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Facts
The assessee, a primary agricultural credit society, filed a return declaring NIL income after claiming a Section 80P deduction. The AO framed an ex-parte assessment under Section 144, denying the Section 80P deduction, after the assessee failed to respond to notices under Sections 143(2)/142(1). The CIT(A) dismissed the assessee's first appeal due to a 442-day delay, which the assessee attributed to fraudulent activities by a previous CA, an un-updated email ID in the tax portal, and a change in branch manager.
Held
The Tribunal condoned the delay in filing the first appeal, noting that no prejudice would be caused to the revenue by remanding the matter. The case was remitted back to the Assessing Officer for fresh adjudication, with directions for the AO to provide proper hearing opportunities and for the assessee to remain vigilant and participate in future hearings.
Key Issues
Condonation of delay in filing the first appeal before CIT(A); validity of ex-parte assessment and denial of Section 80P deduction.
Sections Cited
144, 144B, 80P, 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by order of first-appeal dated 19.11.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 06.09.2022 passed by learned Assessment Unit of Income-tax Department [“AO”] u/s 144 read with section 144B of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2020-21, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).
The background facts leading to present appeal are such that the assessee is a primary agricultural credit society claiming to be engaged in the activity of banking/providing credit facility to its members. For AY 2020- 21 under consideration, the assessee filed return declaring total income at Rs. Nil after claiming deduction of Rs. 40,38,360/- u/s 80P. The case of assessee was selected for scrutiny but finding no reply from assessee to the notices u/s 143(2)/142(1), the AO ultimately framed assessment u/s 144 reclassifying assessee’s income as Income from Other Sources and denying deduction u/s 80P. Aggrieved, the assessee carried matter in first-appeal before CIT(A) but the CIT(A) dismissed assessee’s appeal in limine on the ground of delayed filing by 442 days. Now, the assessee has come in next appeal before us.
Ld. AR for assessee at first carried us to Para 2 of assessment-order to show that the case of assessee was handled by CA Shri Amit Goyal and his personal email id amit26_goyal@rediffmail.com was supplied in assessee’s database with Income-tax Department to which notices u/s 143(2), 142(1) and Show-Cause notice u/s 144 were given by AO. However, CA Shri Amit Goyal was found to have been engaged in fraudulent activities in collusion with certain bank officials and did not take care of assessee-society’s tax affairs which had led to passing of assessment-order as ex-parte as well as non-filing of first appeal in time. Finally, the assessee-society changed its counsel and appointed M/s JRNG & Associates, Chartered Accountants, to deal its cases. However, the email id of previous counsel continued in the Page 2 of 11 departmental database. Further, there was a change in branch manager of assessee-society due to retirement of Shri Praveen Kashiv in whose place Shri Shankar Malviya was appointed as new branch manager. Ld. AR submitted that because of these developments, there occurred delay in filing of first-appeal to CIT(A). Ld. AR submitted that the assessee filed first-appeal to CIT(A) with a request for condonation of delay and explained the reasoning of delay but the Ld. CIT(A) dismissed assessee’s appeal in limine on the footing that the supporting documents were not filed. The relevant paras noted by CIT(A) in this regard read as under:
“2.14 The main reasons submitted for delay in filing appeal are that the previous consultant CA Amit Goyal was changed and appointed new consultant JNRG & Associates; that there was the delay due to this gap in the appointment and the Email ID was not updated on the portal so that no one pays attention on this matter, that the Branch
Manager, who is a local person who is a not much qualified person looking to the job profile that he is majorly required to interact with the rural farmers and for accounting and filing of returns etc., they are not aware the consequences about that, that the assessee was unaware about the prior notices: the previous Consultant was not informed to the assessee and after the updating Email id and access to Income tax portal by new consultant now action is being taken in this regard.
2.15 However, no supporting evidences like affidavits from the assessee or his counsels has been filed during appellate proceedings,
Page 3 of 11 in spite of requesting to do so. Further, the assessee has not specified date of appointment of new counsel; has not submitted any details of old counsel who alleged not informed the assessee about notices or order. Moreover, the assessee had also not explained the efforts taken by the assessee for filing the appeal in time.”
Ld. AR next submitted that the assessee-society has now filed an Interlocutory Application before ITAT seeking condonation of delay in first- appeal duly supported by documents required by CIT(A), namely (i) the affidavit of Shri Shankar Malviya, new branch manager of assessee-society, and (ii) the affidavit of CA Renu Yadav of M/s JNRG & Associates, the new counsel of assessee appointed after removal of previous counsel CA Shri Amit Goyal. These documents are scanned and re-produced below:
Page 4 of 11 Page 5 of 11 Page 6 of 11 Page 7 of 11 Page 8 of 11 Page 9 of 11
Ld. AR re-iterated the contents of above Interlocutory Application line by line in open court with supporting documents to explain the reasoning of delay in filing first-appeal and finally made two-fold prayers as stated in last para of Application i.e. (i) the prayer to condone delay which had occurred in filing first-appeal, and (ii) the prayer to remand this matter for re- consideration on merit. Ld. AR prays that since the assessment-order passed by AO is also ex-parte, it would be more appropriate to remand this matter to the file of AO.
Ld. DR for revenue having heard the submissions of assessee as mentioned in the Interlocutory Application as reiterated by Ld. AR in open court, felt convinced and submitted that he would have no objection if the delay in first-appeal is condoned and the present matter is remanded to AO.
He, however, submitted that the assessee should be directed to stay diligent and make representation as and when called upon by AO.
Considering the above submissions of learned Representatives; having regard to the facts as submitted in Interlocutory Application; having regard to the principle of natural justice and also bearing in mind that no prejudice would be caused to revenue if the present matter is restored at the level of AO for an appropriate adjudication in accordance with law, we condone the delay in first-appeal and also remand this matter back to the file of AO for adjudication afresh, at the risk and responsibility of assessee. The AO shall give necessary opportunity of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to Page 10 of 11 remain vigilant and ensure participation in the hearings as may be fixed by AO and do not seek unnecessary adjournments failing which the AO shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly.
Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court on 25/06/2025