SHREE SHIVPUR DUDH UTPADAK SAHAKARI MAHILA MANDALI LTD,TAPI vs. ITO, WARD-1, BARDOLI

Brief facts of the case the assessee did not file the return of income under section 139 of the Act relating to the assessment year 2017-18. Therefore a notice under section 142(1) of the Act was issued. In response, the assessee filed belated return but not participated in the hearing proceedings, which has resulted in passing ex-parte assessment order making addition of Rs. 17,90,229/-. 3. Aggrieved against the ex-parte order, assessee filed appeal before Ld. CIT(A), who have given seven opportunities of hearing which were not responded by the assessee, therefore, Ld. CIT(A) dismissed the appeal for non prosecution. Aggrieved against the same the assessee is in appeal before us 4. arising on the following Grounds of Appeal:- “1 On the facts and in the circumstances of the case as well in law, the learned CIT (Appeals) has erred both on facts and in law in deciding the appeal ex-parte in violation of the principles of natural justice and without granting to the assessee a fair, proper and meaningful opportunity of being heard and the inferences of the CIT (Appeals) that the appellant is not interested in pursuing the appeal is without jurisdiction, perverse, invalid, arbitrary, bad in law and hence, liable to be struck down. On the facts and in the circumstances of the case as well in law, the learned CIT (Appeals) has erred both on facts and in law in making valid service of notice to the appellant on correct e-mail address and decided the appeal ex-parte without giving to the assessee a fair, proper and meaningful opportunity of being heard and hence, the order passed by the CIT(A) should be liable to be struck down.

The order CIT(Appeals), NFAC, Delhi confirming the order of the learned ITO, Ward 2, Bardoli (for the sake of brevity "The AO") making ad-hoc additions of Rs. 17,90,229/- on misleading, baseless, arbitrary, and perverse observations, is contrary to law and facts of the case and hence, liable to be quashed.

On the facts and in the circumstances of the case as well in law, both the lower authorities have grievously failed to see and appreciate the submissions made on different dates in compliances to the notices u/s 143(2) / 142(1) of the Act in all the terms and hence, the action of the AO to assume the jurisdiction u/s 144 of the Act for passing the ex-parte order on mere estimates of net profit ratio and on alleged unexplained cash credit u/s 68 of the Act is being without jurisdiction, bad in law, illegal, invalid, arbitrary, void ab initio and hence, liable to be annulled in toto.

On the facts and in the circumstances of the case as well in law, both the lower authorities have grievously failed to appreciate that the appellant being the registered primary milk producers co-operative society engaged in supplying milk of its members to its federal co- operative society (SUMUL), duly eligible for deduction u/s 80P(2)(b) of the Act and hence, the ex-parte order passed by the AO treating the total transactions of depositing of cash and cheques for the aggregate amount of Rs. 1,69,58,487/-in the regular bank accounts arising purely out of the prime activity of supplying milk to its federal co-operative society, as the unaccounted income applying the notional and estimated NP ratio at the rate of 8% and not granting the deduction u/s 80P(2)(b) of the Act is, being without jurisdiction, unwarranted of facts, arbitrary, perverse, bad in law, illegal and invalid, liable to be struck down.

On the facts and in the circumstances of the case as well in law, both the lower authorities have erred in making addition of Rs. 4,33,350/- on account of alleged unexplained cash credit u/s 68 r.w.s. 115BBE of the Act, ignoring the explanations offered as to its nature and source of amount deposited in cash during the demonetization period with the regular/disclosed bank account being the income earned/transactions purely of the activity of supplying milk of its members to its federal co- operative society, eligible for deduction u/s 80P(2)(b) of the Act and hence, not justified.

The CIT(Appeals), NFAC, Delhi has erred in confirming the order of the AO in not considering the entire correspondences made in the course of assessment proceedings, already been supplied with the appeal memo forming part of the statement of facts including cogent explanations and submissions made in writing by the appellant on I.T.A No. 356/SRT/2026 A.Y. 2017-18 Page No 4

Your appellant further reserves his rights to add, alter, amend or modify any of the aforesaid grounds before or at the time of hearing of an appeal.”

Heard the rival submissions and perused materials available on record. The assessee claims notices were not properly served on the assessee, which has resulted in passing ex-parte order before the lower authorities. The assessee also produced proof of reply filed on 04.09.2019, 23.09.2019 and 13.11.2019, therefore, requested that one more opportunity be given to the assessee to explain its case. Considering the submission of the assessee we hereby set aside ex- parte orders passed by the lower authorities and remit the matter to the file of Jurisdictional Assessing Officer to give one more opportunity of hearing to the assessee to produce all evidences in support of its case. Needless to say that the assessee should make use of this final opportunity and produce all necessary details, documents before the JAO for passing order on merits. 6. In the result, appeal filed by the assessee is treated as allowed for statistical purpose.