SIB Staff Credit Society Wins Appeal: ITAT Directs CIT(A) to Reconsider Deduction Claim u/s 80P [Read Order]

The Income Tax Appellate Tribunal (ITAT) Cochin Bench has ruled in favor of assessee by directing the Commissioner of Income Tax (Appeals) CIT(A) to reconsider the deduction claim under Section 80P of the Income Tax Act, 1961. The tribunal held that the CIT(A) should not have dismissed the appeal for non-prosecution without examining the case on its merits.

SIB Staff Credit Society Ltd. is a cooperative society registered under the Kerala State Cooperative Societies Act, 1969. It is engaged in accepting deposits and providing loans to its members. The society filed its income tax return for Assessment Year (AY) 2020-21 on December 9, 2020, declaring nil income after claiming a deduction of Rs.61,13,148(61.13 lakh) under Section 80P of the Income Tax Act, 1961.

The Income Tax Officer (ITO), Ward-2(1), Thrissur, completed the assessment on September 27, 2022, under Section 143(3) read with Section 144B of the Act. The AO denied the deduction under Section 80P, stating that the society failed to provide adequate evidence to support its claim. The society filed an appeal before the CIT(A), arguing that it was eligible for deduction under Section 80P(2)(a)(i). However, the CIT(A) dismissed the appeal ex-parte for non-prosecution without considering the claim on its merits.

Are You Filing Tax Appeals the Right Way? Learn the Proper Legal Procedures!, Click Here

ITAT observed that the CIT(A) dismissed the appeal solely due to non-prosecution without examining the case. The tribunal noted that under Section 250(6) of the Income Tax Act, 1961 CIT(A) must frame points of determination and discuss the case before passing an order. It held that even in an ex-parte disposal, the CIT(A) is required to analyze the case on its merits.

The tribunal referred to the Bombay High Court’s decision in PCIT vs. Premkumar Arjundas Luthra, which states that appellate authorities must examine cases substantively, even if the assessee is absent.

How to Audit Public Charitable Trusts under the Income Tax Act Click Here

ITAT Cochin Bench comprised of Inturi Rama Rao (Accountant Member) and Keshav Dubey (Judicial Member)  found that the CIT(A)’s dismissal was unjustified and directed the CIT(A) to reconsider the appeal on merits after providing the assessee with a reasonable opportunity to present its case.

In Conclusion, the ITAT Cochin Bench ruled in favor of SIB Staff Credit Society Ltd. and instructed the CIT(A) to review the deduction claim under Section 80P and issue a fresh order based on the merits of the case.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates