Income Tax Appellate Tribunal - Raipur
Jila Sahakari Kendriya Bank Maryadit ... vs Dy. Commissioner Of Income Tax, Circle - ... on 4 May, 2026
आयकर अपील य अ धकरण यायपीठ रायपुर म।
IN THE INCOME TAX APPELLATE TRIBUNAL,
RAIPUR BENCH, RAIPUR
BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER
AND
SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER
आयकर अपील सं. / ITA Nos.172, 173, 174 & 175/RPR/2026
नधारण वष / Assessment Years : 2013-14, 2014-15, 2016-17 & 2017-18
Jila Sahakari Kendriya Bank Maryadit Bilaspur
Sahakar Building, Nehru Chowk,
Bilaspur (C.G.)-495 001
PAN: AAAAJ0607P
........अपीलाथ / Appellant
बनाम / V/s.
The Deputy Commissioner of Income Tax,
Circle-1(1), Bilaspur (C.G.)
...... यथ / Respondent
Assessee by : None (Petition filed)
Revenue by : Shri C.H.Rajeswara Reddy, Sr. DR
सुनवाई क तार ख / Date of Hearing : 04.05.2026
घोषणा क तार ख / Date of Pronouncement : 04.05.2026
2
Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.)
ITA Nos.172, 173, 174 & 175/RPR/2026
आदे श / ORDER
PER PARTHA SARATHI CHAUDHURY, JM:
The captioned appeals preferred by the assessee emanates from the respective orders of the Ld.CIT(Appeals)/NFAC, Delhi dated 04.12.2025 for the assessment years 2013-14, 2014-15, 2016-17 & 2017- 18 as per the grounds of appeal on record.
2. At the time of hearing, none appeared for the assessee. However, an adjournment petition has been filed which is rejected. The matters were heard after recording the submissions of the Ld. Sr. DR and on a careful perusal of the materials available on record.
3. We shall first take up the appeal filed by the assessee in ITA No.172/RPR/2026 for A.Y.2013-14 for adjudication wherein as per Ground of appeal No.3, the assessee has assailed as follows:
"3. Ground No. III On the facts and circumstances of the case as well as in law, the Ld. CIT(A) has grievously erred in affirming the action of the Ld. AO in making an addition of Rs.20,04,753/- invoki9ng the provisions of Section 36(1)(va) r.w.s. 43B of the Act on account of delayed deposit of employee's contribution to Employees Provident Fund (EPF) beyond the due dates under the respective Acts however, deposited well before the due date prescribed for filing of return of income under Section 139(1) of the Act. Hence, it is earnestly prayed that the disallowance of Rs.20,04,753/- may please be deleted."3
Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026
4. The relevant facts in this case are that the A.O had made addition on account of delayed deposit of employee's contribution towards Employee's Provident Fund (EPF) beyond the due dates under the respective Acts amounting to Rs.20,04,753/- u/s.36(1)(va) r.w.s.43B of the Income Tax Act, 1961 (for short 'the Act').
5. In this regard, the Ld. CIT(Appeals)/NFAC placing reliance on the judgment of the Hon'ble Apex Court in the case of Checkmate Services (P) Ltd. Vs. CIT (2022) 143 taxman.com 178 (SC) has held and observed as follows:
"8.(i). I have examined the assessment order and rival contentions on the disallowance made in respect of employees' contribution to EPF deposited beyond the due dates under the respective welfare statutes. Statutorily, section 2(24)(x) treats employees' contributions received by the employer as income; a deduction is permitted by section 36(1)(va) only if such sums are credited to the employees' accounts in the relevant fund on or before the due date under the said statutes. Section 43B, on the other hand, regulates deduction of, inter alia, employer's contribution on actual- payment basis up to the due date of filing of return under section 139(1). The provisions operate in distinct spheres. The Supreme Court in Checkmate Services (P) Ltd. v. CIT has conclusively held that section 43B does not govern employees' contribution under section 36(1)(va) and cannot extend the statutory due date; amounts paid beyond the due dates under the relevant Acts are not deductible, even if paid before the return-filing due date. The Court also noted the Finance Act, 2021 insertions; Explanation 2 to section 36(1)(va) and Explanation 5 to section 43B which clarify this position. Earlier decisions that applied Alom Extrusions to employees' contributions cannot survive in view of the Supreme Court's ratio; Alom Extrusions concerned employer's contribution under section 43B and was confined thereto.
