MANGANGA SAHAKARI PATSANSTHA LIMITED,MUMBAI vs. INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE

The learned Authorised Representative reiterated the same facts and stated that the balance demand may be stayed.

The learned Departmental Representative vehemently objected to the same.

In view of the above facts, we proceed to disposed off the appeal itself instead of stay petition.

The brief facts clearly show that assessee is an association of person carrying on the activities of credit co-operative society. It collects deposits from its members and also extend loan to the members. Assessee filed its return of income for A.Y. 2018-19, on 12th October, 2018, declaring a total income of ₹6,68,460/-. The return of income was selected for limited scrutiny by issue of notice under Section 143(2) of the Act dated 28th September, 2019, for verification of deduction under Chapter VI A and investments advances and loans. The learned Assessing Officer issued notices to the assessee under Section 142(1) of the Act on 2nd March, 2020, which was replied on 10th March, 2020, however, the learned Assessing Officer found it to be incomplete. Thereafter the learned Assessing Officer issued further notices to which assessee failed to reply and therefore, the learned Assessing Officer completed the assessment on the information available on record. He found that the total investment of the assessee on 31st March, 2017, was 13.3 crores and as on 31st March, 2018, it is 13.80 crores therefore, he

The assessee preferred an appeal before the learned CIT (A) claiming that no opportunity was given to the assessee for hearing and therefore, the order is bad in law. Further assessee challenged that with respect to the addition of unexplained investment there is a new addition of ₹12,287/- new members and assessee has received 47 crores of as new deposits and therefore, the addition of ₹76,35,816/- is made out of that sum. It was further stated that during the deduction under Section 80P of the Act, assessee submitted on 10th March, 2020, that assessee is eligible to the above deduction, which was disallowed without considering the facts of the case reply for it.

The learned CIT (A) issued notices to the assessee admittedly, which was not attended to and therefore, he submitted that the assessee is not interested in pursuing the appeal and therefore, it is liable to be dismissed. He further held that there is no merit in the ground of the assessee about the violation of the principles of natural justice and therefore, ground no.1, 2 and 3 were dismissed. This order was passed in absence of any further material produced by the assessee.

Assessee is aggrieved with that and is in appeal.

We have heard the rival contentions. We find that the learned Assessing Officer issued notices to the assessee for the period of 18th August, 2020

When the matter reached before the learned CIT (A), undisputedly the assessee did not furnish or response to any of the notices. Be that it may be, however the assessee has stated that there is a failure to give appropriate opportunity of hearing to the assessee and further the additions of unexplained investment is uncalled for in view of the sources of fund of ₹46.61 from 12,827 new members. Further deduction claimed under Section 80P of the Act was explained by response dated 10th March, 2020. The learned CIT (A) disposed off the matter holding that first ground that assessee is not interested in pursuing its appeal. We find that the learned CIT (A) according to provisions of Section 251 of the Act is duty bound to dispose off all the appeal on merits. On the second issue, it was held that neither there is a violation of principles of natural justice in giving an opportunity of hearing to the assessee and nothing is stated on the merits therefore, he confirms the order of the learned Assessing Officer. We failed to understand that if the learned CIT (A) is deciding the appeal on the merits of the case, how can he ignore the fact that notices for hearing were given during the Covid Period and further in the statement of facts itself the assessee has mentioned that it has collected deposit of ₹46.61 crores which is the source on investment made and further reply dated 10th March, 2020, with respect to the deduction under Section 80P could have been ignored. There is no mentioned of this fact while deciding appeal

As the order of the learned Assessing Officer as well as learned CIT (A) are passed without adequate opportunity of hearing, we are not inclined to sustain both these orders. The opportunity of hearing is mandatory

In view of the above facts, the appeal of the assessee is allowed for statistical purposes and stay petition preferred by the assessee is dismissed as infractuous.