Nikanth (Narol) Co-op. Shops & Off Society Limited Vs ITO Ward-1(1)(1) (ITAT Ahmedabad)
Income Tax Appellate Tribunal (ITAT), Ahmedabad bench, has overturned an ex-parte tax assessment and the subsequent dismissal of an appeal concerning Nikanth (Narol) Co-op. Shops & Off Society Limited. The tribunal has directed the case be sent back to the Assessing Officer (AO) to allow the society a proper opportunity to present its position, conditional on the society paying a penalty for previous failures to cooperate.
The dispute for the Assessment Year 2018-19 began after the AO initiated reassessment proceedings based on information about the society’s sale of immovable properties totaling Rs. 60,51,000/-. The society reportedly did not respond to multiple notices issued by the AO. This led the AO to complete the assessment without the society’s input, treating the entire sale amount as Long-Term Capital Gains subject to tax and initiating penalty procedures.
The society appealed this decision to the Commissioner of Income Tax (Appeals) but filed the appeal 18 days late. The society cited the illiteracy of its chairman and unfamiliarity with legal processes as reasons for the delay and lack of response, claiming the assessment order was received late. The CIT(A) declined to excuse the delay, finding the reasons unconvincing and unsupported by evidence. Furthermore, the CIT(A) noted the society’s failure to appear for scheduled hearings during the appeal process, leading to the dismissal of the appeal for non-prosecution and confirmation of the AO’s tax addition.
