UNNATI GOULI CREDIT CO - OP SOCIETY LIMITED,KIRWATTI V. THE INCOME TAX OFFICER, WARD - 1, SIRSI

ITA 192/PAN/2024

AI Insights

The case involves Unnati Gauli Credit Co-op. Society, which appealed against the orders of the NFAC concerning the assessment year 2017-18. The appeals were initially dismissed ex-parte by NFAC due to non-prosecution. The Tribunal noted that the notices issued by NFAC did not provide a reasonable period for the appellant to respond, particularly highlighting the impact of the COVID-19 pandemic on the first notice. The Tribunal emphasized the need for a fair and reasonable opportunity to be heard, referencing the Patna High Court's decision in 'St. Paul’s Anglo Indian Education Society'. Consequently, the Tribunal set aside the NFAC's orders and remanded the case for a fresh hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26310 (ITAT-PANAJI)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: WT(D)
• Next Hearing Date: 12-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 22-07-2024
• Other Referred Cases: St. Paul’s Anglo Indian Education Society [2003, 262 ITR 377 (Pat)]
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAZEERA MOHAMMAD LD.
• Keywords: Set aside; Sale consideration of property below Jantri Value; Principle of natural justice
• Section: 143(3); 250; 143(1); 192; 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH, PANAJI ITAT-Panaji Page 1 of 5 BEFORE HON’BLE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER ITA Nos. 192 & 193 /PAN/2024 Assessment Year : 2017-18 Unnati Gauli Credit Co-op. Society, 578, Kirwatti, Yellapur, Yellapur, Dist. Uttara Kannada PAN:AAAAU2350C . . . . . . . Appellant V/s Income Tax Officer, Ward-1, Sirsi. . . . . . . . Respondent Appearances Assessee by: None for the Assessee Revenue by : Ms Nazeera Mohammad [‘Ld. DR’] Date of conclusive Hearing : 12/11/2024 Date of Pronouncement : 13/11/2024 ORDER PER G. D. PADMAHSHALI, AM; These twin appeals of the assesse are respectively filed against DIN & Order No. ITBA/NFAC/S/250/2024-25/1065959590(1) & 1065958475(1) both dt. 24/11/2024 passed u/s 250 of the Income- tax Act, 1961 [for short ‘the Act’] by the National Faceless Appeal Centre [for short ‘NFAC’] which ascended out of separate assessment orders passed u/s 143(3) r.w.s. 263 and 143(3) of the Act respectively for assessment year 2017-18 [for short ‘AY’] Unnati Gauli Credit Co-op. Society Vs ITO ITA Nos.192 & 193/PAN/2024 ITAT-Panaji Page 2 of 5 2. These appeals were called twice separately; none appeared at the behest of the appellant, and there is no letter on record seeking adjournment by the appellant. Upon primary briefing from the respondent, we deem it fit to proceed the hearing ex-parte u/r 24 of ITAT Rules, 1963 and adjudicate the limited issue. Recording no objection of the respondent Revenue, we advanced accordingly. 3. Since facts involved in this bunch of appeals and issue dealt therein are common & identical, therefore on the request of Ld. DR these appeals for the sake of brevity & convenience are heard together for being disposed-off by this common & consolidated order. 4. Without touching merits of these cases & grounds of appeal, we have heard the Ld. Revenues’ common submission on limited issue of ex-parte dismissal by the Ld. NFAC and subject to rule 18 (supra) perused material placed on record. 5. We note that, the assessee is credit co-operative society in whose case an assessment u/s 143(3) of the Act for the AY 2017-18 was first completed vide order dt. 30/12/2019 whereby the total income of the assessee owning to disallowance of 80P(2)(a)(i) and addition u/s 68 of the Act was assessed at ₹60,96,210/- as against the NIL income returned by the assessee and processed u/s 143(1) of the Act. Unnati Gauli Credit Co-op. Society Vs ITO ITA Nos.192 & 193/PAN/2024 ITAT-Panaji Page 3 of 5 6. The Principle Commissioner of Income Tax [for short ‘Ld. PCIT’] invoking the provisions of section 263 of the Act by an order dt. 29/03/2022 set aside the aforestated order of assessment and directed the Ld. AO to re-frame the assessment de-novo. Pursuance thereto a fresh assessment order u/s 143(3) r.w.s. 263 of the Act was framed on 27/03/2023 whereby total income of the assessee owning to; (a) addition u/s 68 of the Act (b) denial of deduction claimed u/s 80P(2)(a)(i) of the Act and (c) variation of interest brought to tax, was finally determined & assessed at ₹1,19,86,562/-. 7. Aggrieved assessee by separate appeals challenged former both the orders before Ld. NFAC, which came to be dismissed ex-parte for non-prosecution. Further aggrieved, the assessee came in present twin appeals with elaborative common grounds. 8. Without touching merits & grounds, we noted that, during the course of first appellate proceedings the Ld. NFAC issued three separate notices dt 31/12/2020, 20/02/2024 & 14/05/2024 fixing the hearing on 06/01/2021, 27/02/2024 & 29/05/2024 respectively. In the event of failure to on the part of assessee to respond to these notices, the appeals were dismissed by the Ld. NFAC ex-parte on the basis of material available on record. Unnati Gauli Credit Co-op. Society Vs ITO ITA Nos.192 & 193/PAN/2024 ITAT-Panaji Page 4 of 5 9. The former first two hearings were scheduled allowing less than reasonable period to comply is apparently capable of suggesting that, these were meant to accord no real opportunity but to create a paper trail to showcase adherence to natural justice. 10. It shall be worthy to underline that the opportunity of being heard should be real, reasonable and effective and same should not be empty or paper formalities, it should not be a paper opportunity. It is a settled & accepted principle that, any opportunity granted with a period less than a period of fifteen clear days falls out from ‘reasonable period’, thus from sufficiency of reasonable opportunity. 11. In this context of reasonable period/opportunity, the Hon’ble High court of Patna judgement in ‘St. Paul’s Anglo Indian 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. 12. In the present twin appeals, only by notice dt. 14/05/2024 the appellant was granted a single & effective opportunity as the first notice dt. 31/12/202 was issued during the subsistence of COVID-19 pandemic which owning the nationwide lock-down/restriction made Unnati Gauli Credit Co-op. Society Vs ITO ITA Nos.192 & 193/PAN/2024 ITAT-Panaji Page 5 of 5 impracticable for appellant to attend. On the other hand the second notice dt. 20/02/2024 was accorded much less than a reasonable period of fifteen clear days to comply. In summation, the appellant was deprived of reasonable opportunity and reasonable time to produce all relevant documents/evidence in support of grounds of appeals raised, therefore both the first appellate proceedings have suffered from principle of natural justice, hence cannot be continued to stand. The aforestated circumstances necessitates us to grant one more reasonable opportunity to the appellant to comply with notices and contest both the appeals on merits which can only be possible on remand of these cases to Ld. NFAC. In view thereof, without offering any comments on merits, we set-aside both these impugned orders and remand them to the stage of their institution before Ld. NFAC with a direction deal therewith de-novo and pass separate speaking orders in terms of section 250(6) of the Act. 13. In result, both these appeals are allowed for statistical purposes. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on date mentioned herein before. -S/d- -S/d- PAVAN KUMAR GADALE G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER Panaji/Dt: 13th day of November, 2024. Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The CIT(A)/NFAC Concerned 4. PCIT Concerned 5. DR, ITAT, Panaji Bench, Panaji 6. Guard File By Order, Sr. Private Secretary / AR ITAT, Panaji. "