KUTHANUR SERVICE CO-OPERATIVE BANK LIMITED,KUTHANUR, PALAKKAD vs. INCOME TAX OFFICER, WARD 1, PALAKKAD
Facts
The assessee, a co-operative society, filed a nil return for AY 2014-15 claiming deduction under Section 80P. The AO disallowed the deduction under Section 80P(2)(d) for interest income, and the CIT(A) subsequently dismissed the assessee's appeal ex parte for non-prosecution.
Held
The Income Tax Appellate Tribunal held that the CIT(A) is legally obliged to dispose of an appeal on its merits, even when dismissed ex parte. Consequently, the case was remanded to the CIT(A) for a de novo decision on merits after affording the assessee a reasonable opportunity of hearing.
Key Issues
Whether the CIT(A) can dismiss an appeal ex parte for non-prosecution without considering the merits of the case.
Sections Cited
80P, 80P(2)(d)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH
BEFORE SHRI INTURI RAMA RAO, AM ITA No. 974/Coch/2024 Assessment Year: 2014-15 Kuthanur Service Co-op. Bank Ltd. .......... Appellant Kuthanur, Palakkad 678621 [PAN: AAAAK1516G] vs. The Income Tax Officer .......... Respondent Ward - 1, Palakkad
Appellant by: Ms. Dhanya G., CA Respondent by: Smt. Leena Lal, Sr. D.R.
Date of Hearing: 05.02.2025 Date of Pronouncement: 21.02.2025
O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 30.09.2024 for Assessment Year (AY) 2014-15.
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
2 ITA No. 974/Coch/2024 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.
3 ITA No. 974/Coch/2024 Kuthanur Service Co-op. Bank Ltd. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes
Order pronounced in the open court on 21st February, 2025. 7.
Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 21st February, 2025 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File Assistant Registrar ITAT, Cochin
