THE KILIMANOOR CO-OP AGRICULTURAL AND RURAL DEVELOPMENT BANK,THIRUVANANTHAPURAM vs. ITO,WARD 2(1), TRIVANDRUM

This appeal filed by the assessee is directed against the ex parte order of the Commissioner of Income Tax (Appeals), for the assessment year 2018–19.

Brief Facts are that the assessee is an Agriculture and Development Bank. For the assessment year 2018–19, it did not file its return of income, contending that it had incurred a substantial loss from its banking operations during the relevant period. The case was reopened by issuance of a notice under Section 148A(b) of the Income- tax Act, 1961, on account of cash deposits amounting to Rs. 2.36 crores and cash withdrawals of Rs. 1.01 crore in the assessee’s bank account. The assessee did not respond to the said notice, and subsequently, notice under Section 142(1) was also issued. However, there was again no compliance. As a result, the Assessing Officer proceeded to complete the assessment ex parte under Section 144 read with Section 148, determining the total income of the assessee at Rs. 3,92,55,039.

Aggrieved, the assessee preferred an appeal before the CIT(A). However, due to continued non-compliance, the Ld. CIT(A) passed the order ex parte, dismissing the appeal.

The assessee has now come before the Tribunal, raising several grounds. The primary contention is that the CIT(A) erred in disposing of the appeal ex parte, thereby depriving the assessee of a fair opportunity to present its case and submit supporting documents.

We have carefully considered the rival contentions and the material available on record. It is undisputed that the order of the Ld. CIT(A) was passed ex parte, without adjudicating the merits of the assessee’s claim due to its non-appearance. While we note the non-cooperation by the assessee in earlier proceedings, we are also guided by the principle of natural justice. Given the magnitude of the addition and the assessee’s status as a cooperative banking institution, one final opportunity should be afforded to substantiate its contentions. In the interest of justice and fair play, we deem it fit to remand the matter back to the file of the Ld. CIT(A) for fresh adjudication. The assessee is directed to appear before the CIT(A) on the date of hearing and comply with all notices issued, failing which, the CIT(A) shall be at liberty to pass appropriate orders in accordance with law. Accordingly, the ex parte order passed by the CIT(A) is set aside, and the matter is restored to his file for disposal afresh after granting due opportunity of hearing.

In the result, the appeal of the assessee is allowed for statistical purposes.