PRATH KRISHI SAKH SAHAKARI SAMITI MARYADIT,LAMKANA V. INCOME TAX OFFICER WARD 1(1), JABALPUR

ITA 18/JAB/2025

AI Insights

The case involves Prath Krishi Sakh Sahakari Samiti Maryadit Lamkana, a society, which appealed against the order of the Addl. Commissioner of Income Tax (Appeals)-9, Mumbai, for the assessment year 2017-18. The society's appeal was dismissed ex-parte by the CIT(A), leading to the society's appeal to the Income Tax Appellate Tribunal. The primary issues revolved around the society's inability to respond to the notices due to their remote location and lack of familiarity with technology and legal compliances, and the unjust disallowance of a deduction claimed under section 80P of the Income Tax Act, 1961. The Tribunal found that the principles of natural justice were not served and thus decided to give the society another opportunity to present their case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705663 (ITAT-JABALPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK BHURA
• Assessee Lawyers: SAPAN USRETHE
• Keywords: Set aside; Reasonable cause; Corroborative evidences; Principle of natural justice; TDS; FORM 26AS

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH “DB”, JABALPUR BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI, NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No. 18/JAB/2025 Assessment Year: 2017-18 Prath Krishi Sakh Sahakari Samiti Maryadit Lamkana 01, Manjholi Jabalpur, Lamkana-483110. v. ITO Ward-1(3) Annexe Building, Aayakar Bhawan, Napier Town, Jabalpur-482001. PAN:AACAP1804G (Appellant) (Respondent) Appellant by: Shri Sapan Usrethe, Adv Respondent by: Shri Alok Bhura, Sr. CIT(DR) Date of hearing: 22 05 2025 Date of pronouncement: 30 06 2025 O R D E R PER KUL BHARAT, VICE PRESIDENT.: This appeal, filed by the assessee, against the order dated 10.02.2024 of learned Addl. Commissioner Income Tax (Appeals)- 9, Mumbai [hereinafter referred as to “Ld. Addl. CIT(A)”] pertaining to the assessment year 2017-18. The Assessee has raised the following grounds of appeals: - “1. The learned Commissioner of Income tax (Appeal) NFAC was not justified in passing exparte order without appreciating that appellant was prevented with reasonable cause in not filing the response as society was not aware of fixation of case and society was at remote area and are not conversant with income tax and thus appellant was not able to file response. 2. The learned Commissioner of Income tax (Appeal) NFAC was not justified in passing exparte order without appreciating that appellant was prevented with reasonable cause in not filing the response as no notice was received in the email provided in the form 35 and no physical notice was issued to appellant. 3. The learned Commissioner of Income tax (Appeal) NFAC was not justified in dismissing the appeal on the ground of delay without giving any opportunity of hearing as no notice was ever been served to appellant. 4. The learned Commissioner of Income tax (Appeal) NFAC was not justified in confirming the disallowance of Rs.20,03,303/- which is the deduction claimed by ITA No.18/JAB/2025 Page 2 of 4 the appellant under section 80P of the act without appreciating that appellant is a sahakari samiti and is maintaining proper books of accounts and deduction claimed under section 80P is allowable to appellant which was denied by the AO on the ground that appellant have not supplied the documents. 5. The learned Commissioner of Income tax (Appeal) NFAC was not justified in confirming the disallowance which is the deduction claimed by the appellant under section 80P of the act without appreciating the facts that commission was received from the Government agency and TDS was also deducted and it is duly reflecting in the Form 26AS and duly shown in the ITR and it was disallowed on frivolous grounds. 6. The learned Commissioner of Income Tax (Appeals)/NFAC was not justified in confirming the action of AO with regard to the deduction claimed by the appellant under section 80P of the Act without appreciating that in subsequent year it was duly allowed by the AO in the scrutiny assessment and also by CPC and hence disallowance in the year under consideration is bad in law. 7. The appellant craves for leave to amend, add to or omit any ground up to the time of hearing of the appeal.” 2. The facts giving rise to the present appeal are that the assessee is a society and filed its return of income at Nil. Its case was taken up for limited scrutiny on the basis that “Deduction under Chapter VIA”. The AO noted that the society filed its return of income belatedly. Therefore, the penalty proceedings u/s 270A of the Income Tax Act, 1961 (“Act”, for short) was separately initiated. The Assessing Officer in the absence of the supporting evidence disallowed the claim made u/s 80P of the Act amounting to Rs.20,03,303/-. Thus, the Assessing Officer assessed income at Rs.20,03,303/-. Aggrieved by this, the assessee preferred appeal before the Ld. CIT(A), who also dismissed the appeal of the assessee ex-parte to the assessee. Now the assessee is in appeal before this Tribunal. 3. Apropos to the grounds of appeal, the Ld. Counsel for the assessee submitted that both the lower authorities have not given adequate opportunity to the assessee and the assessment order as well as the First Appellate Order was passed exparte to the assessee. Ld. Counsel urged that the assessee society is located ITA No.18/JAB/2025 Page 3 of 4 in remote area and is not conversant about the technology and various legal compliances. Thus, for the bonafide reasons the assessee could not attend proceedings before the authorities below. Therefore, he prayed that the impugned order may be set aside and may be restored to the assessing authority for making assessment order afresh. 4. On the other hand, the Ld. Departmental Representative (DR) opposed the submissions of the assessee and supported the orders of the lower authorities. He contended that the reasonable opportunity was given to the assessee society and in the absence of relevant material the authorities below is justified in making the ex-parte assessment and sustaining the same. He further contended that the assessee ought to have been vigilant about his case. The onus is on the assessee to prove that it is eligible for deduction u/s 80P of the Act. In this case, the assessee failed to discharge its onus. 5. We have heard rival contention and perused the materials available on record. The assessee is a society stated to be located in remote area of Madhya Pradesh. The office bearers are not fully conversant with the provisions of the Act. Hence, due to bona fide reasons the assessee society failed to attend proceedings before the authorities below. Therefore, looking to the totality of the facts and the material placed before us, we are of the considered view that to sub-serve the principles of natural justice, assessee should be given one more opportunity to represent his case effectively. We, therefore, hereby set aside the impugned orders and restore the assessment to the file of the Assessing Officer to make assessment afresh, after giving proper ITA No.18/JAB/2025 Page 4 of 4 opportunity to the assessee. Grounds of appeal of the assessee are allowed for statistical purposes. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 30/06/2025. Sd/- Sd/- [NIKHIL CHOUDHARY] [KUL BHARAT] ACCOUNTANT MEMBER VICE PRESIDENT DATED: 30/06/2025 Vijay Pal Singh, (Sr. PS) Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT (Judicial) 4. The PCIT 5. DR, ITAT, Jabalpur 6. Guard File By order // True Copy// Assistant Registrar ITAT, Jabalpur "