Primary Agriculture Co Operative Credit Society, Karimnagar V. ITO, Ward-2, Karimanagar

ITA 141/Hyd/2023

AI Insights

The case involves appeals by the Primary Agricultural Cooperative Credit Society against the orders of the Commissioner of Income Tax (Appeals), NFAC, which confirmed the penalty imposed by the Assessing Officer under section 271B of the Income Tax Act, 1961, for the assessment year 2017-18. The society had not filed its return of income within the due date and had substantial cash deposits during the demonetization period. The Assessing Officer, after not receiving a timely return, conducted an assessment under section 144 of the Act, leading to the imposition of a penalty. The CIT(A) upheld this decision, prompting the society to appeal to the Income Tax Appellate Tribunal. The Tribunal, noting the absence of the assessee's representation and the need for a fair hearing, remanded the case back to the CIT(A) for further proceedings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122363 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 19-04-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 07-03-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 144; 142(1); 133(6); 80P; 250; 274; 139(1); 271B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad Before Shri Rama Kanta Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member O R D E R LALIET KUMAR, J.M.: The captioned appeals are filed by the assessee, feeling aggrieved by the separate orders of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dt.10.01.2023 invoking proceedings under section 271B of the Income Tax Act, 1961 (in short, “the Act”) for the assessment year 2017-18. 2. The grounds raised by the assessee in ITA No.141/Hyd/2023 for A.Y. 2017-18 read as under : “1. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in law and facts of the case in confirming the order of the Assessing Officer under section 271B of the Income Tax Act, 1961. ITA.Nos.141 and 142/Hyd/2023 Assessment Years: 2017-18 Primary Agricultural Cooperative Credit Society, 2-10-D/A, Jammikunta, Karimnagar - 505122. PAN : AAAAP2175Q. Vs. Asst. Commissioner of Income Tax, Central Circle 1(4), Hyderabad. (Appellant) (Respondent) Assessee by: None Revenue by : Sri K.P.R.R. Murthy. Date of hearing: 20.04.2023 Date of pronouncement: 25.04.2023 2 2. On the facts and in the circumstances of the case, the Ld.CIT(A) erred in law and facts of the case in confirming the imposition of penalty of Rs.1,50,000/- under section 271B as the assessee is a Primary Agricultural Cooperative Society consisting of Self Help Groups as members on mutuality basis. 3. Similar grounds were raised by the assessee in other appeal also i.e., ITA 142/Hyd/2023 for A.Ys. 2017-18 except the amounts involved. 4. Before us, ld. DR submitted that the issues raised in both the appeals are identical. In view of the aforesaid submission, we, for the sake of convenience proceed to dispose of both the appeals by a consolidated order but however refer to the facts in ITA No.141/Hyd/2021. 5. The brief facts of the case are that assessee has not filed its return of income for A.Y. 2017-18 within the due date as per the provisions of section 139(1) of the Act. In the present case, assessee had deposited substantial cash in bank account during the demonetization period but has not filed the return of income. Hence, notice u/s 142(1) of the Act was issued on 23.11.2017 calling the assessee for filing of return of income. However, assessee failed to furnish the return of income. Thereafter, in view of the provisions of section 144(1)(b) of the Act on account of failure on the part of assessee to furnish income tax return in response to notice u/s 142(1) of the Act, Assessing Officer had initiated assessment proceedings u/s 144 of the Act. 3 5.1. During the course of assessment, the Assessing Officer called for bank statements of the assessee u/s 133(6) of the Act. Thereafter, assessee filed its return of income on 12.09.2019 admitting taxable income at Rs.Nil beyond the due date mentioned in the notice u/s 142(1) of the Act and hence, the same was treated as non-est. Later, a show cause notice was issued against the assessee on 26.09.2019. In response to show cause notice, assessee furnished reply and the same was examined and found that assessee has not produced any evidence to establish its case. Hence, the Assessing Officer had completed the assessment u/s 144 of the Act by assessing the total income at Rs.52,39,030/- interalia making certain additions / disallowances and also initiated penalty proceedings u/s 274 r.w.s. 270A of the Act. 6. Feeling aggrieved with the penalty order passed by the Assessing Officer, assessee carried the matter before ld.CIT(A) / NFAC, who dismissed the appeal of assessee. 