Malanadu Co-op. Agriculture and Rural Development Bank Ltd. Vs ITO (ITAT Cochin)
The case involves Malanadu Co-operative Agriculture and Rural Development Bank Ltd., a co-operative society registered under the Kerala Co-operative Societies Act, 1969. The bank filed its return of income for the assessment year 2020-21, claiming a deduction under Section 80P of the Income Tax Act, 1961. However, the Income Tax Officer (ITO) assessed the return and initiated penalty proceedings under Section 270A due to an alleged underreporting of income. The assessee applied for immunity from penalty but failed to file the prescribed Form 28 within the stipulated one-month period. Consequently, the AO rejected the immunity request and imposed a penalty of ₹13,92,924. The CIT(A) upheld the penalty without addressing the immunity claim, prompting the assessee to approach the Income Tax Appellate Tribunal (ITAT) Cochin.
Upon reviewing the appeal, ITAT Cochin noted that neither the AO nor the CIT(A) had properly examined the immunity application under Section 270A. As a result, the Tribunal ruled that the matter should be remanded to the AO for reconsideration. The Tribunal emphasized that all arguments raised by the assessee remain open for review by the AO, ensuring a fair opportunity to justify the immunity claim. With this directive, the ITAT partially allowed the appeal, instructing the AO to assess the application on its merits before making a final decision.
