Loading judgment…
Facts
The assessee, a co-operative society, declared Nil income and was selected for scrutiny. The AO disallowed deduction on interest income, and the CIT(A) dismissed the assessee's appeal ex-parte due to a delay in proceedings. The assessee appealed to the ITAT, citing a delay of 379 days in filing the appeal, attributing it to the non-receipt of the CIT(A)'s order via email.
Held
The Tribunal condoned the delay of 399 days, acknowledging the affidavit filed by the assessee's Finance Head who is elderly and not tech-savvy, and suggesting the order might have gone to spam. The Tribunal noted that the CIT(A) dismissed the appeal without delving into its merits, which Section 250(6) of the Act mandates.
Key Issues
Whether the appeal filed by the assessee should be allowed to be admitted despite a significant delay, and whether the CIT(A) erred in dismissing the appeal ex-parte without considering the merits.
Sections Cited
Section 250(6) of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, BANGALORE “C” BENCH, BANGALORE
Alnavar Credit Souhardaha The Income Tax Officer Co-operative Ltd. Ward - 1(1), Hubli vs. 01, Indira Nagar, Alanvar 581103 PAN – AADAA0459P (Appellant) (Respondent) Assessee by: Shri Sandeep Chalapathy, CA Revenue by: Shri Ganesh R. Gale, Standing Counsel Date of hearing: 03.07.2024 Date of pronouncement: 04.07.2024 O R D E R Per: Prakash Chand Yadav, J.M. This appeal filed by the assessee challenges the DIN & order No. ITBA/NFAC/S/250/2002-23/1049609204(1) of the National Faceless Appeal Centre, Delhi (CIT(A)) dated 10.02.2023 passed under Section 250 of the Income Tax Act, 1961 (the Act) in respect of Assessment Year (AY) 2018-19.
The brief facts of the case are that the assessee, a co-operative society, filed its return of income on 01.10.2018 declaring Nil income. The case of the assessee was selected for scrutiny, during the course of assessment proceedings the ld Assessing Officer (AO) relying upon the judgement of the Hon'ble Supreme Court in the case of Totagars Co-Operative Sale Society v. ACIT [2023] 188 taxmann.com 282 (SC) disallowed the deduction in respect
Alnavar Credit Souhardaha Co-operative Ltd. of interest income earned by the assessee society. The AO taxed the interest income under the head income from other sources without providing any relief in respect of cost of funds.
Aggrieved with the order of the AO the assessee filed appeal before the ld. CIT(A). However, could not attend the appellate proceedings as a result of which the ld. CIT(A) dismissed the appeal of the assessee ex-parte.
Now the assessee has come up in appeal before us and argued that the ld. CIT(A) has erred in dismissing the appeal of the assessee without hearing the assessee. It is pertinent to note that there is a delay of around 379 days, in filing of the present appeal before ITAT. For condoning the delay, Ld. Counsel of the assessee argued that the order of the CIT(A) was not served on the assessee on the email ID which was mentioned in the prescribed Colum of Form 35. Therefore, the assessee was not able to file the appeal before the ITAT with in the period of limitation.
The learned D.R. vehemently argued that the delay cannot be condoned because there was no sufficient cause behind this delay.
After considering the rival submissions we observe that there is a delay of 379 days in filing the present appeal. In support of the application for condonation of delay the Finance Head of the assessee society has filed an affidavit( annexed with appeal memo). The Finance Head (FH) has stated that he is a 70 year old person and not very much conversant with the operations of computer/email ID. FH, has further clarified that the order of the CIT(A) could have been gone to the spam folder and hence he was unable to see the same in due course. We observe that the Ld CIT(A) has dismissed the appeal of the assessee without dealing with the merits of the case. Section 250(6) of the Act provides that the Ld CIT(A) is bound to decide an appeal on merits.
Alnavar Credit Souhardaha Co-operative Ltd. Considering the facts and circumstances of the case we hereby condoned the delay of 399 days for the reasons mentioned by the FH in the application for condonation of delay supported by duly sworn affidavit. It is settled position of law as held by Apex Court in the case of Collector of Land Acquisition Vs Katiji and others reported in 167 ITR 471(SC) wherein it is held that when technical consideration and substantial justice pitted against each other, cause of substantial justice would be given credence. Therefore, we restore the matter to the file of the ld. CIT(A) and direct him to decide the matter afresh in accordance with law after providing reasonable and meaningful opportunity to the assessee. We also direct the assessee to appear before the CIT(A) and file necessary details failure to do so, will be construed adversely against the assessee without any leniency.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 4th July, 2024.