(ii). In light of the binding pronouncement in Checkmate Services, I hold that employees' contribution deposited after 4 Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 the due dates under the EPF enactments is not allowable under section 36(1)(va). Accordingly, the disallowance in respect of employees' contribution to the extent of Rs.20,04,753/- is confirmed for violation of Section 36(1)(va).
The relevant ground is therefore dismissed."
6. We observe that the Hon'ble Apex Court has held that the employee's contributions if not deposited in respective accounts of PF & ESIC etc. within the due date prescribed in the respective statutes, in such scenario, the said amount deposited at later dates amounts to deemed income in the hands of the employer. That on similar facts and circumstances, ITAT, Division Bench, Pune in the case of Kohinoor Developments Corporation, Vs. The Asstt. Director of Income-tax, CPC, Bengaluru, ITA Nos.718 & 719/PUN/2021: A.Y. 2018-19 & 2019-20, dated 07.11.2022 has dealt with the aforesaid issue in a detailed manner in favour of the Revenue against the assessee observing as follows:
"4. The only issue involved in both these appeals is the disallowance of employees' contribution to Provident Fund as well as ESIC. It is the case of the assessee that as per various decisions of Pune Tribunal it has been held that if the employees' contribution to provident fund is paid before the due date of filing of return of income, then it is deductible as per provisions of section 43B of the Income-tax Act, 1961 (hereinafter referred to as "the Act") and the amendment made by the Finance Act, 2021 inserting Explanation 2 to section 43B is applicable prospectively i.e. from A.Y. 2021-22. Admittedly, in both the cases before us, the payment of impugned employee's' contribution to provident fund was before the due date of filing of return of income u/s 139(1) of the Act.
5. In the recent past, it has been held by various Benches of the ITAT that if the assessee has not deposited employees' contribution of E.P.F, ESI, etc. within due date prescribed 5 Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 under the respective statutes but paid before due date of filing the return of income under the provisions of section 139(1) of the Act, in such case, the A.O was directed to delete additions made under section 36(1)(va) of the Act from the hands of the assessee. Pune Tribunal have passed orders in favour of the assessees relying on Hon'ble Jurisdictional High Court in the case of CIT Vs. Ghatge Patil Transports Ltd. 368 ITR 769 (Bom) which followed the decision of Hon'ble Himachal Pradesh High Court in the case of CIT Vs. Nipso Polyfabrics Ltd. (2013) 350 ITR 327 (HP). In the legal jurisprudence interpreting the provisions of sec. 30(1)(va) and section 43B of the Act, there has been a division of opinion on the issue where the Hon'ble High Courts of Bombay, Himachal Pradesh, Calcutta, Gauhati and Delhi have interpreted the provisions beneficial to the assessee while the Hon'ble High Courts of Kerala and Gujarat have interpreted the provisions in favour of the Revenue. These difference of views were noticed by the Hon'ble Supreme Court because of which it had allowed Special Leave to Appeal in a group of matters taking the lead case in the matter of Checkmate Services P. Ltd. Vs. CIT-1 (Civil Appeal No. 2833 of 2016 and others). In all these appeals, the common question involved is with respect to the interpretation of section 36(1)(va) and section 43B of the Act and whether the appellant-assessees were entitled to deduction of amounts deposited by them towards employees' contribution in terms of EPF Act, EPF Scheme, ESI Act, ESI Regulations or any other provident fund or superannuation funds. In the year under consideration, the A.O has ruled that the appellant-assessee has belatedly deposited the employees' contribution towards the EPF and ESI considering the due date under the relevant Acts and Regulations. Secondly, the A.O ruled by virtue of section 30(1)(va) read with section 2(24)(x) of the Act that such amounts received by the appellant-assessee constitute "income". Those amounts could not have been allowed as deduction u/s 36(1)(va) of the Act when the payment was made beyond the relevant due date under the respective Statutes. In other words, as per the A.O as such amounts were paid beyond the due date as prescribed under the respective Acts the right to claim such amounts as allowable deduction while computing the income was lost for ever. The assessee's plea was unsuccessful before the I.T.A.T. and ultimately the Hon'ble Gujarat High Court also rejected the plea of the assessee. As noticed earlier, on this issue since there was a division of opinion amongst various Hon'ble High Courts, therefore, Hon'ble Supreme Court granted Special 6 Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 Leave to Appeal in all these cases. It was observed and held by the Hon'ble Supreme Court as follows:
"51. The analysis of the various judgments cited on behalf of the assessee i.e., Commissioner of Income-Tax v. Aimil Ltd.; Commissioner of Income-Tax and another v. Sabari Enterprises; Commissioner of Income Tax v. Pamwi Tissues Ltd.; Commissioner of Income-Tax, Udaipur v. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. and Nipso Polyfabriks (supra) would reveal that in all these cases, the High Courts principally relied upon omission of second proviso to Section 43B (b). No doubt, many of these decisions also dealt with Section 36(va)with its explanation. However, the primary consideration in all the judgments, cited by the assessee, was that they adopted the approach indicated in the ruling n Alom Extrusions. As noticed previously, Alom Extrusions did not consider the fact of the introduction of Section 2(24)(x) or in fact the other provisions of the Act.
