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Facts
The assessee, a cooperative credit society, filed a nil return for A.Y. 2017-18 after claiming a deduction under Section 80P. A fresh assessment under Section 263 led to additions under Section 68 for cash deposits during demonetization and disallowance of NPA provisions. The CIT(A) dismissed the assessee's appeal due to non-compliance, thereby confirming the AO's order, leading the assessee to appeal to the ITAT.
Held
The ITAT acknowledged the assessee's grounds of appeal and claim of having material evidence, noting that the CIT(A) dismissed the appeal for non-compliance without fully considering the merits. Upholding principles of natural justice, the ITAT set aside the CIT(A)'s order and remitted the disputed issues back to the CIT(A) for fresh adjudication, providing the assessee another opportunity to present its case.
Key Issues
Addition of cash deposits under Section 68; denial of Section 80P deduction; disallowance of NPA provision; dismissal of appeal by CIT(A) due to non-compliance.
Sections Cited
143(3), 263, 250, 68, 80P, 142(1), 144B, ITAT Rules 1963, rule 34(5)
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Income Tax Appellate Tribunal, “SMC” BENCH PANAJI
ORDER
PER PAVAN KUMAR GADALE, JM:
The appeal is filed by the assesse against the order of NFAC/CIT(A) passed u/sec 143(3) r.w.s 263 and u/sec 250 of the Act. The assessee has raised the grounds of appeal
challenging the ex parte order of the CIT(A) sustaining (i) the addition u/se 68 of the Act (ii) denial of deduction u/sec80P of the Act and (iii)disallowance of NPA provision.
2. The brief facts of the case are that, the assessee is a cooperative credit society engaged in providing credit facilities to its member s. The assesse has filed the return of income for the A.Y 2017-18 disclosing a total income of The Bramhaling Multipurpose Co-Op Society Limited. Rs. Nil after claiming deduction u/sec 80P of the Act of Rs.3,36,837/-. Subsequently the case was selected for scrutiny under CASS and notice u/sec143 (2) and u/sec 142(1) of the Act are issued calling for details in respect of claims and the information supporting the return of income filed and the assessment was completed u/sec 143(3) of the Act disallowing the claim u/sec80P of the Act vide order dated19.11.2019. Subsequently the order u/sec 143(3) of the Act was set aside u/sec263 of the Act vide order dated 30.03.2022 to make fresh assessment after examining the cash deposits during the demonetization period and NPA provision . The A.O as per the directions in the revision order u/sec263 of the Act has issued notice to the assesse to explain the sources of cash deposits and there was partial compliance. Whereas the A.O was not satisfied with the explanations as the assessee has accepted the SCN notes and dealt on the provisions and has made addition u/sec68 of the Act of Rs.44,01,000/- and similarly disallowed the NPA provision of Rs.70,000/- and finally assessed the total income of Rs.48,06,837/- and passed the order U/sec143(3) r.w.s263 r.w,s144B of the Act dated 21.03.2023.
Aggrieved by the order, the assesse has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and has issued notices of hearing and since there was no compliance by the assessee to notices. Therefore the The Bramhaling Multipurpose Co-Op Society Limited. CIT(A) considering the information on record has confirmed the action of the A.O and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal.
4. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer overlooking the information of the assessment proceedings. Further the assesse has a good case on merits and shall substantiate with the material evidences and prayed for an opportunity to explain before the lower authorities. Per Contra, the Ld.DR supported the order of the CIT(A).
Heard the rival submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the fact that there is no proper compliance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT(A) was of the opinion that the assesse is not interested in prosecuting the appeal and dismissed the appeal confirming the action of the assessing officer. The CIT(A) has issued the notices of hearing on various dates referred at Page 4 Para3 but there was no response and thus the Ld.CIT(A) decided the appeal based on the information available on record. Whereas the assessee has raised grounds of appeal challenging the additions made by the A.O and there could be various reasons for no proper compliance which cannot be overruled. Further the Ld.AR mentioned that the The Bramhaling Multipurpose Co-Op Society Limited. assesse has a good case on merits and shall substantiate with the material evidences and prayed for an opportunity to explain before the lower authorities.Therefore, considering the facts, submissions and principles of natural justice, shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh and the assesse should be provided adequate opportunity of hearing and shall cooperate in submitting the information. And the grounds of appeal
of the assessee are allowed for statistical purposes.