JANAPRAGATHI CREDIT CO-OPERATIVE SOCIETY LIMITED ,BENGALURU vs. INCOME TAX OFFICER, WARD-7(2)(3), BENGALURU

PER SHRI WASEEM AHMED, ACCOUNTANT MEMBER: This appeal is filed by the Assessee against the order of Ld. NFAC vide DIN: ITBA/APL/S/250/2025-26/1082321710(1) dated 06-Nov-2025 for the Assessment Year 2020-21.

ITA 2962/BANG/2025 JANAPRAGATHI CREDIT CO-OPERATIVE SOCIETY LIMITED 2. The present appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax -Appeal, ADDl/JCIT(A) Gwalior (hereafter the learned CIT-A) passed under section 250 of the Income Tax Act, 1961 (hereafter the Act) pertaining to Assessment Year- 2020-21. 3. The assessee in the appeal memo has raised several grounds which run to multiple pages. However, the effective issue raised is that the learned CIT(A) erred in dismissing the appeal in limine in an ex parte order. 4. The facts in brief are that the assessee, a cooperative society, claims to be engaged in carrying on the business of banking or providing credit facilities to the members. In the return of income filed for the A.Y. 2020-21, the assessee declared total income at NIL after claiming deduction u/s 80P(2)(a)(i) of the Act for Rs. 83,79,388/- which was processed by the CPC accepting the returned income and an intimation order u/s 143(1) was generated accordingly. 4.1 Subsequently, the assessee was selected for scrutiny, and an assessment order under section 143(3) of the Act was passed as on 2nd September 2022 wherein deduction u/s 80P(2)(a)(i) of the Act for Rs. 34,77,465/- was disallowed by holding that interest income earned from deposit with cooperative banks or banks are not eligible for deduction. 5. Being aggrieved, the assessee preferred an appeal before the learned CIT-A who dismissed the assessee's appeal without going into merit for two reasons, which are as under: i. The assessee has not responded to the notices issued during the appellate proceeding and did not file any submission and corroborative evidence in support of the grounds of appeal raised. Hence, the assessee has nothing to say against the assessment order. ii. As per Form-35, the appeal was filed against the order u/s 143(1) of the Act. However, the grounds of appeal are related to the assessment order u/s 143(3) of the Act and the date of the order mentioned is of the order u/s 143(3) of the Act. Since the appeal filed against the order passed under section 143(1) of the Act and the grounds of appeal raised were not related, the appeal was dismissed in limine. 6. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 7. The learned AR before us submitted that the appeal before the learned CIT (A) was filed against the assessment order under section 143(3) of the Act, which is

ITA 2962/BANG/2025 JANAPRAGATHI CREDIT CO-OPERATIVE SOCIETY LIMITED evident from the grounds of appeal raised before him, statement of fact and date of order against which appeal is mentioned in the Form-35. However, due to an inadvertent human mistake, it was selected as an appeal against the order u/s 143(1) of the Act which should have been ignored in the interest of justice. The learned AR further submitted that the appeal was dismissed without providing proper opportunity of being heard. 8. Per contra, the learned DR supported the order of the learned CIT(A) and submitted that despite sufficient opportunities, the assessee did not participate in the appellate proceedings or furnish the required submissions and supporting evidence. However, the Ld. DR left the issue of granting one more opportunity to the assessee to the discretion of the Bench. 9. We have heard the rival contentions of both the parties and perused the materials available on record. The facts of the case have been elaborated in the preceding; hence, we are not inclined to repeat the same for the sake of brevity. 9.1 We note that the learned CIT(A) dismissed the appeal in limine mainly for two reasons. Firstly, the assessee did not respond to the notices issued during the appellate proceedings and did not furnish submissions or supporting evidence. Secondly, while filing Form No. 35, the assessee mentioned that the appeal was against the order u/s 143(1) of the Act, whereas the grounds of appeal and the date of the order mentioned therein related to the assessment order passed u/s 143(3) of the Act. On these grounds, the learned CIT(A) dismissed the appeal without adjudicating the issues on merit. 9.2 Before us, the Ld. AR explained that the appeal was in fact intended to be filed against the assessment order passed u/s 143(3) of the Act. This is also evident from the grounds of appeal, statement of facts and the date of the assessment order mentioned in Form No. 35. It was submitted that mentioning section 143(1) of the Act in Form No. 35 was merely an inadvertent human error while selecting the relevant option. 10. Having considered the facts, we are of the view that the appeal should not have been dismissed in limine merely because an incorrect section was inadvertently selected in Form No. 35. When the grounds of appeal, statement of facts and other particulars clearly indicate that the assessee was aggrieved by the assessment order passed u/s 143(3) of the Act, such a technical mistake should not come in the way of adjudication of the appeal on merit. The substance of the appeal has to be considered rather than rejecting it solely on account of such procedural error. 10.1 At the same time, we also cannot ignore the fact that the assessee did not properly participate in the proceedings before the learned CIT(A) and failed to 3

