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Facts
The assessee, a cooperative bank, filed NIL income for AY 2020-21 claiming Section 80P deduction. The National Faceless Assessment Centre completed an ex-parte assessment, disallowing the Section 80P claim and making significant additions under Sections 68, 37, and 69. The CIT(A) subsequently dismissed the assessee's appeal for non-prosecution, as the assessee contended that the email notices for hearing went unnoticed and were not served physically.
Held
The Income Tax Appellate Tribunal (ITAT) held that the CIT(A) is duty-bound to dispose of appeals on merits, even ex-parte, as per Section 250(6) of the Income Tax Act and judicial precedents. Consequently, the ITAT remanded the matter back to the file of the CIT(A) for a de novo disposal on merits, after providing the assessee a reasonable opportunity of hearing.
Key Issues
Whether the CIT(A) can dismiss an appeal for non-prosecution without deciding it on merits, especially when the appellant claims non-receipt of hearing notices sent via email.
Sections Cited
80P, 143(3), 144B, 68, 37, 69, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (in short CIT(A)), dated 19/12/2024 for Assessment Year (AY) 2020-21.
Briefly the facts of the case are that the appellant is duly registered under the Kerala Cooperative Societies Act, 1969. It is engaged in the Neerikode Service Coop Bank Ltd vs. ITO business of accepting deposits from members and providing credit facilities to its members. The Return of Income for the AY 2020-21 was filed on 15/01/2021 declaring NIL income after claiming deduction U/s. 80P of the Income Tax Act, 1961 (in short “the Act”). Against the said return of income, the assessment was completed by National Faceless Assessment Centre, Delhi (hereinafter referred to “Assessing Authority”) vide order dated 24/09/2022 passed U/s. 143(3) r.w.s 144B of the Income Tax Act, 1961 (in short “the Act”) at a total income of Rs. 47,20,94,972/- after making disallowance of assessee’s claim for deduction of Rs. 4,57,32,452/- U/s. 80P; addition U/s.68 of Rs. 28,75,23,859/-; disallowance of interest U/s. 37 of Rs. 13,58,04,206/- and addition U/s.69 of Rs. 30,34,455/- for the failure of the assessee to comply with the hearing notices. Thus, assessment was completed ex-parte.
Being aggrieved by the above assessment order, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal for non-prosecution.
Being aggrieved, the appellant is in appeal before us in the present appeal.
It is submitted that the appellant could not comply with the hearing notices issued by the CIT(A) as the hearing notices were not served in the physical mode and the notices were sent through email which went unnoticed. Therefore, it is prayed that the order passed by the CIT(A) may be set-aside and the matter may be remanded back to the file of the CIT(A).
Neerikode Service Coop Bank Ltd vs. ITO 6. On the other hand, the Ld. CIT-DR opposed the submissions of assessee and submits that the appellant had not complied with the notices issued by the CIT(A)-NFAC as well as the Assessing Authority and therefore, no indulgence is required to be granted to the assessee.
We have heard the rival submissions and perused the material available on record. From the reading of CIT(A)’s order, it is evident that the CIT(A)- NFAC had dismissed the appeal in limine for non-prosecution. As contemplated u/s. 250(6) of the Act the CIT(A) is required to frame points of determination followed by a detailed discussion thereupon before passing the order. It is the settled position of law that the CIT(A), even while disposing of the appeal exparte, is duty bound to dispose of the appeal on merits. Reliance in this regard can be placed on the decision of the Hon'ble Bombay High Court in the case of PCIT vs. Premkumar Arjundas Luthra 279 CTR 614. Therefore, in the light of the above legal position we are of the considered view that the matter requires to be remanded to the file of the CIT(A) with a direction to dispose of the appeal de novo on merits after affording reasonable opportunity of hearing to the assessee.
In the result, appeal filed by the assessee is partly allowed.
Order pronounced in the open court on 30th June, 2025.