SEOHARA CO-OPERATIVE CANE DEVELOPMENT UNION LIMITED,BIJNOR V. ITO WARD 3(1), BIJNOR

ITA 2849/DEL/2024

AI Insights

The case involves the Seohara Co-operative Cane Development Union Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC) for the Assessment Year 2017-18. The primary issues in the appeal were the denial of deduction under section 80P(2)(a)(iii) of the Income Tax Act and the confirmation of an estimated disallowance of management expenses. The Assessee argued that it is a welfare society for cane growers and a cooperative society registered under the U.P. Sahkari Samiti Adhiniyam 1965, thus eligible for deductions under section 80P. The Tribunal found that the lower authorities had not adequately addressed the Assessee's grounds on their merits and had passed ex-parte orders due to the Assessee's failure to appear or provide necessary submissions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126229 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: misc
• Laws Referred To: I. T. Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: GURNEET
• Keywords: Principle of natural justice; Grounds of appeal; Dismissed; National Faceless Appeal; Disallowance of expense; Commissioner; Commissioner of Income Tax; State Government
• Section: 144; 80P

Judgement Text

" 1 ITA No. 2849/Del/2024 Seohara Co-operative Cane Development Union Ltd. IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘G’ NEW DELHI) BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 2849/Del/2024 (A.Y. 2017-18) Seohara Co-operative Cane Development Union Ltd. 34, Station Road, Seohara, Bijnor, Uttar Pradesh PAN: AAACS1789H Vs. ITO Ward-3(1) Income Tax Office, Nazibabad, Bijnor, Uttar Pradesh Appellant Respondent Assessee by Advocate Gurneet Revenue by Sh. Sahil Kumar Bansal, Sr. DR Date of Hearing 17/04/2025 Date of Pronouncement 23/04/2025 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeal)/National Faceless Appeal Centre (‘NFAC’ for short) dated 23/04/2024 pertaining to Assessment Year 2017-18. 2. The grounds of Appeal are as under:- “That the Authorities below erred on facts and in law in not allowing deduction w/s 80P(2)(a)(iii) of I. T. Act of Rs. 6034436/- without considering that appellant is a Welfare Society for cane growers and the main object of the society as 2 ITA No. 2849/Del/2024 Seohara Co-operative Cane Development Union Ltd. set out in the Bye Laws is to provide assistance to the cane growers for the better development of cane crops, to make available and provide assistance in obtaining better quality of seeds, fertilizers, agriculture equipment's etc and to also provide credit facilities to the members for purchase of equipment's, seeds, fertilizers etc. (2) That the Authorities below erred in not considering that the appellant is a Co-operative society, registered under the U.P. Sahkari Samiti Adhiniyam 1965 by the Registrar Ganna Sahkari Samityan and is duly eligible for deduction u/s 80P. (3) That the Authorities below erred on facts and in law in confirming the estimated disallowance of Rs. 2436576/- being 10% of 'Management Expenses' without considering that the appellant is a state government society and books of accounts are audited under the co-operative societies Act and all the expenses are vouched and verifiable. 4) That the Authorities below erred on facts and in law in not considering that without rejecting the Audited Accounts, Estimated disallowance of expenses cannot be made. WITHOUT PREJUDICE TO ABOVE (5) That the Ld. C.I.T. (A), NFAC, erred on facts and in law in not considering that entire income of the society is eligible for deduction u/s 80P of It Act and thus any increase in surplus by way of disallowance of expenses will also be eligible for deduction and the resultant income shall be NIL. That the addition confirmed is highly excessive, contrary to the facts, law and principle of natural justice and without providing sufficient time and opportunity to have its say on the reasons relied upon by CIT (A).” 3. The Ld. Counsel for the Assessee filed an application for adjournment. Considering the issue involved in the present Appeal, we 3 ITA No. 2849/Del/2024 Seohara Co-operative Cane Development Union Ltd. reject the application for adjournment filed by the Assessee's Representative. 4. Brief facts of the case are that, the Assessee filed return of income declaring total income of Rs. ‘NIL’. The return of the Assessee selected for scrutiny under CASS.An assessment order came to be passed on 17/12/2019 u/s 144 of the Act by computing the income of the Assessee at Rs.84,71,010/-. Aggrieved by the ex-parte assessment order dated 17/12/2019, the Assessee preferred an Appeal before the Ld. CIT(A). Once again, the Assessee failed to make any submission in support of the grounds of the Appeal before the Ld. CIT(A), accordingly, the Appeal filed by the Assessee came to be dismissed on 23/04/2024. Aggrieved by the order of the Ld. CIT(A) dated 23/04/2024, the Assessee preferred the present Appeal on the Grounds mentioned above. 5. We have heard both the parties and perused the material available on record. The Assessee failed to appear before both the Lower Authorities and therefore, the adverse orders have been passed by the A.O. as well as Ld. CIT(A) against the Assessee. The Ld. CIT(A) dismissing the Appeal on the grounds that ‘the Assessee was provided with adequate opportunities to make submissions support of the Appeal, however, the Assessee did not submit any details either in respect of 4 ITA No. 2849/Del/2024 Seohara Co-operative Cane Development Union Ltd. claim of 80P or claim of expenses’, however, the Ld. CIT(A) has not decided all the Grounds of Appeal of the Assessee on its merits. Considering the fact that both the Lower Authorities have passed ex- parte order, we restore the issue involved in the present Appeal to the file of the A.O. for framing de-novo assessment. The Assessee is also directed to co-operate with the assessment proceedings, failing which the A.O. is at liberty to pass the assessment order in accordance with law. 6. In the result, the Appeal of the Assessee is partly allowed for statistical purpose. Order pronounced in the open court on 23rd April , 2025 Sd/- Sd/- (MANISH AGARWAL) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 23.04.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI 5 ITA No. 2849/Del/2024 Seohara Co-operative Cane Development Union Ltd. "