KUTHANUR SERVICE CO-OPERATIVE BANK LIMITED,KUTHANUR, PALAKKAD vs. INCOME TAX OFFICER, WARD 1, PALAKKAD

Brief facts of the case are that appellant is a co-operative society registered under the Kerala State Co-operative Societies Act, 1969. The return of income for AY 2014-15 was filed on 27.03.2015 declaring nil income after claiming deduction u/s. 80P of the Income Tax Act, 1961 (the Act). Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-1, Palakkad (hereinafter Kuthanur Service Co-op. Bank Ltd. called "the AO") vide order dated 19.12.2016 at a total income of Rs. 29,24,510/-. While doing so, the AO disallowed deduction u/s. 80P(2)(d) in respect of interest income received from co-operative banks.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal exparte for non prosecution placing on the decision of Hon'ble Supreme Court in the case of CIT vs. B.N. Bhattacharjee [1977] 118 ITR 461 (SC) and a few other orders.

Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal.

I heard the rival contentions of both the parties and perused the material available on record. I find that the learned CIT(A) dismissed the appeal in limine for non prosecution. 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 I am of the considered view that the matter requires to be remanded to the file of the CIT(A) with the direction to dispose of the appeal de novo on merits after affording reasonable opportunity of hearing to the assessee.