ITAT Remands 80P Deduction Case to CIT(A), Directs Fresh Hearing for Co-op Society [Read Order]

The Income Tax Appellate Tribunal (ITAT) Panaji Bench has set aside the ex-parte order passed by the Commissioner of Income Tax (Appeals) and remanded the matter for fresh adjudication, directing a fresh hearing on the eligibility of deduction claimed under Section 80P by the co-operative society.

The appellant, Grameena Seva Sahakari Sangha Niyamita, a cooperative credit society located in Karnataka, filed its return of income for Assessment Year 2014-15, declaring a total income of Rs.97,420 after claiming deduction of Rs.27,55,833 under Section 80P of the Income Tax Act, 1961. The original assessment was completed under Section 143(3) allowing the deduction. Subsequently, the Assessing Officer reopened the assessment under Section 147 on the ground that the assessee was not eligible for deduction under Section 80P and passed the reassessment order denying the claim, assessing the income at Rs.28,53,250.

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The assessee filed an appeal before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. However, the CIT(A) dismissed the appeal ex-parte, observing that despite issuance of multiple notices of hearing, there was no response from the assessee. The CIT(A) proceeded to uphold the denial of the deduction based on the material available on record without considering any new submissions.

Challenging the dismissal, the assessee submitted before the Tribunal that it had a strong case on merits and sought an opportunity to present supporting evidence. It was contended that there could have been genuine reasons for non-compliance with notices and prayed for restoration of the matter to the CIT(A) for fresh consideration. The Revenue opposed the plea, supporting the order of the CIT(A).

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The Tribunal considered the submissions and noted that although sufficient opportunities were given by the CIT(A), the principles of natural justice required providing one more opportunity for a fair hearing. The Tribunal emphasized that non-appearance may happen due to various reasons and cannot, by itself, lead to dismissal without examining the merits. Referring to the principles laid down in Smt. Champaben Vinaychand Shah v. ITO [2015], it was observed that when substantial justice is at stake, a liberal approach is warranted.

The division bench comprising Pavan Kumar Gadale (Judicial Member) and G.D. Padmahshali, (Accountant Member) set aside the CIT(A)’s order and remitted the matter back for fresh adjudication after granting adequate opportunity to the assessee.

To Read the full text of the Order CLICK HERE

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