Thrissur House Construction Co-op Society Ltd. Vs ITO (ITAT Cochin)
Income Tax Appellate Tribunal (ITAT) Cochin has remanded the appeal of Thrissur House Construction Co-operative Society Ltd. for fresh consideration by the Commissioner of Income Tax (Appeals) [CIT(A)]. The case arose after the society failed to file its income tax return for the Assessment Year 2017-18, leading to an assessment under Section 144 of the Income Tax Act, 1961. The Income Tax Officer (ITO), based on information from ‘Operation Clean Money,’ found that the society had deposited ₹10,73,200 during the demonetization period in the Thrissur District Central Co-operative Bank. Consequently, the ITO added the entire amount to the total income under Section 69A, treating it as unexplained money. The assessee challenged the assessment before CIT(A), but the appeal was dismissed ex-parte due to non-prosecution. The CIT(A) relied on a Bombay High Court judgment in the case of M/s. Chemipol vs. Union of India.
Upon further appeal, ITAT Cochin ruled that CIT(A) had erred by dismissing the case without evaluating it on merits, as required under Section 250(6) of the Act. The tribunal noted that even in ex-parte cases, the appellate authority must determine key issues and provide a reasoned order. Referring to the Bombay High Court’s decision in PCIT vs. Premkumar Arjundas Luthra, ITAT emphasized that appeals must be adjudicated with proper legal scrutiny. Consequently, ITAT set aside CIT(A)’s order and remanded the matter for a fresh hearing, directing the appellate authority to examine the case on its merits and provide the assessee with a fair opportunity to present its case. The appeal was allowed for statistical purposes, with the order pronounced in open court on January 21, 2025.
