M/S SANATAN CO-OP CREDIT SOCIETY LIMITED, MUMBAI V. COMMISSIONER OF INCOME TAX-CIR-21(3), MUMBAI

ITA 2773/MUM/2022

AI Insights

The case involves M/s Sanatan Co-op Credit Society Ltd, which appealed against the order of the National Faceless Appeal Centre (NFAC) - Delhi / CIT(A) concerning the disallowance of a deduction claimed under section 80P of the Income Tax Act, 1961. The assessee had claimed a deduction of Rs. 2,62,199 for interest received from cooperative banks, which was initially allowed but later disallowed by the Assessing Officer (AO) under 'income from other sources'. The CIT(A) upheld the AO's decision due to non-compliance by the assessee to the notices of hearing. The Tribunal, considering the principles of natural justice, provided another opportunity for the assessee to present its case.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 300191 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 21-12-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 30-10-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3); 142(1); 143(1); 80P; 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA No. 2773/Mum/2022 (A.Y: 2016-17) M/s. Sanatan Co-op Credit Society Ltd A-1, Ground Floor, Rangwalal Bldg, Sat Rasta, Jecob Circle, Mumbai – 400011 Vs. ACIT – 21(3) Piraml Chambers Lalbaug, Mumbai ./ज आइआर ./PAN/GIR No. : AADS5481M Appellant .. Respondent Assessee by : Mr.Satyaprakash Singh.AR Revenue by : Ms.Richa Gulati.DR Date of Hearing 22.12.2022 Date of Pronouncement 12.12.2022 आद श / O R D E R The assessee has filed the appeal against the order passed by the National Faceless Appeal Centre (NFAC) – Delhi / CIT(A) u/s 143(3) and 250 of the Act. The assessee has raised the fallowing grounds of appeal: 1. The order dated 21/09/2022 passed by the CIT[A], NATIONAL FACELESS APPEAL CENTRE, DELHI is arbitrary, against natural justice, unlawful, against the provisions of Income Tax Act, 1961 and therefore liable to be quashed. ITA No. 2773/Mum/2022 M/s Sanatan Co-op Creit Society Ltd , Mumbai. - 2 - 2. On facts and circumstances of the case and in law, the Hon'ble C.I.T.(A) has erred in confirming the disallowance of Rs.2,62,199/- claimed by the Appellant under section 80[P] of Income Tax Act, 1961. 3. The appellant craves to alter, add, delete, substitute, or modify and other grounds of appeal. 2. The brief facts of the case are that the assessee is a credit cooperative society deriving interest income from savings bank and interest on fixed deposits. The assessee has filed the return of income for the A.Y 2016-17 on 03.02.2018 disclosing a total income of Rs. Nil after claiming the deduction u/s 80P of the Act and the return of income was processed u/s 143(1) of the Act. Subsequently, the case was selected for limited scrutiny and notice u/s 143(2) and 142(1) of the Act along with questionnaire was issued. In response to the notice the assessee has filed the reply on 08.10.2018, 26.10.2018, 10.12.2018 & 20.12.2018 but the A.O has dealt with the explanations and observed that the assessee has disclosed the total income of Rs.Nil after claiming deduction u/s 80P2(d) of the Act of Rs.2,62,199/- being the interest received from cooperative banks claimed exempted. Finally the ITA No. 2773/Mum/2022 M/s Sanatan Co-op Creit Society Ltd , Mumbai. - 3 - AO was not satisfied with the explanations and has made addition under income from other sources and assessed the total income of Rs.2,62,199/- and passed the order u/s 143(3) of the Act on 28.12.2018. 3. Aggrieved by the order the assessee has filed an appeal before the CIT(A),whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and has issued notices of hearing and since there was no compliance by the assessee to notices. Therefore the CIT(A) considering the information on record has confirmed the action of the A.O and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon’ble Tribunal. 4. At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer. The assessee has a good case on merits and shall substantiate with the material evidence and prayed for an opportunity to explain before the lower authorities. Contra, the Ld. DR supported the order of the CIT(A). ITA No. 2773/Mum/2022 M/s Sanatan Co-op Creit Society Ltd , Mumbai. - 4 - 5. Heard the rival submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the fact that there is no appearance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismissed the appeal ex-parte confirming the action of the assessing officer. The Ld.CIT(A) has issued the notices of hearing referred at Page 2 Para 3.1 of the order, but there was no response and thus the Ld.CIT(A) came to a conclusion that the assessee is not interested and decided the appeal based on the information available on record. Whereas the assessee has raised grounds of appeal challenging the denial of deduction U/sec 80P of the Act and there could be various reasons for non appearance which cannot be overruled. Therefore, considering the principles of natural justice shall provide one more opportunity of hearing to the assessee to substantiate the case before the Assessing Officer along with evidences and information. Accordingly, set aside the order of the ITA No. 2773/Mum/2022 M/s Sanatan Co-op Creit Society Ltd , Mumbai. - 5 - CIT(A) and remit the entire disputed issues to the file of the Assessing Officer to adjudicate afresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information and allow the grounds of appeal of the assessee for statistical purposes. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 22.12.2022. Sd/- (PAVAN KUMAR GADALE) JUDICIAL MEMBER Mumbai, Dated 22.12.2022 KRK, PS /Copy of the Order forwarded to : 1. / The Appellant 2. / The Respondent. 3. आ र आ / The CIT(A) 4. आ र आ ( ) / Concerned CIT 5. "#$ % & &' , आ र ) र*, हमद द / DR, ITAT, Mumbai 6. % -. / 0 / Guard file. ान ु सार/ BY ORDER, " & //True Copy// 1. ITA No. 2773/Mum/2022 M/s Sanatan Co-op Creit Society Ltd , Mumbai. - 6 - ( Asst. Registrar) ITAT, Mumbai