DK 140 UTHANGARAI PUESHES TEACHERS & EMP. CO-OP THRIFT & CREDIT SCOIETY LTD.,KRISHNAGIRI V. ITO, WARD-1, KRISHNAGIRI

ITA 1227/CHNY/2025

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The case involves DK140 Uthangarai Pueshes Teachers & Emp. Co-op. Thrift & Credit Society Limited, the appellant, contesting an order from the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which confirmed a disallowance under section 80P of the Income Tax Act, 1961 for the assessment year 2020-21. The primary contention was regarding the appropriate appeal fee, which the appellant argued was only INR 500 as per clause (d) of Section 253(6) of the Act, due to the appeal being dismissed in limine by the CIT(A) on non-compliance grounds rather than merits. The Income Tax Appellate Tribunal (ITAT) in Chennai admitted the appeal for adjudication based on precedents and remanded the case back to the CIT(A) for a decision on merits, providing the appellant another opportunity to present its case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 706081 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2020-2021
• Other Referred Cases: Aasife Biriyani Private Limited v. ITO, Anil Kumar Ohja vs. DCIT, Rajakamal Polymers (P) Ltd. v. CIT, Dr. Ajith Kumar Pandey v. ITAT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR
• Assessee Lawyers: T.S. LAKSHMI VENKATARAMAN; F
• Keywords: Unexplained cash credit
• Section: 144; 142(1); 68

