M/S. SEVA SOUHARDA CREDIT CO OPERATIVE LIMITED,TUMKUR vs. INCOME TAX OFFICER, WARD- 1 & TPS, TUMKUR

The assessee has raised the following grounds of appeal: - “1. That the order of the learned Commissioner of Income-tax (Appeals) in so far it is prejudicial to the interests of the appellant is bad and erroneous in law and against the facts and circumstances of the case.

The facts of the case are that the assessee did not file its return of income for AY 2017-18. Subsequently, notice under Section 142(1) of the Income Tax Act, 1961 (the Act) was issued to the assessee followed by notice under Section 143(2) of the Act. The assessment order was passed under Section 144 of the Act. The AO made addition of Rs.11,38,500/- under Section 68 r.w.s. 115BBE of the Act as unexplained credit in the hands of the assessee. Further the AO assessed Rs.2,26,049/- as income of the assessee. Aggrieved by the order of the AO, the assessee has preferred appeal before the CIT(A).

On appeal the learned CIT(A) confirmed the disallowance made by the AO by observing as under: - “6. In view of the above, the undersigned is left with no option but to decide the case on the basis of material on record. Bare perusal of the facts shows that the appellant has not pursued the appeal despite being granted several opportunities as elaborated supra. The assessee has further jeopardized its case by not responding despite several opportunities that were provided. The assessee has failed to substantiate the credits of Rs.11,35,500/- and has not explained its eligibility for claiming deduction u/s 80P(2)(a)(1) of the Income Tax Act, 1961. In the absence of any evidence whatsoever, whether documentary or otherwise, I am constrained to agree with the approach adopted by the AO in adding back the unexplained credits as well as disallow the u/s 80P(2)(a)(1). The AO has passed a reasoned and speaking order considering all the facts and the circumstances of the case and no interference with the order of the AO is called for. The grounds of appeal are therefore dismissed.”

I have heard the rival contentions and perused the material on record. In this case the assessment order was passed by the AO ex-parte under Section 144 of the Act. The NFAC, Delhi issued various notices to assessee for submission in support of the grounds of appeal on the following dates: -

Before us the learned A.R. submitted that one more opportunity may be given in the interest of justice to present assessee’s case before the AO. Since the assessment order has been passed ex-parte and there was no participation of the assessee before the NFAC also, in my opinion it is appropriate to remit the entire issue in dispute to the file of the AO for his fresh consideration. Accordingly, the orders of the lower authorities are set aside and the issue is remitted to the file of the AO for fresh consideration.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Dictated and pronounced in the open Court on 18th January, 2023.