JAY DURGAMATA GRAMIN SHETI SAHAKARI PATSANSTHA MARYADIT RAYATE SANGAMNER,AHEMEDNAGAR vs. THE INCOME TAX OFFICER, WARD-4, AHMEDNAGAR

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ITA 739/PUN/2023Status: DisposedITAT Pune10 August 2023AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the NFAC, as a quasi-judicial authority, should adopt a justice-oriented approach rather than a hyper-technical one. The non-filing of a condonation petition was considered a curable defect, and the assessee deserved an opportunity to present its case on merits.

What were the facts?

The assessee, a co-operative society, failed to file an Income Tax Return and was assessed under Section 144. The appeal filed before the NFAC was dismissed in limine due to a delay without a condonation petition and without providing an opportunity to be heard.

What were the issues?

Whether the NFAC was justified in dismissing the appeal in limine for non-filing of a delay condonation petition without providing an opportunity to be heard. Whether a justice-oriented approach should be preferred over hyper-technical grounds in tax litigation.

Which sections of the Income-tax Act were involved?

Section 144,Section 80P,Section 250,Section 246A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE ‘SMC’ BENCH, PUNE

Before: HON’BLE SHRI S. S. GODARA & SHRI G. D. PADMAHSHALI

Pronounced: 10/08/2023

बिधम / V/s Income Tax Officer, Ward-(4), Ahmednagar. . . . . . . . प्रत्यर्थी / Respondent द्वधरध/ Appearances Assessee by : None Revenue by : Shri R Y Balawade, Addl. CIT सुनवाई की तारीख / Date of conclusive Hearing : 09/08/2023 घोषणा की तारीख / Date of Pronouncement : 10/08/2023 आदेश/ ORDER PER G. D. PADMAHSHALI, AM; This assessee’s appeal is directed against DIN & order No. ITBA/NFAC/S/250/2022-23/1051320540(1) dt. 25/03/2023 passed u/s 250 of Income Tax Act, 1961 [in short ‘the Act’] by National Faceless Appeal Centre [in short ‘NFAC’] which ascended out of an order of assessment passed u/s 144 of the Act by Income Tax Officer, Ward-(4), Ahmednagar [in short ‘AO’] for assessment year 2017-18 [in short ‘AY’].

ITAT-Pune Page 1 of 5

Jay Durgamata Gramin Sheti Sahakari Patsnstha Maryadit Rayate Sngamner,

2.

Concisely stated facts of the case are; 2.1 The assessee is Co-operative society and non-filer of Income Tax Return [in short ‘ITR’], in whose case an information under Operation Clean Money [in short ‘OCM’] was received about the assessee’s cash deposits during demonetisation period.

2.2 Consequent to above, the assessee was called upon to file ITR and explain nature and source of such cash deposit made by it. In the event of assessee’s failure, the Ld. AO framed an assessment u/s 144 of the Act by brining to tax the entire amount of profit i.e. ₹4,93,295/- as appearing in the Profit & Loss account of the assessee. While framing the aforestated assessment, the Ld. AO denied to allow any deduction u/s 80P of Chapter VI-A of the Act in the absence of valid ITR on record.

2.3 Aggrieved by the aforestated denial of deduction u/s 80P of the Act, the assessee filed a delayed appeal before the Ld. NFAC u/s 246A(1)(a) of the Act. However, in the absence of petition seeking condonation of delay caused in instituting the appeal before first appellate authority, Ld. NFAC without putting the assessee to notice and according any opportunity of being heard has dismissed the appeal in limine by rejecting to condone the delay.

2.4 Aggrieved by the aforestated impugned order of non adjudication of Ld. FAA, the appellant assessee set-up this case alleging the violation of principle of natural justice in the former to merits thereof.

ITAT-Pune Page 2 of 5

Jay Durgamata Gramin Sheti Sahakari Patsnstha Maryadit Rayate Sngamner,

3.

In the absence of the assessee, with able assistance from the Ld. DR we proceeded to adjudicate the matter ex-parte u/s 24 of the Income Tax Appellate Rules, 1963. [in short ‘ITAT-Rules’]. We have heard Ld. DR and perused the material placed on record in light of rule 18 of ITAT-Rules and noted that the order of assessment was framed on 04/12/2019, whereas the appeal thereagainst before the Ld. FAA was filed on 17/02/2020. Ostensibly there is unsubstantial delay in instituting the appeal before the Ld. NFAC. This appeal admittedly was filed without accompanying petition for condonation of delay stating therein the circumstance due to which said delay was caused. Faced with the situation, the Ld. NFAC rejected to entertain the appeal on a technical ground of assessee’s failure to file petition for condonation.

4.

In these facts and circumstances, placing reliance on recent judgement of Hon’ble Supreme Court rendered in ‘Raheem Shah & ANR Vs Govind Singh & Ors’ [CIVIL APPEAL NO.4628 OF 2023], we are heedful to state that, while dealing with tax litigation, the Ld. NFAC being a quasi- judicial authority was expected to adopt justice oriented approach rather resorting to iron-cast technical one. In the present case, the Ld. NFAC came to dismiss the appeal of the assessee in limine on a hyper-technical ground without putting the assessee to notice.

ITAT-Pune Page 3 of 5

Jay Durgamata Gramin Sheti Sahakari Patsnstha Maryadit Rayate Sngamner,

5.

In our considered view, non-filing of petition for condonation being a technical but curable defect and in all the fairness the assessee deserves an opportunity to cure and contest its case on merits. In view of this, without offering any comments on the merits of the case, we deem it fit to remit the file of Ld. NFAC with a direction deal therewith de-nova and pass a speaking order in terms of section 250(6) of the Act.

6.

Needless to state the Ld. NFAC shall accord not more than three opportunities to the assessee to represent its case by filing a petition for condonation & explain the reasons thereof to the satisfaction of the first appellate authority and such evidential material in support of its claim as required under the application laws. We also direct the appellant assessee to co-operate with the Ld. NFAC in speedy disposal of the appeal without seeking unreasoned adjournment.

7.

In result, the appeal is ALLOWED FOR STATISTICAL PURPOSE. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Thursday, 10th day of August, 2023.

-S/d- -S/d- S. S. GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ PUNE; ददनाांक / Dated : 10th day of August, 2023. आदेश की प्रनिनलनपअग्रेनषि / Copy of the Order forwarded to : 1.अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The Pr. CIT, Pune ITAT-Pune Page 4 of 5

Jay Durgamata Gramin Sheti Sahakari Patsnstha Maryadit Rayate Sngamner,

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