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Facts
The assessee, Dausa Central Cooperative Bank Ltd., filed its return of income and was selected for limited scrutiny. The AO made disallowances under Section 14A and Section 80P. The CIT(A) dismissed the assessee's appeal ex-parte.
Held
The tribunal condoned the delay in filing the appeal and noted the ex-parte nature of the CIT(A)'s order. The appeals were restored to the file of the CIT(A) for a fresh hearing with a direction to the assessee to update its communication details.
Key Issues
Whether the appeals should be restored to the CIT(A) for fresh hearing due to ex-parte order and delay in filing, and to decide on the merits of the disallowances made by the AO.
Sections Cited
250, 14A, 80P, 271(1)(c), 2(24)(x), 36(1)(va)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCH “A”, JAIPUR
Before: SHRI GAGAN GOYAL & SHRI NARINDER KUMAR
These two appeals by assessee are directed against the order of NFAC, Delhi dated 29/05/2023& 06/11/2023 passed u/s. 250 of the Income Tax Act, 1961 (in short ‘the Act’) for A.Y.s 2015-16 & 2017-18.
1.On facts and in circumstances of the case and in law Ld. CIT(A) has grossly erred in confirming the action of Ld. AO by disallowing expenditure of Rs.48,76,126/- on mere conjecture and surmise. Such disallowance is invalid in law and deserves to be quashed.
2. On facts and in circumstances of the case and in law Ld. CIT(A) has erred in confirming the initiation of the provision of section 14A of the Income Tax Act, 1961 by the AO. Such confirmation being irrelevant and illogical deserves to be quashed.
3. On the facts and circumstances of the case and in law the Ld. CIT(A) was incorrect in confirming the addition of Rs.68,41,631/- in the total income of the assessee by AO. Such an addition against the provisions of the Income Tax Act, 1961, hence deserves to be set aside.
4. On the facts and circumstances of the case and in law Ld. CIT(A) has erred in confirming the disallowance of the benefit of section 80P of the Income Tax Act, 1961 by AO, such confirmation being illogical as well as irrelevant hence deserves to be set aside.
5. On the facts and circumstances of the case and in law Ld. CIT(A) and AO has erred in initiating penalty proceedings u/s. 271(1)(c) of the Income Tax Act, 1961, same being unlawful and unjust deserves to be set aside.
That the appellant reserves the right to add/alter/ modify/ deleted any or all grounds at any time before the hearing.
The brief facts of the case are that the assessee cooperative bank filed its return of income on 12.10.2015 declaring total income at Rs. 2,92,45,850/-. The case of the assessee was selected for limited scrutiny under CASS for the following reasons:
A). Mismatch in sales turnover reported in Audit Report and ITR. B). High Interest expenditure against new capital added in work-in-progress or addition made to Fixed Assets and Large deduction claimed under Chapter VI A. C).
After a detailed deliberation between the assessee and the AO, the case of the assessee was assessed after making disallowance u/s. 14A of the Act r.w.r. 8D of the Rules amounting to Rs. 48,76,126/- and disallowance u/s. 80P of the Act amounting to Rs. 68,41,631/-. The assessee, being aggrieved with the same preferred an appeal before the Ld. CIT (A), who in turn dismissed the appeal of the assessee as none appeared/participated before him on behalf of the assessee. The assessee being further aggrieved with this ex-parte order of the Ld. CIT (A) preferred the present appeal before us.
Before we proceed to adjudicate the matter before us, it is pointed out by the registry that the matter before us is time barred by 483 days in terms of the filing of appeal. The assessee filed an application for condonation of delay along with a duly attested affidavit to justify the delay in the filing of appeal. We have gone through the contents of the application filed for condonation of delay and heard the arguments of the Ld. A/R of the assessee on the issue. In our considered opinion the assessee has a reasonable cause for not filing the appeal on time as there was a total communication gap between the assessee and its authorised representative, further there was no objection raised by the Ld. DR from the department. In view of this, delay in filing of appeal is condoned and matter is taken up for substantive hearing.
It is observed that a total of four opportunities were provided to the assessee by the office of Ld. CIT (A) vide para 4 of the appeal order, but there was no compliance made by the A/R of the assessee on designated dates. Hence, the matter was disposed of Ex-parte without discussing the merits of the matter. As discussed, (supra) delay in filing of appeal has been condoned by this bench and a major reason of delay before us as well as non-participation before the Ld. CIT (A) was communication gap between the assessee and its authorised representative. In view of this matter is restored back to the file of the Ld. CIT (A) for fresh hearing after giving the assessee a proper opportunity of being heard and the assessee is directed to update its communication addresses and e-mail ids with the office of the concerned Ld. CIT (A) and participate in the proceedings without failure and seeking any adjournment, treating the same as final opportunity to represent its case. In these terms, grounds raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes. for A.Y 2017-18, the assessee has raised the following grounds of appeal:
1. On facts and in circumstances of the case and in law Ld. CIT(A) has grossly erred in confirming the action of Ld. AO by adding ₹11,46,412/- in the Total Income of the assessee, such addition to the total income of the assessee is invalid in law and deserves to be quashed.
2. On facts and in circumstances of the case and in law Ld. CIT (A) has grossly erred in confirming the action of Ld. AO by disallowing PF deposited of ₹ 11, 46,412/- u/s. 2(24)(x) r.w.s. 36(1) (va) of the Income Tax Act, 1961, such confirmation being invalid illogical and invalid in law and deserves to be set aside.
3. On facts and in circumstances of the case and in law Ld. CIT(A) grossly erred in confirming the action of Ld. AO by adding Rs. 89,95,824/- in the Total Income of the assessee, such addition to the total income of the assessee is invalid in law and deserves to be quashed.
4. On facts and in circumstances of the case and in law Ld. CIT(A) has erred in confirming disallowance of Rs. 89,95,824/- u/s. 14A r.w.r. 8D of the Income Tax Act, 1961 by AO, such disallowance being illogical and invalid in law and deserves to be quashed.
5. That the appellant reserves the right to add/alter/modify/ deleted any or all grounds at any time before the hearing.
6. As the facts of delay in filing of appeal before us and Ex-parte decision by the office of Ld. CIT (A) is there in this appeal also. Our findings and decision in A.Y. 2015-16 will apply mutatis mutandis to this appeal also. In view of this matter is restored back to the file of the Ld. CIT (A) for fresh hearing after giving the assessee a proper opportunity of being heard and the assessee is directed to update its communication addresses and e-mail ids with the office of the concerned Ld. CIT (A) and participate in the proceedings without failure and seeking any adjournment, treating the same as final opportunity to represent its case. In these terms, grounds raised by the assessee are allowed for statistical purposes.
In the result both the appeals of the assessee is allowed for statistical purposes with a amounting of Rs. 10,000/- as cost to be deposited in Prime Minister Relief Fund.
Order is pronounced in the open court on the 9th Day of April 2025.