52. When Parliament introduced Section 43B, what was on the statute book, was only employer's contribution (Section 34(1)(iv)). At that point in time, there was no question of employee's contribution being considered as part of the employer's earning. On the application of the original principles of law it could have been treated only as receipts not amounting to income. When Parliament introduced the amendments in 1988-89, inserting Section 36(1)(va) and simultaneously inserting the second proviso of Section 43B, its intention was not to treat the disparate nature of the amounts, similarly. As discussed previously, the memorandum introducing the Finance Bill clearly stated that the provisions especially second proviso to Section 43B - was introduced to ensure timely payments were made by the employer to the concerned fund (EPF, ESI, etc.) and avoid the mischief of employers retaining amounts for long periods.
That Parliament intended to retain the separate character of these two amounts, is evident from the use of different language. Section 2(24)(x) too, deems amount received from the employees (whether the amount is received from the employee or by way of deduction authorized by the statute) as income - it is the character of the amount that is important, i.e., not income earned. Thus, amounts retain by the employer from out of the employee's income by way of deduction etc were treated as income in the hands of the employer. The significance of this provision is that on the one hand it brought into the fold of "income" amounts that were receipts or deductions from employees income; at the time, payment within the prescribed time - by way of contribution 7 Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 of the employees' share to their credit with the relevant fund is to be treated as deduction (Section 36(1)(va)).The other important feature is that this distinction between the employers 'contribution (Section 36(1)(iv)) and employees' contribution required to be deposited by the employer (Section 36(1)(va)) was maintained - and continues to be maintained. On the other hand, Section 43B covers all deductions that are permissible as expenditures, or out- goings forming part of the assessee's liability. These include liabilities such as tax liability, cess duties etc. or interest liability having regard to the terms of the contract. Thus, timely payment of these alone entitle an assessee to the benefit of deduction from the total income. The essential objective of Section 43B is to ensure that if assessees are following the mercantile method of accounting, nevertheless, the deduction of such liabilities, based only on book entries, would not be given. To pass muster, actual payments were a necessary pre-condition for allowing the expenditure.
53. The distinction between an employer's contribution which is its primary liability under law - in terms of Section 36(1)(iv), and its liability to deposit amounts received by it or deducted by it (Section 36(1)(va)) is, thus crucial. The former forms part of the employers' income, and the later retains its character as an income (albeit deemed), by virtue of Section 2(24)(x) - unless the conditions spelt by Explanation to Section 36(1)(va) are satisfied i.e., depositing such amount received or deducted from the employee on or before the due date. In other words, there is a marked distinction between the nature and character of the two amounts - the employer's liability is to be paid out of its income whereas the second is deemed an income, by definition, since it is the deduction from the employees' income and held in trust by the employer. This marked distinction has to be borne while interpreting the obligation of every assessee under Section 43B.
