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Facts
The assessee, a co-operative society, did not file an Income Tax Return (ITR) for AY 2019-2020. After reopening under Section 148A based on substantial cash deposits, the assessee filed a belated return claiming nil income under Section 80P(2)(a)(i). The AO disallowed the deduction due to the late filing of the ITR, and the ld. CIT(A) dismissed the assessee's appeal ex parte.
Held
The Tribunal found it unclear whether notice for hearing was properly served on the assessee by the ld. CIT(A) before the ex parte dismissal. Emphasizing the ld. CIT(A)'s duty to decide appeals on merits under Section 250(6), the Tribunal restored the matter for fresh examination, directing the ld. CIT(A) to provide a meaningful opportunity of hearing and consider the High Court judgment in Nileshwar Range Kallu Chethu Vyavasaya Thozhilali Sahakarana Sangham v. CIT.
Key Issues
The key issues were the validity of the ex parte dismissal by the ld. CIT(A) due to unclear service of notice, and the disallowance of deduction under Section 80P(2)(a)(i) for a co-operative society because of the belated filing of the Income Tax Return.
Sections Cited
148A, 148, 80P(2)(a)(i), 139(1), 80A(5), 250(6)
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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Inturi Rama Rao & Shri Prakash Chand Yadav
Asst.Year 2019-2020 The Asamannoor Agricultural The Income Tax Officer Improvement Co-operative Society Ward 1 & TPS v. Limited, Asamannoor, Odakkali Aluva. Ernakulam – 683 549. PAN : AAFAA0536P. (Appellant) (Respondent) Appellant by : Sri.C.A.Jojo, Advocate Respondent by : Smt.Leena Lal, Sr.AR Date of Pronouncement : 20.05.2025 Date of Hearing : 19.05.2025. O R D E R
Per Prakash Chand Yadav, JM :
The present appeal of the assessee is arising from the order of the National Faceless Appeal Centre / learned Commissioner of Income-tax (Appeals) [“CIT(A)” for short] dated 25.10.2024, having DIN & Order No.ITBA/NFAC/S/250/2024- 25/1069962084(1) and relates to the assessment year 2019- 2020.
The brief facts of the case as coming out from the orders of the authorities below are that the assessee is a co-operative society and has not filed any return of income for the impugned year. Thereafter on the basis of an information, revealing that the assessee has made substantial cash deposit in its bank account with Ernakulam District Co-operative Bank, the case of the assessee has been reopened u/s.148A of . The Asamannoor Agricultural Improvement Co-op So.Ltd. the Income-tax Act, 1961 (“the Act” hereinafter),. Thereafter, the Assessing Officer issued notice u/s.148 of the Act on 30th March, 2023 in respect of the impugned year. In response to this notice, the assessee filed its return of income on 27th April, 2023 declaring Nil income after claiming deduction u/s. 80P(2)(a)(i) of the Act. However, the AO disallowed the claim of the deduction claimed by the assessee on the ground that the assessee has not filed return within the time prescribed u/s.139(1) of the Act, and hence, as per the provisions of sec.80A(5) of the Act, the assessee is not entitled for the deduction. It is relevant to mention here that the AO has not made any addition qua cash deposited by the assessee in Ernakulam District Co-operative Bank.
Aggrieved with the order of the AO, the assessee preferred appeal before the ld.CIT(A). However, there was no compliance before the ld.CIT(A) from the side of the assessee and hence the ld.CIT(A) decided the appeal ex parte against the assessee.
Aggrieved with the order of the ld.CIT(A), the assessee has come up in appeal before us. The learned Counsel for the assessee, at the outset, requested that the matter may be restored to the file of the ld.CIT(A) as there was no service of notice on the assessee from the ld.CIT(A) before passing the impugned order.
The learned DR relied upon the orders of the authorities below.
. The Asamannoor Agricultural Improvement Co-op So.Ltd.
We have heard the rival submissions and perused the material available on record. In this case, perusal of the CIT(A)’s order para 4.1 would show that the ld.CIT(A) has issued three notices to the assessee and that too via ITBA Portal and thereafter the CIT(A) has dismissed the appeal of the assessee, making certain observations vis-à-vis the merits of the case. Perusal of the order of the CIT(A) would show that it is not clear as to whether any notice of hearing was actually served on the assessee or not. It is settled position of law that the ld.CIT(A) is duty bound to decide the appeal on merits in terms of the provisions of sec.250(6) of the Act. Considering all the facts and circumstances of the case, we restore this matter to the file of the ld.CIT(A) for examining afresh, in accordance with law. Before parting we would like to observe that the ld.CIT(A) will decided the case of the assessee in the light of the judgment of the Hon’ble jurisdictional High Court in the case of Nileshwar Range Kallu Chethu Vyavasaya Thozhilali Sahakarana Sangham v. CIT (2023) 459 ITR 730 (Ker.). Needless to say, the ld.CIT(A) shall afford meaningful opportunity of being heard to the assessee before passing any order.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 20th day of May, 2025.