2019 (4) TMI 1514 - AT - Income Tax

Ex-party orders of the CIT(A) - appellant requesting adjournment time and again as he was waiting for the order of the MA, in ITAT order passed i.r.t s. 263 have the direct bearing over the issues involved - allowability thereof u/s. 40A(9), sec. 37(1), diversion of income by overriding title - HELD THAT - Since all the issues/the grounds raised, are the same and identical facts are involved in as much as the AO has repeated the additions/disallowances following the order u/s. 263 and/or the reassessment order passed by the then AO u/s. 143(3)/263 in A.Y 2012-13, hence the said order of the Hon ble ITAT 2018 (2) TMI 507 - ITAT JAIPUR shall be having a direct bearing over the present appeals. Hon ble ITAT has directed the AO to consider the claim of the assessee on merits as regards allowability thereof u/s. 40A(9), sec. 37(1), diversion of income by overriding title. I also found that recently the AO i.e ITO, Ward-1, Beawar, in there- assessment order passed u/s. 143(3) r/w/s 254 263 of the Act, pursuant to the direction of the Hon ble ITAT, has again repeated the disallowances. Since the facts and circumstances in all the other years under consideration are same, therefore, these are also restored back to the file of the CIT(A) with the same direction. The assessee is also directed to appear before the CIT(A) within a period of 60 days from the receipt of this tribunal order. - Appeals of assessee are allowed for statistical purpose.

Summary

Issues:
Appeals against CIT(A) orders for A.Ys. 2012-13, 2013-14, and 2014-15 under Income Tax Act, 1961.

Analysis:
1. The assessee, a cooperative society, filed appeals against the CIT(A) orders for the mentioned assessment years. The society's primary activities involve the purchase and sale of agricultural produce at government-fixed rates. The assessee claimed deductions under section 80P of the Act. During assessment, certain amounts were transferred to reserve and education funds, which were disallowed by the Assessing Officer (AO).

2. The CIT(A) dismissed the appeals ex-parte, leading to the assessee's contention that adjournment requests were sent on valid grounds, including pending ITAT orders. The absence of the assessee's representative was explained, highlighting the need for a fair hearing. The AR argued that no final notice or communication was received, emphasizing the violation of natural justice principles by the CIT(A).

3. The ITAT found the non-appearance of the assessee's representative before the CIT(A) justified. The controversy regarding disallowances first arose in A.Y 2012-13, leading to a revisionary order by the CIT, subsequently modified by the ITAT. The ITAT directed the AO to re-examine the deductions claimed by the assessee, emphasizing a fair opportunity for the same.

4. Considering the ITAT's directions in the assessee's own case, the ITAT set aside the ex-parte CIT(A) orders and remanded the matter for fresh consideration. The AO was instructed to review the assessee's claims on merits under relevant sections. The appeals were allowed for statistical purposes, and the matter was restored to the CIT(A) for a fair and thorough reevaluation.

In conclusion, the ITAT's judgment focused on ensuring the assessee's right to a fair hearing and proper consideration of claimed deductions under the Income Tax Act. The decision emphasized the importance of natural justice principles and directed the CIT(A) to reevaluate the matter in light of the ITAT's directives, providing the assessee with a genuine opportunity to present their case.