Karnataka Sheep And Wool Development Corporation Limited Vs ITO (ITAT Bangalore)
Summary: The appeal filed by Karnataka Sheep and Wool Development Corporation Limited, a Government company, against the order of the CIT(A), NFAC for assessment year 2017-2018 was dismissed by the CIT(A) solely on account of a 151-day delay in filing the appeal, after the application for condonation of delay was rejected, and consequently the issues arising from the assessment order passed by the Assessing Officer under section 147 read with sections 144 and 144B of the Income-tax Act had not been examined on merits. The Tribunal also noted that the assessment proceedings before the Assessing Officer had been completed ex parte and that the assessee, a Government company, undertook to prosecute the appeal diligently and ensure due compliance. The Departmental Representative stated that there was no objection to restoration of the matter to the Assessing Officer. Considering the totality of the facts and circumstances, particularly the ex parte assessment and absence of adjudication on merits, the ITAT held that substantial justice, fair play and natural justice warranted one further effective opportunity. Without expressing any opinion on the merits of the additions or disallowances, the Tribunal set aside the impugned order and restored the matter to the Assessing Officer for fresh adjudication in accordance with law, directing the Assessing Officer to provide reasonable and adequate opportunity of hearing and consider the evidence and submissions furnished by the assessee, while directing the assessee to cooperate, furnish necessary details and evidence within the stipulated time and avoid unnecessary adjournments. The appeal was accordingly allowed for statistical purposes.
The appeal filed by Karnataka Sheep and Wool Development Corporation Limited, a Government company, was dismissed by the CIT(A) solely because of a 151-day delay in filing the appeal. The CIT(A) rejected the condonation petition and consequently did not examine the additions and disallowances arising from the reassessment order passed under Section 147 read with Sections 144 and 144B.
The Bangalore ITAT also noted that the original assessment had been completed ex parte, and therefore the assessee had not received an effective opportunity to present its evidence and submissions at either stage. Before the Tribunal, the assessee undertook to prosecute the proceedings diligently and ensure proper compliance. The Department also raised no objection to restoration of the matter.
The Tribunal held that the purpose of assessment and appellate proceedings is to determine the correct taxable income in accordance with law, and not to defeat a claim merely because of procedural lapses. Since neither the assessment nor the appeal had received proper adjudication on merits, the requirements of substantial justice, fair play and natural justice warranted one further effective opportunity.
Accordingly, without expressing any opinion on the merits of the additions or disallowances, the ITAT set aside the impugned order and restored the entire matter to the AO for fresh adjudication. The AO was directed to provide a reasonable and adequate opportunity of hearing and consider the evidence and submissions furnished by the assessee. The assessee was also directed to cooperate, submit the necessary details within the stipulated time and avoid unnecessary adjournments.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This appeal is filed by the Assessee against the order of Ld. CIT(A), NFAC vide DIN: ITBA/NFAC/S/250/2025-26/1083293147(1) dated 16-Feb-2026 for the Assessment Year 2017-2018.
2. We have heard the rival submissions of both the parties and perused the materials available on record. The appeal of the assessee before the learned CIT(A) came to be dismissed merely on the ground that there was a delay of 151 days in filing the appeal and the application for condonation of delay was rejected. Consequently, the issues arising from the assessment order passed by the Assessing Officer under section 147 read with sections 144 and 144B of the Income- tax Act have not been examined on merits by the learned CIT(A).
2.1 It is also noticed that the assessment proceedings before the Assessing Officer were completed ex parte. The learned Authorised Representative has submitted that the assessee is a Government company, and has undertaken the responsibility for prosecuting the appeal diligently and for ensuring due compliance in the proceedings before the appellate authorities.
3. The learned Departmental Representative, on being asked, has stated that he has no objection if the matter is restored to the file of the Assessing Officer for adjudication afresh in accordance with law.
4. Considering the totality of the facts and circumstances of the case, and particularly the fact that the assessment was completed ex parte and the appeal has not been adjudicated on merits, we are of the considered view that substantial justice would be served by providing one more effective opportunity to the assessee to present its case before the Assessing Officer. The purpose of appellate proceedings is to determine the correct taxable income in accordance with law and not to defeat the claim on account of procedural lapses, particularly when the Department has no objection to restoration. In the interest of justice and fair play, and without expressing any opinion on the merits of the additions/disallowances made in the assessment order, we deem it ap propriate to set aside the impugned order and restore the matter to the file of the Assessing Officer for fresh adjudication in accordance with law. The Assessing Officer shall provide reasonable and adequate opportunity of being heard to the assessee and shall decide the issues afresh on merits after considering the evidences and submissions to be furnished by the assessee. The assessee is also directed to cooperate with the proceedings and furnish all necessary details/evidences within the time allowed by the Assessing Officer. The assessee shall not seek unnecessary adjournments. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
5. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 24st August, 2026
