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Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR
Before: SHRI RAVISH SOOD
आदेश / ORDER
PER RAVISH SOOD, JM
The captioned appeals filed by the aforementioned co-operative societies are directed against the respective orders passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, which in turn arises from the respective orders passed by the A.O under Sec. 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) for the respective assessment years. As common issues are involved in the aforementioned appeals, therefore, the same are being taken up and disposed off together by way of a consolidated order.
I shall take up the appeal in for the assessment year 2015-16 as the lead matter, and the order therein passed shall apply mutatis-mutandis to the remaining cases. The assessee has assailed the impugned order of the CIT(Appeals) on the following grounds of appeal :
3 Adim Jati Sewa Sahakari Samiti Maryadit a group of 5 cases “1. That under the facts and the law the Ld. CIT (Appeals), NFAC, Delhi erred in passing ex-parte order which is unjustified. The appellant is a primary agriculture cooperative society, operating in a remote area and in a small village named Dhorra in Tehsil and District Gariaband, Raipur (Chhattisgarh). Notices of fixation of appeal did not come to the knowledge of the appellant, the Order be set aside.
2. That under the facts and the law the Ld. CIT (Appeals), NFAC, Delhi further erred in passing ex-parte order without considering the merits of the case on facts and the law, rejecting deduction u/s.80P, though in other identical appeal in case of society at Tumgaon in DIN and Order No. ITBA/NFAC/8/250/2021- 22/1037733794(1) deduction u/s 80P has been allowed by the Ld. CIT (Appeals), NFAC, Delhi in Order dated 13.12.2021 relying on the judgement of Hon'ble Supreme Court in Mavilayi Services Coop. Bank Ltd. & Others Vs. CIT, Calicut dated 12.01.2021. Prayed that deduction u/s 80P is allowable and addition be deleted.
3. That under the facts and the law the Ld. CIT (Appeals), NFAC, Delhi further erred in confirming the rejection of claim of the appellant for deduction of income earned from Banking business at Rs.16,59,956/-comprising of Rs.2,28,851 and Rs. 14,31,105/-u/s 80P(2)(a)(i). Prayed that the above income is deductible u/s 80P(2)(a)(i).
4. Without prejudice to above, under the facts and the law the Ld. CIT (Appeals), NFAC, Delhi further erred in not deducting the interest on loan at Rs.18,77,193 and interest on Raksha Nidhi at Rs.19,854/- from the above income which be deducted which is spent to earn income. Prayed to deduct above sum. That under the facts and the law the Ld. CIT (Appeals), NFAC, Delhi further erred in confirming the Order of the Ld. Assessing Officer by not deducting other income at Rs.2,34,268/- and dividend at Rs. 35,904/-. Prayed that the above income is deductible u/s 80P.
6. That the Appellant craves leave to file additional ground, if any, at the time of hearing.”
4 Adim Jati Sewa Sahakari Samiti Maryadit a group of 5 cases
At the very outset of the hearing of the appeals, it transpires that the appeals in for A.Y.2015-16 and ITA No.115/RPR/2022 for A.Y.2015-16 are time barred by 23 days and 19 days respectively. The reasons enshrined in the respective applications reveals that the delay was caused because of circumstances which could neither be attributed to any deliberate conduct of the assessee appellant nor smack of a lackadaisical approach on his part. The Ld. Departmental Representative (for short ‘DR’) did not raise any objection to the seeking of condonation of delay by the respective assessee-appellants. After going through the respective applications I am satisfied with the reasons leading to the delay and condone the same after drawing support from the order of the Hon’ble Supreme Court of India in Suo Moto Writ Petition (Civil) No.3 of 2020 dated 23.03.2020, which had thereafter from time to time been modified by the Hon’ble Apex Court vide its order(s) dated 08.03.2021, 27.04.2021, 23.09.2021 and 10.01.2022.
Briefly stated, the assessee which is a primary agricultural co- operative society engaged in the business of banking, paddy procurement, sale of fertilizers, seeds, manures and pesticides as well as sale of controlled items under the Public Distribution System (PDS) had as on 29.03.2016 filed its return of income for the 5 Adim Jati Sewa Sahakari Samiti Maryadit a group of 5 cases assessment year 2015-16, declaring a total income of Rs. Nil. Subsequently, the case of the assessee was selected for scrutiny assessment u/s.143(2) of the Act. Assessment was, thereafter, framed by the Assessing Officer vide his order passed u/s.143(3) of the Act, dated 30.11.2017 wherein assessee’s muti-facet claim for deduction under Sec. 80P was disallowed as under:
Sr. Particulars Amount (Rs.) No. 1. Addition on account of Rs.16,59,956/- income earned from banking business u/s.80P(2)(a)(i) of the Act. 2. Disallowance of the Rs.76,126/- assessee’s claim for deduction of profit from paddy procurement business 3. Disallowance of assessee’s Rs.2,70,172/- claim for deduction of other income i.e. entry fee and miscellaneous income u/s 80P.
