Weaker Section and Tribal Rehabilitation Charitable Trust Vs ACIT (ITAT Chennai)
In a recent ruling, the Income Tax Appellate Tribunal (ITAT) Chennai bench set aside a best judgment assessment levied against Weaker Section and Tribal Rehabilitation Charitable Trust for the assessment year 2018-19. The Tribunal’s decision, issued on June 23, 2025, in the case of Weaker Section and Tribal Rehabilitation Charitable Trust Vs. ACIT, directs a fresh hearing, noting the charitable trust’s prior exemption status under Section 11 of the Income Tax Act, 1961.
The appeal faced an initial hurdle with a delay of 429 days in its filing. However, the ITAT condoned this delay, accepting the trust’s explanation that both the trust and its Chartered Accountant were unfamiliar with the electronic regime of income tax proceedings, compounded by the Managing Trustee’s health issues. The Tribunal found these reasons sufficient, attributing no negligence to the assessee for the belated submission.
A key aspect of the ITAT’s ruling revolved around the ex-parte dismissal of the trust’s appeal by the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi. The First Appellate Authority (FAA) had dismissed the appeal due to non-compliance from the assessee, without addressing the merits of the case. The ITAT criticized this approach, emphasizing that an appellate authority is bound to decide an appeal on its merits, even in the absence of the assessee. In support of this principle, the Tribunal cited the Madras High Court’s decision in Southern Steel Industries vs. AAC (CT) [1996] 101 STC 273 (Mad), which underscores that appellate authorities lack jurisdiction to dismiss appeals solely on grounds of default or non-compliance. Consequently, the ITAT set aside the FAA’s order.