7. Feeling aggrieved with the order of ld.CIT(A) / NFAC, assessee is now in appeal before us. 8. In this appeal, none appeared at the time of hearing on behalf of the assessee. On perusal of the record, we find that assessee was given numerous opportunities to appear but however the assessee neither filed any adjournment application nor made any written submissions and hence, the appeal of the assessee was decided exparte on the basis of the material available on record by the ld.CIT(A) / NFAC. 4 9. Per contra, the ld.DR supported the orders of lower authorities. 10. We have heard the rival submissions and perused the material on record. In the present case, the Assessing Officer had completed the assessment u/s 144 of the Act by making certain additions / disallowance vide para 9 of his order, by holding as under : “9. The reply submitted by the assessee has been examined. The as sis eligible for deduction u/s 80P once the assessee filed the return of income within due date and claim the deduction. However, in this case, the assessee has not filed its return of income within due date and hence, the deduction u/s 80P cannot be allowed as per the provisions of section 80A(5) of the I.T. Act. Regarding the provisions for NPAs substandard assets of Rs.91,491/- and provision for overdue interest on loan of Rs.4,84,052/-, assessee submitted that these amounts pertains to members who were not capable of repaying the loans and interest on loans. However, assessee has not produced any evidence to establish his claim. Hence, the reply submitted by the assessee with regard to deduction u/s 80P, Provision for NPAs sub- standard assets and provision for overdue interest on loan is not acceptable. Further, with regard to Misc. Expenditure of Rs.42,387/-, assessee has not submitted any evidence.” 11. Subsequently, the assessee carried the matter before the ld.CIT(A), who had issued notice u/s 250 of the Act calling for the details in support of its grounds of appeal. Though the assessee was granted numerous opportunities to substantiate its case by issuing notices dt.27.10.2022, 16.11.2022 and 12.12.2022, assessee neither appeared nor filed any written submissions or any adjournment application and hence, finally, the ld.CIT(A) upheld the order of Assessing Officer on the basis of the material available on record. 5 12. In light of the above, though, invariably the appeal of the assessee is required to be dismissed on account of non- prosecution and non-furnishing of documents, however, considering the totality of the facts and circumstances, and more particularly, in the interests of justice, one more opportunity is granted to the assessee to appear and contest the case before the ld.CIT(A) / NFAC. Hence, we remand back the appeal to the file of ld.CIT(A) / NFAC with a liberty to grant one more opportunity to the assessee to prove its case. On the date of hearing fix by the ld.CIT(A) / NFAC, the assessee shall file all the documents / evidence in support of its case and in that eventuality, the ld.CIT(A) / NFAC shall call for the remand report from the Assessing Officer. In case, the assessee failed to file any documents in support of its case, ld.CIT(A) / NFAC shall decide the matter in accordance with the law. Accordingly, the appeal of assessee is allowed for statistical purposes. 13. In the result, the appeal of the assessee in ITA No.141/Hyd/2023 is allowed for statistical purposes. 14. As far as the other appeal i.e., ITA No.142/Hyd/2023 is concerned, in view of the submission of ld. DR that the issues raised in both the appeals are identical, we for the reasons stated hereinabove while deciding the appeal in ITA 141/Hyd/2023 and for similar reasons, allow the other appeal for statistical purposes. 15. In the result, the appeal of assessee in ITA No.142/Hyd/2023 is allowed for statistical purposes. 6 16. To sum up, both the appeals of assessee are allowed for statistical purposes. A copy of the same may be placed in respective case files. Order pronounced in the Open Court on 25 th April, 2023. Sd/- Sd/- Sd/- Sd/- Sd/- Sd/- (RAMA KANTA PANDA) ACCOUNTANT MEMBER (LALIET KUMAR) JUDICIAL MEMBER Hyderabad, dated 25 th April, 2023. TYNM/sps Copy to: S.No Addresses 1 Primary Agricultural Cooperative Credit Society, 2-10-D/A, Jammikunta, Karimnagar - 505122. 2 Asst. Commissioner of Income Tax, Central Circle 1(4), Hyderabad. 3 DR, ITAT Hyderabad Benches 4 Guard File By Order