MM361 KAVALKARAMPATTY PACCS,TIRCHY vs. ITO, WARD-1(1), TRICHY

At the threshold, we observe that there is a delay of 322 days in the filing of the present appeal by the assessee. The assessee has furnished an affidavit explaining that the office bearers and the employees of the assessee are rural residents who have limited familiarity with the faceless and electronic regime of

Brief facts of the case are that the assessee is a Primary Agriculture Credit Cooperative Society and did not file its return of income for AY 2019-20. Based on the information available with the department, the AO found that the assessee has made cash deposits to the tune of Rs.1,70,24,303/- during the assessment year. Hence, the case was re-opened u/s.147 of the Act, accordingly, a notice u/s.148 of the Act issued to the assessee. In response, the assessee has filed its return of income on 04.12.2023, declaring total income of Rs.NIL. Further, the AO issued statutory notices to the assessee and by calling for details. The assessee chose to be silent and did not respond to any of the notices. Hence, the AO completed the reassessment by passing an exparte order u/s.147 r.w.s 144 r.w.s 144B of the Act dated 19.02.2024 by making a disallowance of claim made u/s.80P(2)(a)(i) of the Act of Rs.23,54,224/-, disallowance of NPA of Rs.15,34,926/- and Sundry Debtors written off of Rs.10,24,525/- by arriving a total income of Rs.49,13,695/-.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) on 21.08.2024.

At the outset, we observed that ld.CIT(A) has issued various notices to the assessee to appear for hearings as detailed in paragraph 5 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld.CIT(A), NFAC dismissed the appeal filed by the assessee by confirming the order of the AO by passing an order

The ld.AR submitted that the office bearers and the employees of the assessee are rural residents who have limited familiarity with the faceless and electronic regime of proceedings adopted by the income tax department. Further, the ld.AR stated that the practice of service of notices and orders exclusively through email and the income tax portal was not adequately understood by the office staff and hence the assessee could not participate in the appellate proceedings. In view of the above, the ld.AR prayed that the Tribunal may be pleased to set aside the order of ld.CIT(A) and remit the issues to the file of AO. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the AO to complete the assessment proceedings effectively.

Per contra, the ld.DR submitted that both the Assessing Officer and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).

We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an ex-parte order by considering the information available with the department and the same has been confirmed by the ld.CIT(A), NFAC due to non- participation of the assessee. Since, the assessee has failed to participate before the AO as well as the first appellate authority, we levy the cost of Rs.5,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras within 30 days from the date of receipt of this order and the assessee shall satisfy the payment of cost before the authorities.

In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of AO and direct the AO to denovo frame the assessment order in accordance with law, after providing reasonable

In the result, appeal filed by the assessee is allowed for statistical purposes.