ITA 2962/BANG/2025 JANAPRAGATHI CREDIT CO-OPERATIVE SOCIETY LIMITED furnish the necessary submissions and supporting documents despite opportunities being provided. An assessee seeking appellate relief is also expected to diligently pursue its appeal and extend necessary cooperation to the appellate authority. However, in our view, the said non-compliance should not, in the facts of the present case, deprive the assessee of an opportunity to have its grievance decided on merits. 10.2 We further note that the learned CIT(A) has not examined the merits of the disallowance made by the AO. Therefore, there is no finding of the first appellate authority on the substantive issue which can be examined by us at this stage. In these circumstances, we consider it appropriate, in the interest of substantial justice, to provide one more opportunity to the assessee to present its case before the learned CIT(A). Accordingly, we set aside the impugned order of the learned CIT(A) and restore the entire appeal to his file for de novo adjudication on merit in accordance with law. The learned CIT(A) shall provide reasonable opportunity of being heard to the assessee and thereafter decide the grounds raised before him by passing a speaking and reasoned order. We also direct the assessee to fully cooperate with the proceedings before the learned CIT(A), response to the notices to be issued, and furnish all necessary details, explanations and supporting documents required for proper disposal of the appeal. The assessee shall not seek unnecessary adjournments and shall diligently pursue the appellate proceedings. 10.3 We make it clear that we have not expressed any opinion on the merits of the deduction claimed by the assessee u/s 80P(2)(a)(i) of the Act or on the correctness of the disallowance made by the AO. All issues are left open for examination and adjudication by the learned CIT(A) in accordance with law. Thus, the grounds raised by the assessee are allowed for statistical purposes. 11. In the result, the appeal filed by the assessee is hereby allowed for statistical purposes. Order pronounced in the open court on 25th August, 2026

Sd/- YOGESH KUMAR US WASEEM AHMED JUDICIAL MEMBER ACCOUNTANT MEMBER Bangalore Dated: 25th August, 2026 Vms

ITA 2962/BANG/2025 JANAPRAGATHI CREDIT CO-OPERATIVE SOCIETY LIMITED

Copy to: JANAPRAGATHI CREDIT CO-OPERATIVE SOCIETY LIMITED , NO. 18, 3RD CROSS, HOSUR MAIN 1 ROAD, ADUGODI, BENGALURU-560030, KARNATAKA INCOME TAX OFFICER, WARD-7(2)(3), BMTC BUILDING, 80 FEET ROAD, 6TH 2 BLOCK, KORAMANGALA, BENGALURU-560095, KARNATAKA 3 THE PCIT / CIT, 4 THE D.R., ITAT, BANGALORE BENCH 5 GUARD FILE By Order

ASSISTANT REGISTRAR / I.T.A.T., BANGALORE