THE MARADY SERVICE CO-OP BANK LIMITED ,KOCHI vs. ITO WARD 1, THODUPUZHA

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ITA 931/COCH/2022Status: HeardITAT Cochin30 April 2024AY 2011-12Bench: SHRI SANJAY ARORA (Accountant Member), MS. KAVITHA RAJAGOPAL (Judicial Member)4 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee was not given a proper opportunity to present its case before the CIT(A) and that the appeal was dismissed without deciding on merits. Therefore, the case was remanded back to the CIT(A) for a fresh decision.

What were the facts?

The assessee, a Co-operative Bank, failed to file its return of income. Upon reopening, it declared Nil income after claiming a deduction under Section 80P. The Assessing Officer disallowed this deduction, treating the assessee as a cooperative bank and not a primary agricultural credit cooperative society.

What were the issues?

Whether the assessee was denied natural justice by the CIT(A) and whether the disallowance of deduction under Section 80P was justified on merits.

Which sections of the Income-tax Act were involved?

Section 80P,Section 148,Section 142(1),Section 143(2),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: SHRI SANJAY ARORA, AM & MS. KAVITHA RAJAGOPAL, JM

For Respondent: Smt. J M. Jamuna Devi
Hearing: 14.03.2024Pronounced: 30.04.2024

BEFORE SHRI SANJAY ARORA, AM AND MS. KAVITHA RAJAGOPAL, JM (Assessment Year: 2011-12) And Stay Application No. 68/Coch/2022 (Arising out of (Assessment Year: 2011-12) The Marady Service Co-op. Bank ITO Ward 1, Limited Temple Bypass Road, Thodupuzha, No. E-57, South Marady PO, Kerala-676 10 Vs. Muattupuzha, Ernakulam, Kerala-686 673 PAN/GIR No. AACAT 5248 C (Assessee) (Respondent) : Assessee by : None Respondent by : Smt. J M. Jamuna Devi Date of Hearing : 14.03.2024 Date of Pronouncement : 30.04.2024 O R D E R Per Kavitha Rajagopal, J M:

This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), relevant to the Assessment Year (‘A.Y.’ for short)

2011-12.

2.

The assessee has also filed the Stay Application in this matter seeking for stay of recovery of demand raised by the Revenue.

3.

The assessee has challenged this appeal on the ground of violation of principles of natural justice and on the disallowances of deduction u/s. 80P of the Act. The assessee has also challenged the reopening of the assessment notice u/s. 148 of the Act.

SA No. 68/Coch/2022 The Marady Service Co-op. Bank Limited 4. The brief facts are that the assessee is a Co-operative Bank registered under the Kerala Co-operative Societies Act, 1969. The assessee had not filed its return of income for the year under consideration and the assessee’s case was reopened by the ld. Assessing Officer ('A.O.' for short) on the reason to believe that the income chargeable to tax has escaped assessment. The ld. A.O. issued notice u/s. 148 of the Act which was duly served upon the assessee. The assessee filed its return of income in response to the said notice, declaring total income at Rs.Nil after claiming deduction u/s. 80P of the Act amounting to Rs.40,77,175/-. The ld. AO issued notice u/s. 142(1) and 143(2) of the Act which were duly served upon the assessee. The ld. A.O. then passed the assessment order, determining total income at Rs.40,77,175/- by making addition/disallowance u/s. 80P of the Act. The ld. A.O. made the impugned addition on the ground that the assessee is a cooperative bank and not a primary agricultural credit cooperative society.

5.

Aggrieved the assessee was in appeal before the first appellate authority who vide order dated 14.09.2022 dismissed the appeal filed by the assessee on the ground that the assessee has not been compliant before the ld. CIT(A), inspite of several opportunities granted.

6.

The assessee is an appeal before us, challenging the impugned order of the ld. CIT(A).

7.

We have heard the learned Departmental Representative ('ld.DR' for short) and perused the materials available on record. It is observed that the assessee has not been compliant before the first appellate authority on several occasions where the ld. CIT(A) has also granted a final opportunity of hearing for the purpose of furnishing the SA No. 68/Coch/2022 The Marady Service Co-op. Bank Limited submission on or before 25.08.2022. In spite of this, the assessee has failed to respond to the final show cause notice, wherein the ld. CIT(A) proceeded to dismiss the appeal filed by the assessee. The assessee prayed that it may be given one more opportunity to present its case before the ld. CIT(A). The ld. DR, on the other hand, vehemently opposed to remanding this issue back to the file of the ld. CIT(A).

8.

In the above factual matrix, we are of the considered opinion that owing to the principles of natural justice as well as the fact that the first appellate authority has not decided the issue on the merits of the case, the assessee may be given one more opportunity to present its case before the first appellate authority with the direction to co- operate without any undue delay. The ld. CIT(A) is directed to decide this issue on the merits of the case upon consideration of the submission of both sides. We, therefore, remand all these issues back to the file of the ld. CIT(A).

9.

The assessee has also filed a Stay Application in this matter which stands dismissed as infructuous.

10.

In the result, the appeal file by the assessee is allowed for statistical purpose and the stay application is dismissed as infructuous.

Order pronounced on 30.04.2024 under rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963.

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