KOYILANDY TALUK GOVERNMENT EMPLOYEES CO-OPERATIVE SOCIETY,KOZHIKODE vs. ITO,WARD 2(2), KOZHIKODE

This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Kozhikode [hereinafter “CIT(A)”], for the assessment year 2018–19.

Brief Facts of the case are that the assessee is a co-operative society registered under the Societies Registration Act, 1860, providing financial accommodation facilities to its members, who are employees of the state government. The society is subject to co-operative audit under the Kerala Co-operative Societies Act. The assessee, under the bona fide belief that it had no taxable income during the relevant year, did not file its return of income for A.Y. 2018–19.The Assessing Officer noted a cash deposit of Rs. 57,76,285 in the society’s account with Kozhikode District Bank and initiated proceedings under Section 148A(b) of the Act. In response, the assessee filed a reply and submitted supporting documents. However, the AO proceeded to pass an order under Section 148A(b), making an addition of Rs. 57,76,285.

Aggrieved, the assessee filed an appeal before the Ld.CIT(A). However, due to non-compliance and absence during hearings, the appeal was decided ex parte, without affording an opportunity to the assessee to substantiate its claim.

The assessee has challenged the CIT(A)’s order before us on the ground of lack of proper opportunity, and also moved a petition for condonation of delay of 217 days in filing the appeal before the Tribunal.

We have considered the rival contentions and materials on record. It is evident that the Ld. CIT(A) passed an ex parte order due to non- appearance by the assessee. However, keeping in view the principles of natural justice and the cooperative character of the assessee, we are of the opinion that one more opportunity should be given to the assessee to represent its case.We also note that the delay of 217 days in filing the appeal has been explained by the assessee, and we are satisfied with the reasons stated. Accordingly, the delay is condoned. In the interest of justice, we remit the matter back to the CIT(A) with a direction to provide a proper opportunity of hearing to the assessee and dispose of the appeal afresh on merits.The assessee is also directed to comply with the notices and proceedings diligently and cooperate with the Ld. CIT(A) in expeditious disposal of the appeal.

In view of the above, the appeal of the assessee is allowed for statistical purposes, with the matter restored to the file of the CIT(A) for fresh adjudication.