SRI DURGAMBA PRIMARY AGRICULTURAL Co OPERATIVE SOCIETY LTD, VISAKHAPATNAM V. INCOME TAX OFFICER, WARD-2(5), VISAKHAPATNAM

ITA 233/VIZ/2023

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9772 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 27-11-2023
• Assessment Year: 2021-2022
• Appeal Filed On: 31-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MADHUMAR AVES
• Section: 143(3); 80P; 143(2)

Judgement Text

आयकर अपीलȣयअͬधकरण, ͪवशाखापटणम SMC पीठ, ͪवशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM Įी दुåवूǽ आर एल रेɬडी, ÛयाǓयक सदèय के सम¢ BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER आयकर अपील सं./ I.T.A. No.233/VIZ/2023 (Ǔनधा[रण वष[ / Assessment Year :2021-22) Sri Durgamba Primary Agricultural Co-operative Society Limited, Visakhapatnam. PAN: AAQAS 1545 P Vs. Income Tax Officer, Ward-2(5), Visakhapatnam. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Sri GVN Hari, AR Ĥ×याथȸ कȧ ओर से / Respondent by : Sri Madhumar Aves, Sr. AR सुनवाई कȧ तारȣख / Date of Hearing : 28/11/2023 घोषणा कȧ तारȣख/Date of Pronouncement : 29/11/2023 O R D E R PER DUVVURU RL REDDY, Judicial Member : This appeal filed by the assessee against the order of the Ld. CIT(A)-NFAC, Delhi vide DIN & Order No. ITBA/NFAC/S/250/2023-24/1055147581(1), dated 16/08/2023 arising out of the order passed U/s. 143(3) of the Income Tax Act, 1961 [the Act], dated 21/12/2022 for the AY 2021-22. 2 2. Brief facts of the case are that the assessee is an Agricultural Cooperative Society filed its return of income for the AY 2021-22 wherein the assessee claimed deduction of Rs. 40,53,919/- U/s. 80P of the Act. Subsequently the case was selected for complete scrutiny for the reason ‘first year of claim of deduction U/s. 80P’. Thereafter, notices U/s. 143(2) and U/s. 142(1) of the Act were issued to the assessee and in reply the assessee made submissions stating that the assessee-society carries on the activity of providing credit facilities to its members and there is no change in the nature of activities of the society for the last three years. Further, the assessee submitted that the assessee procures and transfers the paddy grown by its members to the Andhra Pradesh Civil Supplies Corporation and in turn the society earns commission from APCSC. The assessee’s sources of earnings during the year are the interest earned from investments with District Cooperative Bank, amount received on sale of paddy of the members and interest on loans given to its Member Farmers. The assessee also submitted the computation of income, P & L Account, balance sheet, objectives and bye-laws of the assessee-society. On perusal of the submissions of the assessee, the Ld. AO observed that the assessee has received interest income of Rs. 1,59,217/- from the District Cooperative 3 Bank, Visakhapatnam and has claimed this as deduction U/s. 80P. The Ld. AO further observed that the assessee has taken into account interest income earned from its business of providing credit facilities to its members of Rs. 88,14,601/- and other income of Rs. 3,88,358/- while calculating the deduction U/s. 80P of the Act however, the assessee did not submit any documentary evidence in support of the same. Therefore, the Ld. AO disallowed the assessee’s claim of deduction U/s. 80P of the Act amounting to Rs. 40,53,919/-. Accordingly, the Ld. AO completed the assessment U/s. 143(3) r.w.s 144B of the Act and passed the assessment order on 21/12/2022 wherein the Ld. AO made a disallowance of Rs. 40,53,919/- claimed by the assessee U/s. 80P of the Act. Aggrieved by the order of the Ld. AO, the assessee carried the matter in appeal before the Ld. CIT(A)-NFAC. On appeal, the Ld. CIT(A)-NFAC, dismissed the appeal of the assessee ex-parte as the assessee did not make any submissions nor comply with the notices issued to the assessee during the course of hearing of the appeal. Aggrieved by the order of the Ld. CIT(A)-NFAC, the assessee is in appeal before the Tribunal by raising the following grounds of appeal: “1. The order of the Ld. CIT( A) is contrary to the facts and al so the l aw appl icabl e to the facts of the cas e. 4 2. The Ld. CIT(A) is not justified in dismissing the appeal ex- parte wi thout providing sufficient opportunity. 3. Without prejudice to the above, the Ld. CIT(A) ought to h ave del eted the addi tion of Rs. 40,53,919/- made by the AO to wards dis al l owance of deduction U/s. 80P of the Act. 4. Any other grounds that may be urged at the ti me of hearing.” 3. At the outset, the Ld. AR submitted before me that the Ld. CIT (A)- NFAC has passed ex-parte order without providing proper opportunity to the assessee of being heard following the principles of natural justice. The Ld. AR further submitted that the Ld. AO during the assessment proceedings did not consider the submissions of the assessee and wrongly disallowed the claim of the assessee made U/s. 80P of the Act as the assessee has given loans only to its Members and not to any Non- members. It was also submitted that the income earned by the assessee on deposits with the DCC Bank Ltd, Visakhapatnam constitutes operational income from business but not the other income. These issues were not considered by the Ld. Revenue Authorities and dismissed the appeal of the assessee. It was therefore pleaded that the matter may be remitted back to the file of the Ld CIT (A)-NFAC in order to provide one more opportunity to the assessee of being heard. 4. Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that proper opportunities had been provided to 5 the assessee however, on the given dates of hearing, neither the assessee nor its Representative appeared before the Ld. CIT (A)-NFAC. It was further submitted that the Ld. CIT (A)-NFAC had no other option but to pass ex-parte order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(A)-NFAC does not call for any interference. 5. I have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, I find that the Ld. CIT (A)-NFAC had posted the case on more than two occasions. However, none appeared on behalf of the assessee before the CIT(A)- NFAC nor filed any submissions on the given dates of hearing. Therefore, the Ld. CIT (A)-NFAC was left with no other option except to adjudicate the appeal ex-parte. In this situation, I do not find much strength in the arguments advanced by the ld. AR. However, considering the issues involved in the appeal and the prayer of the Ld. AR, in the interest of justice, strictly following the principles of natural justice, I hereby remit the matter back to the file of Ld. CIT (A)-NFAC in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, I also hereby caution the assessee to promptly co-operate before the Ld. CIT (A)-NFAC in the proceedings failing which the Ld. CIT (A)-NFAC shall be at liberty to pass 6 appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly. 6. In the result, appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove. Pronounced in the open Court on 29 th November, 2023 Sd/- (दुåवूǽ आर.एल रेɬडी) (DUVVURU RL REDDY) ÛयाǓयकसदèय/JUDICIAL MEMBER Dated : 29/11/2023 OKK - SPS आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the order forwarded to:- 1. Ǔनधा[ǐरती/ The Assessee– Sri Durgamba Primary Agricultural Cooperative Society Limited, D.No. 7-143, Anakapalli Road, Sabbavaram Mandalam, Visakhapatnam, Andhra Pradesh – 531035. 2. राजèव/The Revenue –Income Tax Officer, Ward-2(5), O/o. ITO, Infinity Tower, Shankaramatham Road, Santhipuram, Visakhapatnam, Andhra Pradesh – 530016. 3. The Principal Commissioner of Income Tax, 4.आयकर आयुÈत (अपील)/ The Commissioner of Income Tax (Appeals), 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, ͪवशाखापटणम/ DR, ITAT, Visakhapatnam 6.गाड[ फ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam