the ex-officio members Gujarat Police Department, the reasons given by the assessee for delay for filing the appeal before the CIT(A) appears to be genuine. Hence, the CIT(A) should have condoned the delay and decided the matter on merit after calling remand report from the Assessing Officer. From the perusal of the records, it appears that the Assessing Officer also has not taken cognizance of the date of filing of the Form No.10 as well as return which was specifically filed within the prescribed time limit physically by the assessee before the Revenue Authorities. Thus, it will be appropriate to remand back this matter to the file of the Assessing Officer for proper adjudication and verification of the issues as per Income Tax Statute. Needless to say, the assessee be given opportunity of hearing by following the principles of natural justice.
8. In the result, appeal of the assessee is partly allowed for statistical purpose.
9. Order pronounced in the open Court on this 22nd December, 2023.
