ITAT Rules in Favor of NGO, Cites Principles of Natural Justice in Ex Parte Case [Read Order]
The Tribunal observed that income tax laws operate as welfare legislation, distinct from penal statutes, and thus benefit of doubt should favor the taxpayer
![ITAT Rules in Favor of NGO, Cites Principles of Natural Justice in Ex Parte Case [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/ITAT-ITAT-Ranchi-Principles-of-Natural-Justice-in-Ex-Parte-Case-TAXSCAN.jpg "ITAT Rules in Favor of NGO, Cites Principles of Natural Justice in Ex Parte Case [Read Order]")
The Income Tax Appellate Tribunal (ITAT) Ranchi Bench has ruled in favor of appellant, setting aside an ex parte assessment order and subsequent appellate decision that had confirmed tax additions against the NGO. The tribunal emphasized the principles of natural justice, granting the assessee one final opportunity to present its case before the Commissioner of Income Tax...
The Income Tax Appellate Tribunal (ITAT) Ranchi Bench has ruled in favor of appellant, setting aside an ex parte assessment order and subsequent appellate decision that had confirmed tax additions against the NGO. The tribunal emphasized the principles of natural justice, granting the assessee one final opportunity to present its case before the Commissioner of Income Tax (Appeals) [CIT(A)].
Birsa Gramin Vikash Evam Prashikshan Sanstha, appellant-assessee an NGO engaged in rural development and education, which faced additions for unexplained cash deposits during assessment year 2017-18. The Assessing Officer had completed the assessment ex parte under Section 144 of the Income Tax Act, 1961, after the NGO failed to respond to notices. The CIT(A) later upheld the additions without a substantive hearing, prompting the NGO to appeal before the ITAT.
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During proceedings, the NGO’s representative argued that the assessee had a strong case on merits but was denied a fair opportunity to present evidence. The Revenue, however, contended that the NGO had been "casual" in complying with notices, having missed four hearing opportunities before the CIT(A).
The ITAT acknowledged that while the Revenue had provided multiple opportunities, the NGO’s non-compliance might not have been deliberate. The Tribunal observed that income tax laws operate as welfare legislation, distinct from penal statutes, and thus benefit of doubt should favor the taxpayer. The order noted potential "vis major" (unavoidable circumstances) that could have hindered the NGO’s ability to respond.
In its decision, the ITAT set aside the CIT(A)’s order and remanded the matter for fresh adjudication, directing the CIT(A) to grant the NGO a reasonable hearing. The tribunal cautioned the NGO to be vigilant in future compliance but stressed that natural justice demanded a final opportunity to substantiate its claims.
Partha Sarathi Chaudhury (Judicial Member) allowed the appeal for statistical purposes.
To Read the full text of the Order CLICK HERE
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