ALA SAMUDRA MEENUGARARA PRATHAMIKA SEVA SAHAKARI SANGHA N MALPE,UDUPI vs. INCOME TAX OFFICER, WARD-1 & TPS, UDUPI

On the other hand, the ld. DR opposed to condone the delay but left the issue at the discretion of the Bench.

We have considered the rival submissions of both the parties and materials placed on record. The explanation offered by the assessee shows that it had pursued the remedy diligently. The fact remains that the assessee had filed the appeal within a short delay of 13 days, though before a wrong forum. The present appeal before this Tribunal is in pursuance of the direction of the Panaji Bench, and therefore the delay is only technical in nature. It is well settled law, as laid down by the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji & Ors. [167 ITR 471 (SC)], that substantial justice must prevail over technicalities and that when a party has acted bona fide, liberal approach should be adopted while considering condonation of delay. In view of the above facts and circumstances, we are satisfied that the assessee has shown sufficient cause for the delay in filing the appeal before this Tribunal. The delay of 153 days, being only on account of jurisdictional issues and not on account of any deliberate lapse, is hereby condoned. Hence, we proceed to adjudicate the issue on merit.

The issue raised by the assessee is that the learned CIT(A) erred in confirming the disallowances of claim of deduction under section 80P of the Act by wrongly alleging the violation of mutuality.

The relevant facts are that the assessee is a cooperative society registered under Karnataka Souharda Sahakari Act. The assessee for the year under consideration filed return of income declaring total income at Rs. 47,320/- only. The income was assessed at Rs. 28,39,170/- under section 143(3) of the Act vide order 25th December 2018.

Likewise, the learned PCIT observed that in the profit and loss account the assessee claimed interest expenses, including an amount of Rs. 25,060/- which was outstanding. Hence, the learned PCIT by invoking the provision of section 43B of the Act recommended to allow the claim in the year in which the same was actually paid.

Accordingly, the set aside assessment proceeding was initiated by the AO and notices under section 142(1) of the Act was issued as on 4th February 2022 and 23rd February 2022 by the faceless assessment unit. But the assessee failed to make reply. Hence the faceless assessment unit in the absence of submission from assessee completed the assessment under section 143(3) r.w.s 263 vide order dated 17th March 2022 as per direction of learned PCIT. Hence, the AO assessed the income at Rs. 33,03,938/- after making disallowances of 80P deduction of Rs. 4,39,708/- and disallowances of interest under section 43B of the Act for Rs. 25060/-.

The aggrieved assessee preferred an appeal before the learned CIT(A)

However, the learned CIT(A) found that the assessee has not filed any submissions in support of grounds of appeal despite being given several opportunities. Accordingly, the learned CIT(A) was of the view that the assessee is not interested in pursuing the appeal. The learned CIT(A) before dismissing the appeal referred the various decision of Hon’ble High Courts and Tribunals where appeal has been dismissed on account of negligence of the assessee.

Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us.

The learned AR before us requested to set aside the issue to the file of the AO for fresh adjudication as per law and assured for making necessary compliance.

On the other hand, the learned DR before us opposed to set aside the issue to the file of the AO and prayed to confirm the order of the authorities below.

We have carefully considered the rival contentions of both the parties and perused the materials on record. In the present case, the assessment order was passed under section 143(3) read with section 263 of the Act, wherein the Assessing Officer disallowed the claim of deduction under section 80P of the Act as well as interest under section 43B of the Act. It is also seen that the order of the learned CIT(A) was . passed ex-parte without considering any submissions of the assessee. Thus, both the assessment order as well as the appellate order stand concluded without providing the opportunity of hearing to the assessee. It is a settled principles of law that no person should be unheard and that the principles of natural justice must be followed at every stage of adjudication. In the present case, the assessee has explained that the failure to respond was not deliberate but occurred due to reasons beyond its control. Furthermore, the ld. AR before us undertakes for necessary compliances on behalf of the assessee. In these circumstances, we are of the view that the assessee deserves one more opportunity to place its facts, explanations, and evidences before the Assessing Officer.