SHRI GAYATRI URBAN CO-OPERATIVE CREDIT SOCIETY LIMITED,BELAGAVI V. THE INCOME TAX OFFICER, WARD - 1, BELAGAVI

ITA 206/PAN/2024

AI Insights

The case involves Shri Gayatri Urban Co-operative Credit Society Limited, which appealed against the order of the Income Tax Officer, Ward-1, Belagavi, concerning the assessment year 2018-19. The primary issue was the denial of deduction under section 80P of the Income Tax Act, 1961, based on the interest income earned by the society, which was deemed not qualifying for deduction following the Supreme Court's decision in Totgar's Cooperative Sale Society Ltd. vs. ITO. The NFAC had earlier dismissed the appeal ex-parte for non-prosecution. The ITAT found that the NFAC had not provided a reasonable opportunity for the appellant to present its case, leading to the remand of the case for a fresh decision.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26273 (ITAT-PANAJI)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: WT(D)
• Next Hearing Date: 28-11-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 19-08-2024
• Other Referred Cases: Totgar Society Ltd. Vs. ITO (2010) 322 ITR 283, St. Paul’s Anglo Indian Education Society [2003, 262 ITR 377 (Pat)]
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: ASHWINIHOSMANI LD.
• Assessee Lawyers: VEERANNA MURGOD
• Keywords: Principle of natural justice

