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Facts
The assessee, a Cooperative Housing Society, filed its return claiming a deduction under Section 80P(2)(d). The CPC initially disallowed the claim, and subsequent rectification and appeal to CIT(A) also resulted in disallowance. The CIT(A) dismissed the appeal for non-prosecution despite the assessee not appearing.
Held
The Tribunal held that the CIT(A) has the power to decide appeals on merit and cannot dismiss an appeal for non-prosecution, citing the judgment of the Hon'ble Bombay High Court. The order of the CIT(A) was set aside for de novo adjudication.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-prosecution without deciding the merits of the case, and whether the CIT(A)'s order was a speaking order.
Sections Cited
250, 143(1), 154, 80P(2)(d), 251, 246A, 250(4), 250(6), 251(1)(a), 251(1)(b), 251(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
Assessment Year: 2020-21 Pinnac Parijaat Co. Op. V The Income tax Officer, Housing Society Limited, s Ward-2(2), Pune. S.No.35, Hissa No.1,3,4,5,11,12, Karve Nagar, Pune – 411052. PAN: AADAP9430D Appellant/ Assessee Respondent / Revenue Assessee by None Revenue by Shri Harish Bist – Addl.CIT(DR) Date of hearing 03/04/2025 Date of pronouncement 09/04/2025 आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by the assessee is against the order of ld.Commissioner of Income Tax(Appeals)/[NFAC], passed under section 250 of the Income Tax Act, 1961, on 24.12.2024 for Assessment Year 2020-21. The assessee has raised the following grounds of appeal :
1. The learned CIT(A) erred in law and on facts in confirming the total income of the appellant at Rs. 3,13,990/-instead of 1,01,830/-
The learned CIT(A) erred in laws and on facts in sustaining the disallowance of the deduction of Rs. 2,12,161 u/s 80P(2)(d) of the ITA, 1961 made by the learned ADIT-CPC and the same as interest income derived from its investments held with various Co-operative banks and other financial institutions.
The learned CIT(A) failed to consider that the appellant had a bona fide claim under Section 80P(2)(d), and the disallowance has resulted in an unjust tax demand.
4. The appellant contends that, though the appellant did not file submissions before the learned CIT(A), the claim of deduction is legally valid, and the appellant craves the opportunity to present the merits of the case before the Hon'ble ITAT. 5. The appellant contends that, the appellant is eligible for deduction u/s 80P(2)(d) of the IT Act, 1961 being a co-operative society which has earned interest from the investments made with Co-operative Banks. 6. Appellant craves leave to add/alter/modify/amend/delete all or any of the grounds of appeal
.”
2. At the time of hearing, no one appeared on behalf of the assessee. No adjournment letter has been filed.
Findings & Analysis : 2. Assessee is a Cooperative Housing Society formed on 01.08.2014. Assessee had filed Return of Income for A.Y.2020-21 on 09.02.2021 claiming deduction under section 80P(2)(d) of the Act of Rs.2,12,161/-. The order under section 143(1) was passed by CPC, Bangalore disallowing assessee’s claim for deduction under section 80P(2)(d) of the Act. Assessee claimed that since no specific reason was mentioned in the order under section 143(1) for denying the claim of Assessee for deduction u/s.80P(2)(d) of the Act, assessee filed a rectification application under section 154 of the Act. The CPC Bangalore passed an order under section 154 of the Act on 29.06.2022, again denying the deduction claimed by assessee. Aggrieved by the order u/s.154 of the Act, assessee filed appeal before the ld.CIT(A). However, ld.CIT(A) dismissed the appeal of the assessee stating that appellant failed to file required evidence. It is observed that ld.CIT(A) had issued three notices and assessee had failed to comply the notices. However, it is also observed that ld.CIT(A) has not adjudicated the grounds of appeal raised by assessee. Ld.CIT(A) has merely confirmed the order u/s.154 of the Act. It is also observed that the order u/s.154 of the Act is not a speaking order. It has been held by various Hon’ble High Courts that order u/s.154 should be a speaking order giving specific reason. In this case, the order u/s.154 has not mentioned any reasons. Similarly, ld.CIT(A) has not adjudicated the grounds. In this case, assessee had filed return of income within the due date.
2.1 The Hon’ble Bombay High Court has held in the case of Pr.CIT(Central) Vs. Premkumar Arjundas Luthra (HUF)(Bombay)/[2017] 297 CTR 614 (Bombay) as under :
Quote, “8.From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is coterminous with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non- prosecution as is evident from the provisions of the Act.” Unquote. 2.2. Thus, the Hon’ble Bombay High Court has categorically held that ld.CIT(A) has to decide the appeal on merit and ld.CIT(A) does not have any power to dismiss appeal for non-prosecution.
3. In view of the above, the order of the ld.CIT(A)/NFAC is set- aside to ld.CIT(A)/NFAC for denovo adjudication. The ld.CIT(A)/NFAC shall provide opportunity of hearing to the assessee. Assessee shall file necessary documents before the ld.CIT(A)/NFAC. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.
In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 9th April, 2025.