Case Law Details
Malanadu Co-op. Agriculture and Rural Development Bank Ltd. Vs ITO (ITAT Cochin)
The case involves Malanadu Co-operative Agriculture and Rural Development Bank Ltd., a co-operative society registered under the Kerala Co-operative Societies Act, 1969. The bank filed its return of income for the assessment year 2020-21, claiming a deduction under Section 80P of the Income Tax Act, 1961. However, the Income Tax Officer (ITO) assessed the return and initiated penalty proceedings under Section 270A due to an alleged underreporting of income. The assessee applied for immunity from penalty but failed to file the prescribed Form 28 within the stipulated one-month period. Consequently, the AO rejected the immunity request and imposed a penalty of ₹13,92,924. The CIT(A) upheld the penalty without addressing the immunity claim, prompting the assessee to approach the Income Tax Appellate Tribunal (ITAT) Cochin.
Upon reviewing the appeal, ITAT Cochin noted that neither the AO nor the CIT(A) had properly examined the immunity application under Section 270A. As a result, the Tribunal ruled that the matter should be remanded to the AO for reconsideration. The Tribunal emphasized that all arguments raised by the assessee remain open for review by the AO, ensuring a fair opportunity to justify the immunity claim. With this directive, the ITAT partially allowed the appeal, instructing the AO to assess the application on its merits before making a final decision.
FULL TEXT OF THE ORDER OF ITAT COCHIN
This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 06.04.2024 for Assessment Year (AY) 2020-21.
2. Brief facts of the case are that the appellant is a co-operative society registered under the Kerala Co-Operative Societies Act, 1969. It is classified as a primary co-operative agricultural and rural development bank. The return of income for AY 2020-21 was filed on 14.02.2021 declaring Nil income after claiming deduction u/s. 80P of the Income Tax Act, 1961 (the Act). Against the said return of income, the assessment was completed by the Income Tax Officer, Ward – 1, Thodupuzha (hereafter “the AO”) vide order dated 22.09.2022 passed u/s. 143(3) of the Act. The AO also initiated penalty proceedings u/s. 274 r.w.s. 270A of the Act. The application moved by the appellant for grant of immunity from levy of penalty was denied for the failure of the assessee to file the prescribed application before the jurisdictional AO in Form 28 within one month from the end of the month in which the order was received. Therefore the AO proceeded with the levy of penalty u/s. 270A of the Act vide order dated 25.03.2023 by levying penalty of Rs. 13,92,924/-.
3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the penalty without dealing with the issue of immunity sought by the assessee.
4. Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal.
5. We have heard the rival contentions of both the parties and perused the material available on record. The appellant sought immunity from levy of penalty in terms of provisions of section 270A of the Act. Either the AO or the CIT(A), without dealing with the issue of immunity, had merely levied and confirmed the penalty. In the circumstances, we are of the considered opinion that the ends of justice would be met if the matter is restored to the file of the AO to consider the application for immunity filed by the assessee on merits. We make it clear that all the contentions that are raised before us by the assessee are kept open before the AO.
6. In the result, the appeal filed by the assessee stands partly allowed.
Order pronounced in the open court on 21st January, 2025
Author Bio