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH, PANAJI BEFORE HON’BLE SHRI PAVAN KUMAR GADALE, SHRI G. D. PADMAHSHALI Shri Gayatri Urban Co-operative Credit Society Limited, 626A, RayatGalliVadgaon, Belagavi – 590 005 PAN:AAPAS5051B Income Tax Officer, Ward-1, Belagavi Assessee by:Mr Veeranna Murgod Revenue by Date of conclusive Hearing: Date of Pronouncement : PER G. D. PADMAHSHALI The present appeal is filed by the assessee No. ITBA/NFAC/S/250/202 passed u/s.250 of the Income the National Faceless Appeal Centre [for short ‘NFAC’] which has arisen out of order of assessment passed u/s.143(3) r.w.s.143(3A) & 143(3B) by the L assessment year 2018-19 IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH, PANAJI PAVAN KUMAR GADALE, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI,ACCOUNTANT MEMBER ITA No.206/PAN/2024 Assessment Year :2018-19 operative Credit .......Appellant V/s ....... Respondent Appearances Veeranna Murgod [‘Ld. AR’] Revenue by :Dr.AshwiniHosmani [‘Ld. DR’] Date of conclusive Hearing:28/11/2024 Date of Pronouncement : 02/12/2024 ORDER G. D. PADMAHSHALI, AM; is filed by the assessee against the DIN & Order No. ITBA/NFAC/S/250/2024-25/1065692595(1) dt.18/06/2024 250 of the Income-tax Act, 1961 [for short ‘the Act’] by the National Faceless Appeal Centre [for short ‘NFAC’] which has arisen out of order of assessment passed u/s.143(3) r.w.s.143(3A) & 143(3B) by the Ld. NF e-AC, Delhi anent to 19 [for short ‘AY’] IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH, PANAJI JUDICIAL MEMBER ACCOUNTANT MEMBER against the DIN & Order 18/06/2024 tax Act, 1961 [for short ‘the Act’] by the National Faceless Appeal Centre [for short ‘NFAC’] which inturn has arisen out of order of assessment passed u/s.143(3) C, Delhi anent to 2. Briefly stated, the facts of the case are that the assessee is a Cooperative Society engaged in the business of providing credit facilities to its members. It declaring taxable income at N u/s.80P(2)(a)(i) of Rs. selected for scrutiny under CASS for limited scrutiny for verification of Deduction under Chapter VI Investments/advances/loans calling upon the assessee to furnish the relevant information. In reply, the assessee submitted its response. Based on the information furnished by the assessee, the judgment of Hon’ble Apex Court in the case of Totgar Society Ltd. Vs. ITO (20101) 322 ITR 283 income earned by the assessee does not qualify for deduction. Thus, the Ld.AO denied the deduction claimed by the assessee u/s.80P of the Act. 3. Aggrieved assessee agitated the aforestated assessment before the First Appellate Authority [for short dismissed the appeal Shri Gayatri Urban Coop. Briefly stated, the facts of the case are that the assessee is a engaged in the business of providing credit facilities to its members. It filed the return of income on 11/10/2018 declaring taxable income at Nil after claiming deduction Rs.29,77,735. Subsequently, the case was selected for scrutiny under CASS for limited scrutiny for verification of Deduction under Chapter VI-A of the Act Investments/advances/loans etc. Notices u/s.142(1) were issued calling upon the assessee to furnish the relevant information. In , the assessee submitted its response. Based on the information furnished by the assessee, the Ld.AO relying on the Hon’ble Apex Court in the case of Totgar’s Coop Sale Society Ltd. Vs. ITO (20101) 322 ITR 283 held that the interest income earned by the assessee does not qualify for deduction. Thus, AO denied the deduction claimed by the assessee u/s.80P Aggrieved assessee agitated the aforestated assessment before the First Appellate Authority [for short ‘FAA’]. The L dismissed the appeal exparte for non-prosecution Shri Gayatri Urban Coop. Credit Society Ltd. Vs. ITO ITA No.206/PAN/2024 Briefly stated, the facts of the case are that the assessee is a engaged in the business of providing credit filed the return of income on 11/10/2018 il after claiming deduction 29,77,735. Subsequently, the case was selected for scrutiny under CASS for limited scrutiny for verification A of the Act and 1) were issued calling upon the assessee to furnish the relevant information. In , the assessee submitted its response. Based on the AO relying on the ’s Coop Sale held that the interest income earned by the assessee does not qualify for deduction. Thus, AO denied the deduction claimed by the assessee u/s.80P(2) Aggrieved assessee agitated the aforestated assessment before The Ld. NFAC prosecution, without discussing merits of the issue. appeal before us. 4. Without touching the merits and grounds of appeal, we have heard the rival parties and subject to rule 18 of ITAT perused the material placed on record. passed by the First Appellate Proceedings, NFAC issued first notice on 21/02/2024fixing the date of hearing on 26/02/2024. No compliance was made by the notice. The Ld. NFAC issued second notice on 10/06/2024 fixing the date of hearing on 14/06/2024 to which also compliance by the assessee. From the above notices, it is conspicuous that the time allowed response is less than ‘reasonable period of fifteen days from natural justice. 5. In this context of reasonable period/opportunity, the Hon’ble High court of Patna judgement in Education Society’ [2003, 262 ITR 377 (Pat)]’ has categorically held that, an adjudication is unjustified if an assessee was deprived of reasonable opportunity and reasonable time to produce all relevant documents to substantiate claims made in the return of income. Shri Gayatri Urban Coop. discussing merits of the issue. Further aggrieved, the assessee Without touching the merits and grounds of appeal, we have heard the rival parties and subject to rule 18 of ITAT-Rules 1963 perused the material placed on record. On perusal of theorder First Appellate Proceedings, we find that the L NFAC issued first notice on 21/02/2024fixing the date of hearing on 2024. No compliance was made by the assessee to such d. NFAC issued second notice on 10/06/2024 fixing the date of hearing on 14/06/2024 to which also there was no compliance by the assessee. From the above notices, it is the time allowed for the assessee to file its reasonable period of fifteen days’ ,thus suffers In this context of reasonable period/opportunity, the Hon’ble High court of Patna judgement in ‘St. Paul’s Anglo Indian [2003, 262 ITR 377 (Pat)]’ has categorically held that, an adjudication is unjustified if an assessee was deprived of reasonable opportunity and reasonable time to produce all relevant documents to substantiate claims made in the return of income. Shri Gayatri Urban Coop. Credit Society Ltd. Vs. ITO ITA No.206/PAN/2024 urther aggrieved, the assessee is in Without touching the merits and grounds of appeal, we have Rules 1963 On perusal of theorder ind that the Ld. NFAC issued first notice on 21/02/2024fixing the date of hearing on assessee to such d. NFAC issued second notice on 10/06/2024 fixing there was no compliance by the assessee. From the above notices, it is for the assessee to file its thus suffers In this context of reasonable period/opportunity, the Hon’ble ‘St. Paul’s Anglo Indian [2003, 262 ITR 377 (Pat)]’ has categorically held that, an adjudication is unjustified if an assessee was deprived of reasonable opportunity and reasonable time to produce all relevant documents to substantiate claims made in the return of income. 6. The aforestated circumstances necessitate more reasonable opportunity to the appellant to comply with no and contest the appeal on merits which can only be possible on remand of this case to Ld. NFAC. In view thereof, without offering any comments on merits, we set remand it to the stage of direction deal therewith in terms of section 250(6) of the Act. 7. In result, the appeal In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this -S/d- PAVAN KUMAR GADALE JUDICIAL MEMBER 02nd December, 2024 Satish Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 4. PCIT Concerned 5. DR, ITAT, Panaji Bench, Panaji // True Copy // Shri Gayatri Urban Coop. The aforestated circumstances necessitated us to grant one more reasonable opportunity to the appellant to comply with no and contest the appeal on merits which can only be possible on to Ld. NFAC. In view thereof, without offering any comments on merits, we set-aside the impugned order and to the stage of its institution before Ld. NFAC w direction deal therewith de-novo and pass separate speaking order in terms of section 250(6) of the Act. Ordered accordingly. In result, the appeal is allowed for statistical purposes. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this 02nd day of December, 2024. -S/d- PAVAN KUMAR GADALE G. D. PADMAHSHALI ACCOUNTANT MEMBER Copy of the Order forwarded to : 2. The Respondent. 3. The CIT(A)/NFAC Concerned DR, ITAT, Panaji Bench, Panaji 6. Guard File Sr. Private Secretary / AR Shri Gayatri Urban Coop. Credit Society Ltd. Vs. ITO ITA No.206/PAN/2024 us to grant one more reasonable opportunity to the appellant to comply with notices and contest the appeal on merits which can only be possible on to Ld. NFAC. In view thereof, without offering aside the impugned order and institution before Ld. NFAC with a and pass separate speaking order Ordered accordingly. allowed for statistical purposes. , 2024. G. D. PADMAHSHALI ACCOUNTANT MEMBER CIT(A)/NFAC Concerned By Order, / AR ITAT, Panaji. "