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Facts
The assessee, a co-operative society, filed its return of income. The Assessing Officer made additions under Section 143(3) read with Section 147. The CIT(A) dismissed the appeal ex-parte as the assessee did not file submissions.
Held
The Tribunal restored the issue to the file of the Assessing Officer to grant one final opportunity to the assessee to substantiate its case by filing requisite details, considering the bank's liquidation.
Key Issues
Whether the assessee should be granted another opportunity to present its case before the Assessing Officer, especially in light of the bank's liquidation, after an ex-parte order by CIT(A) due to non-submission.
Sections Cited
143(3), 147, 148, 36(1)(viia), 40(a)(ia), 35A, 56
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
This appeal filed by the assessee is directed against the order dated 27.01.2025 of the Ld. CIT(A) / NFAC, relating to assessment year 2011-12.
Although a number of grounds have been raised by the assessee, however, these all relate to the ex-parte order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.37,22,813/- made by the Assessing Officer in the order passed u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
Facts of the case, in brief, are that the assessee is a co-operative society and filed its return of income on 16.08.2011 declaring total income of Rs.2,50,27,313/-.
The case was selected for scrutiny. Accordingly, statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee in response to which the AR of the assessee filed the requisite details. The Assessing Officer completed the assessment on 24.01.2014 determining the total income at Rs.3,01,06,640/- by making addition on account of interest on sticky advances of Rs.45,89,499/-, amortization of premium on Govt. securities of Rs.4,60,592/- and excess deduction claimed u/s 36(1)(viia) of Rs.29,242/- totaling to Rs.50,79,333/-. The assessee preferred an appeal and the Ld. CIT(A) deleted the addition on account of interest on sticky advances and amortization of premium on Govt. securities. The Revenue filed appeal before the Tribunal which was decided in favour of the assessee.
Subsequently, a notice u/s 148 of the Act was issued on 24.03.2018 after recording reasons and obtaining the approval from the competent authority. The assessee in response to the same field its return of income declaring total income of Rs.2,50,27,310/-. Subsequently statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee in response to which the assessee filed the requisite details from time to time. The Assessing Officer completed the assessment u/s 143(3) r.w.s. 147 of the Act on 30.11.2018 determining the total income of the assessee at Rs.2,87,50,130/- by making the following additions: a) addition of Rs.1,63,489/- on account of disallowance of interest paid to HUF u/s 40(a)(ia) of the Act; b) addition of Rs.35,30,082/- on account of disallowance of interest paid to co-operative society u/s 40(a)(ia) of the Act; and c) addition of Rs.29,242/- on account of disallowance of excess deduction claimed u/s 36(1)(viia) of the Act.
Since the assessee did not file any submission before the Ld. CIT(A) / NFAC despite number of opportunities granted, the Ld. CIT(A) / NFAC dismissed the appeal filed by the assessee.
Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.
The Ld. Counsel for the assessee submitted that the bank has gone under liquidation for which the activities were stopped and therefore, there was no compliance from the side of the assessee. He filed a copy of the direction of the Reserve Bank of India u/s 35A r.w.s. 56 of the Banking Regulation Act, 1949 dated 23.02.2023 to this effect. He submitted that the issue involved in the present appeal is squarely covered in favour of the assessee by various decisions of the Co- ordinate Benches of the Tribunal. He accordingly submitted that either relief should be granted to the assessee or the matter may be restored to the file of the Ld. CIT(A) / NFAC or the Assessing Officer with a direction to grant one more opportunity to the assessee to substantiate its case by filing the requisite details.
The Ld. DR on the other hand heavily opposed the arguments advanced by the Ld. Counsel for the assessee and submitted that despite number of opportunities granted the assessee never bothered to make any submission before the Ld. CIT(A) / NFAC. He accordingly submitted that the order of the Ld. CIT(A) / NFAC dismissing the appeal filed by the assessee should be upheld and the grounds raised by the assessee be dismissed.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that despite number of opportunities granted the assessee did not make any submission for which the Ld. CIT(A) / NFAC dismissed the appeal filed by the assessee. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details before the Assessing Officer. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to appear before the Assessing Officer on the appointed date and make its submissions, if any, without seeking any adjournment under any pretext failing which the Assessing Officer shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court at the conclusion of hearing itself i.e. on 1st July, 2025.