M/S SRI GANAPATHI URBAN CO-OPERATIVE BANK LIMITED,SHIVAMOGGA vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1, SHIMOGA

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ITA 3303/BANG/2018Status: DisposedITAT Bangalore18 January 2019AY 2014-153 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that although the assessee failed to appear on multiple occasions, the CIT(A) should have decided the appeal on merits. Therefore, the matter was restored to the CIT(A) for a fresh decision.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed without adjudication on merits. The assessee contended that the CIT(A) failed to decide the case on merits despite multiple hearing dates, and that the CIT(A)'s order was ex-parte.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal without adjudicating on merits, and whether the deduction under Section 36(1)(viia) was wrongly denied.

Which sections of the Income-tax Act were involved?

Section 36(1)(viia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC-B” BENCH : BANGALORE

Before: SHRI ARUN KUMAR GARODIA

For Appellant: Shri R.E. Balasubramanyam, CA
For Respondent: Shri A. Ramesh Kumar, JCIT (DR)
Hearing: 14.01.2019Pronounced: 18.01.2019

O R D E R

Per Shri A.K. Garodia, Accountant Member

1.

This appeal is filed by the assessee which is directed against the order of ld. CIT (A), Davangere dated 27.09.2018 for Assessment Year 2014-15.

2.

The grounds raised by the assessee are as under. “The Appellant objects to the order of the Ld.CIT (A) on the grounds:

Tax Effect in Grounds Raised

INR

1. That the impugned order is opposed to facts General and law in so far as it is pre-judicial to the Ground interests of the Appellant.

2. That the Ld. CIT(A) erred in dismissing the appeal without adjudicating the case on merits and in doing so, the Ld.CIT(A) failed to General appreciate that in the Assessee's own case on Ground a similar issue the Honorable ITAT Bangalore had already passed orders for earlier years allowing relief.

3.

Without prejudice to ground No 2 the appellant further submits that a) That the Ld.CIT (A) erred in denying the deduction under section 36(1) (viia) of the Income Tax Act in respect of provision for bad debts created in connection with a rural branch and in doing so the Ld.CIT (A) failed to 13.16 Lakhs appreciate the fact that the Act uses the words "situated in a place" to define a rural branch and not the reach of the business of that branch. b) That the Ld. CIT(A) has erred in confirming the disallowance of pigmy commission for non-deduction of TDS and in doing so the Ld.CIT(A) failed to appreciate that the Appellant was not required to deduct tax on such 1.81 commission in terms of the letter issued Lakhs by the Ministry of Finance pursuant to the judgment of the Honorable Supreme Court.

The appellant prays for leave to add, delete, modify and/or adduce additional ground at any time before the appeal is disposed off. For these and such other grounds that may be adduced or removed in time to time, it is requested that the Hon'ble ITAT may be pleased to examine the case in the light of justice and grant the relief sought for.”

3. At the very outset, it was submitted by ld. AR of assessee that the order of CIT (A) is ex-parte qua the assessee and hence, the matter may be restored back to the file of CIT (A) for fresh decision after providing reasonable opportunity of being heard to the assessee. At this juncture, it was a query raised by the bench that how many opportunities were provided by CIT (A). In reply, the ld. AR of assessee drawn my attention to Para no. 3 of the order of CIT(A) and pointed out that the appeal was fixed for hearing on 3 dates i.e. 07.03.2018, 07.08.2018 and 18.09.2018 and although assessee could not appear before CIT(A) but even in the absence of assessee, CIT(A) should have decided the appeal on merit and since this was not done by CIT(A), the matter may be restored back to the file of Page 3 of 3 CIT(A) for fresh decision in the interest of justice. The ld. DR of revenue supported the order of CIT(A).

4.

I have considered the rival submissions. I find that this is true that the appeal was fixed by CIT (A) for hearing on 3 occasions and there was no compliance by the assessee on any of these dates but still, the ld. CIT (A) should have decided the issue on merit. But he simply dismissed the appeal on this basis that the assessee is not interested in prosecuting the appeal. Under these facts, I am of the considered opinion that the matter should go back to the file of CIT(A) for fresh decision on merit after providing adequate opportunity of being heard to both sides. I order accordingly. In view of this decision, no adjudication is called for regarding the merit of the case at the present stage.

5.

In the result, the appeal filed by the assessee stands allowed for statistical purposes. Order pronounced in the open court on the date mentioned on the caption page.

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