Judgement Text

"आयकर अपीलीय अिधकरण, ’डी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी जगदीश, लेखा सद˟ क े समƗ । Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri Jagadish, Accountant Member आयकर अपील सं./I.T.A. No.1227/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2020-21 DK140 Uthangarai Pueshes Teachers & Emp. Co-op. Thrift & Credit Society Limited, 140, Uthangarai, Krishnagiri-635 001. [PAN:AAGAD3195A] Vs. The Income Tax Officer, Ward 1, Krishnagiri. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri T.S. Lakshmi Venkataraman, F.C.A. ŮȑथŎ की ओर से/Respondent by : Shri Vijay Kumar, JCIT सुनवाई की तारीख/ Date of hearing : 18.06.2025 घोषणा की तारीख /Date of Pronouncement : 30.06.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 24.02.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2020-21. 2. The assessee raised 6 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) I.T.A. No.1227/Chny/25 2 is justified in confirming the disallowance claimed under section 80P of the Income Tax Act, 1961 [“Act” in short]. 3. When the appeal was taken up for hearing, the AR Shri T.S. Lakshmi Venkataraman, F.C.A submits that the Registry of ITAT issued defect notice on the ground that assessee had paid appeal fees of ₹.500/- only instead of ₹.10,000/-. The ld. AR further submits that the appeal filed before the ld. CIT(A) was dismissed in limine only on the ground of non-compliance to the hearing notices and not on merits and therefore, the fees as per clause (d) of Section 253(6) of the Income Tax Act, 1961 [“Act” in short] was only ₹.500/-. He placed reliance on the decision of Co-ordinate Bench in the case of Aasife Biriyani Private Limited v. ITO in ITA No. 2460/Chny/2024 dated 10.12.2024 and pleaded to admit the appeal for adjudication. 4. We have perused the above case law and noted that the Coordinate Benches of the Tribunal followed the decision in the case of Anil Kumar Ohja vs. DCIT in ITA No.189/Mds/2012, dated 28.03.2012 for assessment year 2005-2006 and held as under: 3. We find that the issue deficit appeal fees is squarely covered in favour of the assessee by the decision of the Co-ordinate Bench of the Tribunal in the case of Anil Kumar Ohja (supra) which held as under:- I.T.A. No.1227/Chny/25 3 ‘’2. We find that there is a letter filed by the assessee whereby he objected to a notice from the Registry regarding short payment of fees. Ld. counsel for the assessee submitted that the appeal was dismissed by the CIT(Appeals) only on the ground of non- appearance and not on merits. Therefore, as per the assessee, the fees as per clause (d) of Section 253(6) of Income-tax Act, 1961 (in short 'the Act') was only 500/-. In support, learned counsel has filed a decision of Hon'ble Karnataka High Court in the case of Rajakamal Polymers (P) Ltd. v. CIT (291 ITR 314) and also a decision of Hon'ble Patna High Court in the case of Dr. Ajith Kumar Pandey v. ITAT (310 ITR 195). 3. We find that CIT(Appeals) had dismissed the assessee's appeal for non-prosecution and had not considered the issue on merits. In our opinion, in such a situation, the fees paid has to be as per clause (d) of Section 253(6) of the Act. The assessee has rightly paid the sum of 500/- as stipulated in the said clause of the Act. In the case of Rajakamal Polymers (P) Ltd. (supra), Hon'ble Karnataka High Court had held that when an appeal was rejected by the CIT(Appeals) on the ground of limitation, the fee payable for further appeal before this Tribunal, was only 500/- under clause (d) of Section 253(6) of the Act. In our opinion, there is not much difference between an order of CIT(Appeals) which is not on merits, but dismissing an appeal whether on account of limitation or on account of non-appearance of the parties. In this view of the matter, we admit the appeal of the assessee’’. 4. Respectfully following the co-ordinate bench decision, we admit the appeal of the assessee for adjudication and overruled the objection of the Registry……” 5. In view of the above decisions of the Coordinate Benches of the Tribunal, the appeal filed by the assessee on payment of appeal fees at ₹.500/- is admitted for adjudication. 6. We note that according to the Assessing Officer the assessee admitted NIL income and claimed deduction of ₹.38,42,644/- under section 80P of the Act. The return filed by the assessee was selected I.T.A. No.1227/Chny/25 4 for limited scrutiny and issued various statutory notices including show- cause notice as reflected at page 2 of the assessment order. However, there was no compliance from the assessee. Considering the details collected from the ITR, balance sheet, profit & loss account, Form 3CB (audit report under section 44AB of the Act), the Assessing Officer noted that the capital investment/fund for ₹.1,89,68,890/- reflecting in the balance sheet as on 31.03.2020 has been introduced during the year itself. Since the assessee failed to provide the source of capital introduced during the year, the Assessing Officer treating the amount of ₹.1,89,68,890/- as unexplained credit under section 68 of the Act, added to the total income of the assessee and completed the assessment under section 144 r.w.s. 144B of the Act dated 19.09.2022. On appeal, the ld. CIT(A) confirmed the addition made by the Assessing Officer and dismissed the appeal of the assessee for non-compliance to the hearing notices issued by the ld. CIT(A) or filed any written submission or documentary evidences in support of the grounds raised by the assessee. 7. The ld. AR Shri T.S. Lakshmi Venkataraman, F.C.A. submits that non-compliance to the hearing notices issued by the ld. CIT(A) is neither wilful nor wanton. He vehemently argued that the assessee I.T.A. No.1227/Chny/25 5 society is located in remote place and most of the statutory notices under section 143(2) and 142(1) of the Act were issued during nation- wide lockdown for Covid-19 pandemic and due to lack administrative assistance, the assessee could not furnish any reply to the Assessing Officer. The ld. AR undertakes to put appearance and furnish complete details and thus, prayed that the assessee may be afforded one more opportunity to prosecute his case before authorities below. 8. The ld. DR Shri Vijay Kumar, JCIT drew our attention to page 2 of the assessment order and para 6 of the impugned order and argued that the Assessing Officer as well as ld. CIT(A) afforded ample opportunities to the assessee, but, the assessee could not furnish any explanation or documentary evidence in support of grounds raised by the assessee. 9. Heard both the parties and perused the material available on record. In this case, the Assessing completed the assessment under section 144 r.w.s. 144B of the Act dated 19.09.2022 by treating the capital introduced during the year of ₹.1,89,68,890/- as unexplained credit under section 68 of the Act, against which the assessee preferred an appeal before the ld. CIT(A). As per para 6 of the I.T.A. No.1227/Chny/25 6 impugned order, we note that the ld. CIT(A) issued hearing notices dated 10.11.2022, 27.06.2024, 17.09.2024, 06.11.2024 and 21.01.2025, but, however, neither any reply was furnished nor any adjournment was sought for by the assessee. On perusal of the impugned order and assessment order, we note that there was no assistance from the assessee to various notices/show-cause notices issued by the Assessing Officer as well as the ld. CIT(A) and the assistance of assessee is necessary in terms of additions involves under section 68 of the Act. We note that in his written submissions, the ld. AR undertakes to put his appearance and furnish complete details to substantiate the claims of the assessee and prayed for affording one more opportunity. Considering the submissions of the ld. AR and the ld. DR and in the interest of justice, we deem it proper to afford one more opportunity and remand the matter to the file of the ld. CIT(A) to decide the issues afresh on merits in accordance with law by affording one more opportunity to the assessee. The assessee has liberty to file the written submissions/ documentary evidences, if any, before the ld. CIT(A) to substantiate its claim. Thus, the grounds raised by the assessee are allowed for statistical purposes. I.T.A. No.1227/Chny/25 7 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 30th June, 2025 at Chennai. Sd/- Sd/- (JAGADISH) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 30.06.2025 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. "