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Facts
The assessee filed a return of income declaring a total loss. The Assessing Officer made several additions and disallowances, leading to a revised assessed income. The assessee appealed to the CIT(A) but failed to comply with notices due to the negligence of their counsel, resulting in an ex parte order.
Held
The Tribunal noted that the CIT(A) passed an ex parte order without examining the merits. Considering principles of natural justice and the assessee being a rural bank, the Tribunal decided to provide one final opportunity.
Key Issues
Whether the CIT(A) was justified in passing an ex parte order without examining the merits of the case, and if the assessee should be granted another opportunity to present its case.
Sections Cited
143(2), 142(1), 36(1)(va), Chapter XVII-B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “PATNA BENCH, PATNA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Assessment Year: 2016-17 Uttar Bihar Gramin Bank……….....…..…………………....Appellant Sharma Complex, Ramna Kalambagh Chowk, Muzaffarpur, Bihar – 842002. [PAN: AAAJU0238J] vs. DC/AC, Circle-2, Muzaffarpur.……….…............................…..…..... Respondent Appearances by: Shri Sanjeev Kr. Anwar, Advocate, appeared on behalf of the appellant. Shri Rajat Datta, DR, appeared on behalf of the Respondent. Date of concluding the hearing : July 22, 2025 Date of pronouncing the order : July 23, 2025 आदेश / ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal has been filed by the assessee against the order passed by the learned Commissioner of Income Tax (Appeals), Patna ["CIT(A)"] for the Assessment Year 2016-17.
Brief facts of the case are that the assessee filed its return of income declaring a total loss of Rs.47,24,77,982. The case was selected for scrutiny under compulsory manual selection criteria during the financial year 2017-18. Accordingly, statutory notices under sections 143(2) and 142(1) of the Income-tax Act, 1961 ("the Act") were issued and duly served upon the assessee. In response, the assessee appeared and made certain submissions. However, the Assessing Officer made the following additions/disallowances: Rs.16,84,20,016: Provision for NPA.
Uttar Bihar Gramin Bank Rs.88,98,50,506: Disallowed under Chapter XVII-B for non-deduction of TDS. Rs.84,57,75,179: Disallowed claim of interest. Rs.5,08,291: Disallowed expenditure under the head "Food & Beverages" to staff. Rs.28,17,546: Disallowed contribution towards Provident Fund under section 36(1)(va) as not deposited before the due date. After the above disallowances, the total income of the assessee was assessed at Rs.1,43,94,65,556.
Aggrieved, the assessee preferred an appeal before the ld. CIT(A). However, during the long pendency of the appeal almost five years the assessee failed to comply with the notices issued on various occasions. Ultimately, the ld. CIT(A) passed an ex parte order, upholding the additions made by the Assessing Officer.
The assessee is now in appeal before the Tribunal. The learned AR submitted that the assessee is a Gramin Bank located in Bihar and due to the inaction and negligence of the earlier counsel representing the case, the assessee was unable to appear before the ld. CIT(A). He further contended that the assessee has a fair chance of success on merits if given an opportunity to substantiate the claims and compliance before the ld. CIT(A).
On the other hand, the learned DR submitted that sufficient opportunities were already granted to the assessee and the CIT(A) was constrained to pass an ex parte order due to the non-compliance.
We have heard both parties and perused the records. It is undisputed that the ld. CIT(A) has passed an ex parte order without examining the merits of the case. Considering the interest of natural justice and the fact that the assessee is a rural bank with a large 2 Uttar Bihar Gramin Bank volume of data and technical disallowances, we are inclined to provide the assessee with one final opportunity. Accordingly, we set aside the impugned order of the ld. CIT(A) and restore the matter to his file with a direction to adjudicate the appeal afresh, after providing reasonable opportunity of being heard to the assessee. The assessee is also directed to extend full cooperation and to comply with the notices issued by the CIT(A) without fail.
In the result, the appeal of the assessee is allowed for statistical purposes. Kolkata, the 23rd July, 2025.