Ex parte section 11 exemption dispute restored for fresh assessment after trust failed to respond to notices

5-Second Takeaway

The Tribunal restored the matter for de novo assessment after holding that the pension and gratuity fund trust had been negligent in pursuing the assessment and appellate proceedings and had not explained basic expenditure details. The assessee’s appeals were allowed subject to a cost of Rs. 5,000, and the delay of 52 days was condoned on that condition.

The dispute concerned exemption under section 11 in assessments made ex parte against a trust administering pension and gratuity benefits for employees. The Assessing Officer had made an ad hoc disallowance of 50 per cent of expenditure and added the excess of income over expenditure after the trust did not comply with notices issued in the assessment and first appellate proceedings.

On appeal, the Tribunal noted that the assessee, a government organisation handling its employees’ pension and gratuity funds, had been negligent in pursuing both stages of the matter. It also recorded that even basic details of expenditure and related matters had not been placed before the lower authorities.

Because the record was inadequate for a proper decision, the Tribunal sent the matter back to the Assessing Officer for de novo adjudication. The remand was made subject to payment of a cost of Rs. 5,000, with the direction that the assessee co-operate in the fresh proceedings.

The Tribunal also condoned the 52-day delay on the same terms and allowed the appeals.