Case Law Details
SIB Staff Credit Society Ltd Vs ITO (ITAT Cochin)
In the case of SIB Staff Credit Society Ltd vs. ITO (ITAT Cochin), the appellant, a cooperative society registered under the Kerala State Co-operative Societies Act, challenged the Income Tax Officer’s (ITO) decision denying its claim for a deduction under Section 80P of the Income Tax Act for the Assessment Year (AY) 2020-21. The appellant filed its return of income on December 9, 2020, declaring a nil income after claiming a deduction of ₹61,13,148 under Section 80P. However, the ITO completed the assessment under Section 143(3) and Section 144B, rejecting the claim and determining an income of ₹61,13,148. This decision was based on the appellant’s failure to substantiate the deduction claim.
Dissatisfied with this assessment, the appellant filed an appeal with the CIT(A), but the appeal was dismissed due to non-prosecution. The appellant then filed an appeal before the Income Tax Appellate Tribunal (ITAT). When the appeal was called for hearing, no representative appeared for the appellant, even though proper notice had been issued. The ITAT, after hearing the Senior Departmental Representative (DR), noted that the CIT(A) had failed to dispose of the appeal on its merits, which is a requirement under Section 250(6) of the Income Tax Act. The ITAT emphasized that the CIT(A) is bound to pass a detailed, merit-based order. As a result, the ITAT remanded the case back to the CIT(A) with instructions to reconsider the appeal on its merits, providing the appellant a reasonable opportunity to present their case. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT COCHIN
This appeal filed by the assesses is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)], dated 29.07.2024 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 State Co-operative Societies Act, 1969. It is formed for the purpose of accepting deposits from members and lending money to the The return of income for AY 2020-21 was filed on 09.12.2020 declaring nil income after claiming deduction u/s. 80P of the Income Tax Act, 1961 (the Act) of Rest. 61,13,148/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-2(1), Thrissur (hereinafter called “the AO”) vide order dated 27.09.2022 passed u/s. 143(3) row’s. 144B of the Income Tax Act, 1961 (the Act) at a total income of PRs. 61,13,148/- denying exemption u/s. 80P of the Act for the failure of the appellant to substantiate the claim for deduction u/s. 80P of the Act.
3. Being aggrieved, an appeal was filed before the CIT(A) contending that the appellant is eligible for deduction u/s. 80P(2)(a)(i) of the Act. However, the CIT(A) dismissed the appeal expert for non-prosecution.
4. Being aggrieved, the assesses is in appeal before the Tribunal in the present appeal. When the appeal was called nobody appeared on behalf of the assesses despite due service of notice of hearing. Therefore, we proceeded to dispose of the appeal after hearing the learned Sr. DR.
5. We find that the learned CIT(A) dismissed the appeal intimin 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 expert, 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. Ramkumar Arjuna’s Luthra 279 CTR 614. Therefore, in the light of the above legal position we are 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 assesses.
6. In the result, the appeal filed by the assesses is allowed for statistical purposes
Order pronounced in the open court on 19th February, 2025.
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