VISHWASRAO NAIK SAHAKARI KHARKHANA LTD,CHIKHALI V. DCIT CIRCLE , SANGLI

ITA 2724/PUN/2024

AI Insights

The case involves Vishwasrao Naik Sahakari Kharkhana Ltd., a cooperative society engaged in sugar manufacturing, which appealed against an order by the Ld. CIT(A)/NFAC for the assessment year 2014-15. The primary contention was the ex-parte nature of the previous hearings, attributed to the sudden demise of their consultant, Mr. M. K. Kulkarni, who had managed their tax matters. The Tribunal acknowledged the reasonable cause for the assessee's absence and decided to remand the case for a fresh hearing, emphasizing the need for adherence to procedural fairness and the principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361057 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND DESAI
• Assessee Lawyers: PRAMOD S. SHINGTE
• Keywords: Reasonable cause; Principle of natural justice
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2724/PUN/2024 िनधाŊरण वषŊ / Assessment Year : 2014-15 Vishwasrao Naik Sahakari Kharkhana Ltd., Gat. No.182/1, Yashwantnagar, Chikhali- 415408. PAN : AAAAV0215B Vs. DCIT, Circle, Sangli. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 25.09.2024 passed by Ld. CIT(A)/NFAC for the assessment year 2014-15. 2. The assessee has raised the following grounds of appeal :- “1. On the facts and the circumstances of the case and in law, lower authorities erred in passing ex-parte order and erred in deciding the issue only on the basis of material available with them, this action is being violative of principal of natural justice. Your appellant prays for granting opportunity of hearing before lower authorities. Assessee by : Shri Pramod S. Shingte Revenue by : Shri Arvind Desai Date of hearing : 25.03.2025 Date of pronouncement : 21.05.2025 ITA No.2724/PUN/2024 2 Without prejudice to the above grounds of appeal, following grounds are also taken on merit, 2. On the facts and in the circumstances of the case and in law lower authorities have erred in making an addition of Rs.55,06,298/- to the total income of sugar factory, by invoking provisions of section 37(1), by alleging that, sugarcane purchase price paid in the FY 2012-13 is over and above the fair and remunerative price (FRP) declared by Central Government, without appreciating the fact that appellant has fixed and declared the cane price, before the end of the FY 2012-13 and the provision for the purchase of sugarcane at said price has been made in the accounts, before the end of same FY, further the issue is also covered by Section36(1)(xvii) of the IT Act, in view of the same, your appellant prays for deletion of entire addition 3. On the facts and in the circumstances of the case and in law lower authorities have erred in making an addition of Rs.1,34,40,039/- on account of sale of sugar to the members at concessional rate, without appreciating the fact that the above- mentioned practice of selling sugar at concessional rate is a custom in the co-operative sugar industry in the state of Maharashtra. With an intention to induce the sugar cane producers to give all the sugar cane produced by him to the Sugar factory. Your appellant prays for deletion of entire addition Your appellant prays for deletion of entire addition Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice.” 3. Facts of the case, in brief, are that the assessee is an AOP co- operative society engaged in the business of manufacturing and sale of sugar and its by products and has furnished its return of income declaring total income at Rs.Nil. The case was selected under scrutiny and the assessment was completed u/s 143(3) of the IT Act on 21.11.2016 by determining income at Rs.1,89,46,337/- vide order dated 11.09.2017. Ld. CIT(A)/NFAC also upheld the ITA No.2724/PUN/2024 3 above assessment order. The assessee than preferred second appeal before the Tribunal and the matter was restored back to the Assessing Officer to decide the issue afresh. The assessment was completed u/s 143(3) r.w.s. 254 of the IT Act on 28.03.2023 by determining income at Rs.1,89,46,337/-. 4. Since assessee remained absent, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee. It is this order against which the assessee is in appeal before the Tribunal. 5. Ld. AR appearing from the side of the assessee submitted before us that the ex-parte order passed by Ld. CIT(A)/NFAC is unjustified. Ld. AR submitted before us that there was reasonable cause in not appearing before Ld. CIT(A)/NFAC. Ld. AR clarified that earlier Mr. M. K. Kulkarni was looking after the income tax matters and due to his sudden demise the dates of hearing provided by Ld. CIT(A)/NFAC remained unattended. Ld. AR contended before the Bench that the assessee was under impression that the matter is looked after by Mr. M. K. Kulkarni and his staff therefore he was fully dependent on his consultant and unfortunately the consultant died and due to this reason alone the appeal hearings remained unattended resulting in ex-parte order passed by Ld. ITA No.2724/PUN/2024 4 CIT(A)/NFAC. Accordingly, Ld. AR requested before the Bench to set-aside the ex-parte order passed by Ld. CIT(A)/NFAC and further requested to provide one more opportunity to the assessee to support the grounds of appeal before Ld. CIT(A)/NFAC. 6. Ld. DR appearing from the side of the Revenue supported the orders passed by subordinate authorities and requested to confirm the same. 7. We have heard Ld. counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. The solitary prayer made by the Counsel of the assessee before us is to provide one more opportunity to the assessee to appear before Ld. CIT(A)/NFAC so that he can substantiate the grounds of appeal since due to the sudden demise of the earlier counsel the case by the assessee could not be represented & which resulted in unfortunate ex-parte order by LD. CIT(A)/NFAC. Considering the totality of the facts of the case and in the interest of justice and without going into merits of the case, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC & remand the matter back to his file with a direction to decide the appeal afresh on merits of the case as per ITA No.2724/PUN/2024 5 fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard and produce documents/evidences in support of grounds of appeal without taking any adjournment under any pretext, otherwise Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal raised by the assessee are partly allowed. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on this 21st day of May, 2025. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 21st May, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "