Case Law Details
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.
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 11.06.2024 for Assessment Year (AY) 2017-18.
2. Brief facts of the case are that the appellant is a co-operative society. The appellant failed to furnish the return of income for AY 2017-18 either u/s. 139 and also in response to notice u/s. 142(1) of the Income Tax Act, 1961 (the Act). On the basis of the information gathered during the phase of online verification under ‘Operation Clean Money’, the Income Tax Officer, Ward 2(1), Thrissur (hereinafter called “the AO”) found that the appellant has deposited Rs. 10,73,200/- with Thrissur District Central Co-op. Bank durng the demonetisation period. Hence, the AO completed the assessment vide order dated 30.12.2019 passed u/s. 144 of the Act at a total income of Rs. 10.73,200/-. While doing so, the AO made addition u/s. 69A of the Act of Rs. 10,73,200/-.
3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal exparte for non prosecution placing on the decision of the Hon’ble Bombay High Court in the case of M/s. Chemipol vs. Union of India in Excise Appeal No. 62 of 2009 and a few other orders.
4. Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal.
5. I heard the rival contentions of both the parties and perused the material available on record. I find that the learned CIT(A) dismissed the appeal in limine for non prosecution. As contemplated u/s. 250(6) of the Act the CIT(A) is required to frame points of determination followed by a detailed discussion thereupon before passing the order. It is the settled position of law that the CIT(A), even while disposing of the appeal exparte, is duty bound to dispose of the appeal on merits. Reliance in this regard can be placed on the decision of the Hon’ble Bombay High Court in the case of PCIT vs. Premkumar Arjundas Luthra 279 CTR 614. Therefore, in the light of the above legal position I am of the considered view that the matter requires to be remanded to the file of the CIT(A) with the direction to dispose of the appeal de novo on merits after affording reasonable opportunity of hearing to the assessee.
6. In the result, the appeal filed by the assessee is allowed for statistical purposes
Order pronounced in the open court on 21st January, 2025.
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