Case Law Details
Prakruthi Mahila Credit Society Vs ITO (ITAT Bangalore)
In the case of Prakruthi Mahila Credit Society Vs. ITO, the assessee appealed against the order issued by the National Faceless Appeal Centre (NFAC) for the assessment year 2017-18. The dispute arose after the CIT(A) issued five notices for hearing over a span of 40 days without sufficient time for the assessee to respond. Despite the CIT(A)’s reliance on a previous ruling in PCIT Vs. Ashokji Chanduji Takor, where sufficient opportunities were given, the assessee argued that the time gaps between notices in this case were inadequate. Furthermore, the appeal highlighted that the first notice was issued nearly 18 months after the appeal was filed, which added to the procedural flaws.
The ITAT Bangalore bench, after reviewing the situation, noted that the rapid succession of notices was unfair and did not provide the assessee enough time to comply with the process. It was also observed that the CIT(A) failed to consider the facts submitted in Form 35. As a result, the ITAT set aside the CIT(A)’s order and directed a fresh adjudication of the case, emphasizing the need for a fair hearing. The ITAT’s decision to restore the issue to the file of the Assessing Officer (AO) for fresh adjudication was made in the interest of justice and proper procedure. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This is an appeal filed by the assessee against the order passed by the NFAC, Delhi dated 24/05/2024 vide DIN No. ITBA/NFAC/S/250/2024-25/1065125506(1) for the assessment year 2017-18.
2. At the outset, it was noticed that the ld. CIT(A) has issued 5 notices intimating the date of hearing to the assessee but there was no compliance from the side of the assessee. Thus, the ld. CIT(A) dismissed the appeal of the assessee confirming the order of the AO.
3. The ld. CIT(A) while dismissing the appeal of the assessee has referred to the judgment of Hon’ble Gujarat High Court in the case of PCIT Vs. Ashokji Chanduji Takor 2018-TIOL-2244-HC-AHM-IT.
4. On appeal before us, the ld. AR fairly admitted that the assessee could not appear during the proceedings before the authorities below. However, the ld. AR pointed out that the appeal was instituted before the ld. CIT(A) dated 6/9/2022, whereas the first notice intimating the date of hearing by the ld. CIT(A) was issued almost after a gap of 18 months dated 1/4/2024. Undoubtedly, thereafter, the ld. CIT(A) had issued another 4 notices in a period of less than 30 days by listing the case of the assessee for hearing. According to the ld. AR, the time gap between the notices issued, intimating the date of the hearing, was inadequate. As such, effectively, if it is seen in the right perspective in terms of time only one notice has been issued. According to the ld. AR, there should have been more time gap in the notices issued intimating the date of hearing. The ld. AR before us submitted that the assessee, in the interest of justice and fair play, should have been offered one more opportunity and further assured to make necessary compliances. Thus, the ld. AR prayed to set aside the issue to the file of the AO for fresh adjudication as per the provisions of law as there was also nonappearance during the assessment proceedings.
5. On the other hand, the ld. DR did not raise any serious objection if the matter is set aside to the file of the AO for fresh adjudication as per the provisions of law.
6. We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion, we note that the ld. CIT(A) has issued first notice intimating the date of hearing after a gap of 18 months approximately after filing the appeal by the assessee. Thereafter, other notices were issued by the ld. CIT(A) intimating the date of hearing one after the other within a short span of time. As such, we are of the view that the ld. CIT(A) should have issued notices intimating the date of hearing after a gap of reasonable time.
7. Furthermore, the provisions of sec. 250(6) of the Act require that the ld. CIT(A) should pass the order with reasons after considering the issue involved in dispute. However, the ld. CIT(A) dismissed the appeal of the assessee even without referring to the statement of facts filed by the assessee attached with Form 35 filed along with the appeal.
8. Regarding case law referred by the ld. CIT(A) in the case of Ashokji Chanduji Takor (cited supra), we note that in that case sufficient opportunities were offered to the assessee by the authorities below, whereas in the case on hand, the ld. CIT(A) has issued 5 notices in a span of 40 days only, which appears unreasonable to decide the issue ex-parte to the assessee. In this case, we are of the view that the assessee has not been given sufficient time by the ld. CIT(A) to respond to the notices issued by the ld. CIT(A). Nevertheless, the ld. AR before us has undertaken the responsibility for making necessary compliances before the revenue authorities. Therefore, in the interest of justice and fair play, we are inclined to restore this issue to the file of the AO for fresh adjudication as per the provisions of law. Hence, the ground of appeal of the assessee is hereby allowed for statistical purposes.
9. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in court on 22nd day of August, 2024
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