New Star Skyland Education Society Vs ITO (ITAT Delhi)
The appeal before the Income Tax Appellate Tribunal, Delhi Bench concerned processing of the assessee’s return for Assessment Year 2020–21 under Section 143(1)(a) of the Income-tax Act. The assessee challenged the addition of ₹1,31,67,939 made while issuing the intimation, contending that the adjustment was beyond the scope of Section 143(1)(a), which permits only prima facie adjustments based on mistakes apparent from the return. It was argued that the addition was made solely due to delay in filing Form 10B and ITR-7, without granting reasonable opportunity of being heard, thereby violating principles of natural justice.
The assessee submitted that the delay occurred during the COVID-19 period, when timelines were extended by the Supreme Court, and that non-filing of Form 10B was a technical lapse which could not justify denial of exemption. Alternatively, it was contended that even otherwise, the addition was wrongly computed by treating gross school fee receipts as income without allowing expenses.
The Tribunal, after considering the submissions, held that the assessee had not been given adequate opportunity, particularly in light of the Supreme Court’s extension of limitation during the COVID period. The Tribunal found that interests of justice required fresh consideration. Accordingly, the matter was restored to the file of the CIT(A) with a direction to decide the appeal afresh after granting reasonable and adequate opportunity of hearing. The appeal was allowed for statistical purposes.