Thereafter, the A.O vide his order u/s. 143(3) of the Act, dated 30.11.2017 assessed the total income of the assessee society at Rs.17,40,316/-.
Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). The CIT(Appeals) observing that the assessee despite
6 Adim Jati Sewa Sahakari Samiti Maryadit a group of 5 cases having been put to notice had neither participated in the appellate proceedings nor placed on record any written submissions, thus, dismissed the appeal for non-prosecution on the part of the assessee.
The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal. As observed hereinabove, the CIT(Appeals) had disposed off the appeal for non-prosecution and had failed to apply his mind to the respective issues which did arise from the impugned order and were assailed by the assessee before him. I am unable to persuade myself to accept the manner in which the appeal of the assessee had been disposed off by the CIT(Appeals). In my considered view, once an appeal is preferred before the CIT(Appeals), it becomes obligatory on his part to dispose off the same on merit and it is not open for him to summarily dismiss the appeal on account of non-prosecution of the same by the assessee. In fact, a perusal of Sec.251(1)(a) and (b), as well as the “Explanation” to Sec.251(2) of the Act reveals that the CIT(A) remains under a statutory obligation to apply his mind to all the issues which arises from the impugned order before him. As per mandate of law the CIT(Appeals) is not vested with any power to summarily dismiss the appeal for non-prosecution. The aforesaid view is fortified by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs.
7 Adim Jati Sewa Sahakari Samiti Maryadit a group of 5 cases Premkumar Arjundas (HUF) (2017) 297 CTR 614 (Bom). In the aforementioned case the Hon’ble jurisdictional High Court had observed as under:
"8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the AO to make further inquiry and report the result of the same to him as found in Sec. 250 of the Act. Further, Sec. 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Sec. 251(1)(a) and (h) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-s. (2) of s. 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under s. 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact w.e.f. 1st June, 2001 the power of the CIT(A) to set aside the order of the AO and restore it to the AO for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) are co-terminus with that of the AO i.e. he can do all that A.O could do. Therefore, just as it is not open to the AO to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the s. 251(1)(a) and (b) and Explanation to Sec. 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non- prosecution as is evident from the provisions of the Act.”
8 Adim Jati Sewa Sahakari Samiti Maryadit a group of 5 cases
I, thus, not being persuaded to subscribe to the dismissal of the appeal by the CIT(Appeals) for non-prosecution, therefore, set-aside his order with a direction to dispose off the same on merits. Needless to say, the CIT(Appeals) shall afford a reasonable opportunity of being heard to the assessee in the course of the de novo appellate proceedings. The grounds of appeal raised by the assessee are disposed off in terms of the aforesaid observations.
Ostensibly, as the issues involved in the present appeal prima- facie appears to be covered by the order passed by the ITAT, Raipur Bench, Raipur in & Ors. Dated 23.02.2022 in the case of Gramin Sewa Sahakari Samiti Maryadit & Ors Vs. ITO, Ward-1(3), Raipur, therefore, the CIT(Appeals) is directed to consider the same in the course of the set-aside proceedings.
In the result, the appeal filed by the assessee in for A.Y.2015-16 is allowed for statistical purposes in terms of the aforesaid observations.
ITA No.(s) 21/RPR/2022, 23/RPR/2022, 26/RPR/2022 & 115/RPR/2022 A.Ys. 2012-13, 2016-17, 2015-16
As the facts and issues involved in the captioned appeals remains the same as were there before me in the appeal of Adim Jati
9 Adim Jati Sewa Sahakari Samiti Maryadit a group of 5 cases Sewa Sahakari Samiti Maryadit in for assessment year 2015-16, therefore, the order therein passed while disposing off the said appeal shall apply mutatis-mutandis for disposing off the captioned appeals, i.e., ITA No.(s) 21/RPR/2022, 23/RPR/2022, 26/RPR/2022 & 115/RPR/2022 for A.Ys. 2012-13, 2016-17, 2015-16. In these cases also, I set aside the order of the CIT(Appeals) and restore the matter to his file for de-novo proceedings with similar terms and observations as were recorded while deciding the appeal in ITA No.20/RPR/2022 for A.Y. 2015-16.
In the combined result, all the captioned appeals of the aforementioned assessee’s are allowed for statistical purposes in terms of the aforesaid observations.
Order pronounced in open court on 10th day of November, 2022.