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Facts
The assessee, a Co-operative Credit Society, filed its return of income and claimed deduction under Section 80P. The Assessing Officer disallowed the deduction and assessed a higher total income. The assessee's first appeal before the NFAC was dismissed ex-parte.
Held
The Tribunal restored the appeal to the NFAC for adjudication on merits, acknowledging that the assessee missed the hearing due to their accountant's preoccupation. The assessee was cautioned to comply with future notices.
Key Issues
Whether the ex-parte dismissal of the appeal by NFAC was justified and whether the assessee deserves another opportunity to present its case on merits.
Sections Cited
80P, 143(1), 142(1), 80P(2)(a)(i), 143(3), 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA & SHRI ANADEE NATH MISSHRA
This appeal has been preferred by the assessee against the order dated 11.11.2024, passed by the ld. Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2018-19.
The brief facts of the case are that the assessee is a Co- operative Credit Society, registered under Uttar Pradesh Co- operative Societies Act, 1966. The assessee filed its return of income for the year under consideration on 30.03.2019, declaring a total income of Rs.7,97,500/-. The assessee had also claimed deduction under Section 80P of the Income Tax Act, 1961 (hereinafter called “the Act’). The return was processed under Page 2 of 5 section 143(1) of the Act. Subsequently, the case was selected for Limited Scrutiny under CASS. The Assessing Officer (AO) issued notice under section 142(1) of the Act. In response to the notice, the assessee submitted that “the assessee is Co-operative Society engaged in the business of providing credit facilities to its members”. The AO, from a perusal of record, noticed that the assessee had advanced loans to its regular members/Employee Housing Loan, totaling to Rs.12,41,72,834/- and had earned profit/interest to the tune of Rs.1,40,39,520/- during the year under consideration. The profit/interest so earned by the assessee was disallowed by the AO under section 80P(2)(a)(i) of the Act and was added to the total income of the assessee. The AO completed the assessment under section 143(3) read with section 144B of the Act, assessing the total income of the assessee at Rs.1,48,37,020/-.
Aggrieved, the Assessee preferred an appeal before 3. the NFAC. The appeal of the Assessee came to be dismissed in limine by passing an order ex-parte qua the Assessee.
Now, the assessee has approached this Tribunal challenging the dismissal of its appeal by the NFAC by raising the following grounds of appeal:
1. That the Ld. Assessing Officer (herein referred to as the Ld. AO) as well as the Ld. Commissioner of Income Tax (Appeals), Page 3 of 5 [here-in-after referred to as the Ld. CIT(A)] have erred in assessing the income at Rs.1,48,37,020/- against the returned income of Rs.7,97,500/- and sustaining addition made by the Ld. Assessing Officer against the facts and circumstances of the case.
2. That the Ld. CIT (A), has erred in law as well as on facts of the case in denying the claim of deduction made by the appellant Society u/s. 80P(2)(a)(i) of the Act. The claim of deduction so denied, being totally contrary to the provision of law and facts be kindly be allowed as claimed.
3. That the Ld. CIT(A) has erred in law and on facts in upholding the disallowance made by the Ld. AO without appreciating the facts and explanations provided by the appellant in the course of appeal proceedings, and dealing in the merits of the case and written submissions filed before the Ld. CIT(A).
4. That the appellate order was passed in haste without providing sufficient opportunity to the appellant which is against the principles of natural justice.
5. That the appellant craves leave to add to or amend the aforesaid grounds before disposal of the appeal.
The ld. Authorized Representative for the Assessee submitted before us that due to pre-occupation of the Accountant of the assessee in finalization of accounts, the assessee could not be represented before the NFAC, resulting into passing of an order ex-parte qua the Assessee. The ld. AR prayed
Since the order passed by NFAC was an ex-parte order, the ld. Senior D.R. had no objection to the restoration of appeal to the NFAC.
We have heard both the parties and have also perused the material on record. Looking into the facts of this case, we are of the considered view that the Assessee deserves one more opportunity to present its case and, therefore, in the facts of the case, we restore this file to the Office of the NFAC with the direction to hear the appeal on merits. We also caution the Assessee to fully comply with the notices and directions of the NFAC in the set-aside proceedings when called upon to do so, failing which, the NFAC would be at complete liberty to pass the order in accordance with law, based on material available on record even if it is ex-parte qua the assessee.
In the result, the appeal of the Assessee stands allowed for statistical purposes.
Order pronounced in the open Court on 24/02/2025.