54. In the opinion of this Court, the reasoning in the impugned judgment that the non-obstante clause would not in any manner dilute or override the employer's obligation to deposit the amounts retained by it or deducted by it from the employee's income, unless the condition that it is deposited on or before the due date, is correct and justified. The non- obstante clause has to be understood in the context of the entire provision of Section 43B which is to ensure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of 8 Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 these liabilities, what constitutes the due date is defined by the statute. Nevertheless, the assessees are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees' contributions- which are deducted from their income. They are not part of the assessee employer's income, nor are they heads of deduction per se in the form of statutory pay out. They are others' income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law. They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts are deposited on or before the due date. If such interpretation were to be adopted, the nonobstante clause under Section 43B or anything contained in that provision would not absolve the assessee from its liability to deposit the employee's contribution on or before the due date as a condition for deduction.
55. In the light of the above reasoning, this court is of the opinion that there is no infirmity in the approach of the impugned judgment. The decisions of the other High Courts, holding to the contrary, do not lay down the correct law. For these reasons, this court does not find any reason to interfere with the impugned judgment. The appeals are accordingly dismissed."
6. In the aforesaid judgment, the Hon'ble Supreme Court has analysed the legal essence of the welfare legislations such as ESI, EPF, etc. which are primarily for the benefit of the employees. The employees' hard earned money are contributed to these funds whereby their contributions are given to the employers to be deposited as per these enactments. When the money is given by the employees, the employer is holding that money on behalf of the employees in the manner of good faith and trust. They are not part of the employers' income, nor are they heads of deduction per se in the form of statutory pay out. In fact, they are others income, money, only deemed to be income with the object of ensuring that they are paid within the due date specified in that particular statute. Therefore, they have to be deposited in terms of such welfare enactment. It is open to deposit in terms of those statutes on or before the due date as 9 Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 mandated by such concerned law that the amount which is otherwise retained and is deemed income in the hands of the employer is therefore, treated as a deduction. Essentially the condition precedent for deduction is that therefore, such amounts which are held in trust for the employees should be deposited by the employer on or before the due date as prescribed under the relevant Statutes. The Hon'ble Supreme Court further held that if this approach and reasoning is adopted then the non-obstante clause u/s 43B or anything contained in that provision would never absolve the assessee employer from its liability to deposit employees' contribution on or before the due date as mentioned in the respective enactments as a condition for deduction. In view thereof, the Hon'ble Apex Court upheld the findings of Hon'ble Gujarat High Court and also stated that the decisions of other Hon'ble High Courts holding to the contrary do not lay down the correct proposition of law.
7. Reverting to the facts of the present case, it is an admitted fact that the payment of employees' contribution to the provident fund was made before the due date of filing of return of income u/s 139(1) of the Act but beyond the due date as provided in the respective Statutes. 8. Respectfully following the judgment of Hon'ble Supreme Court (supra) we hold that the assessee-employer was duty bound to deposit the employees' contribution to provident fund within the due date as mentioned in the respective Statutes. Since this was not done the assessee is not entitled for deduction u/s 36(1)(va) read with section 43B of the Act and the said amount has to be construed as deemed income of the assessee and added to his total income. We do not find therefore, any infirmity with the findings of the Revenue authorities and both the appeals of the assessee are dismissed."
7. Respectfully following the aforesaid judicial pronouncements, we do not finding any infirmity with the findings of the Ld. CIT(Appeals) which is therefore, sustained.
8. As per above terms, appeal of the assessee in ITA No. 172/RPR/2026 for A.Y.2013-14 is dismissed.
10Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 ITA Nos.173, 174 & 175/RPR/2026 A.Ys. 2014-15, 2016-17 & 2017-18
9. Now, we shall take the appeals filed by the assessee in ITA Nos.173, 174 & 175/RPR/2026 for A.Ys. 2014-15, 2016-17 & 2017-18.
10. At the very outset, it is noted that an ex-parte order has been passed by the Ld.CIT(Appeals)/NFAC vide para 5 of the impugned order due to non-compliance by the assessee. There is no doubt of the fact that reasonable opportunities were provided to the assessee. However, the assessee did not comply with the hearing notices which had resulted in passing of ex-parte order. For the sake of clarity, the para 5 of the Ld.CIT(Appeals)/NFAC (ITA No.173/RPR/2026 for A.Y.2014-15) order is extracted as follows:
"5. Subsequent to the orders of the Hon'ble Tribunal, following notices have been issued on dates 01.04.2015, 21.05.2025, 03.07.2025, 11.08.2025, 18.09.2025,
11.11.2025 and 20.11.2025. A submission defending ground No.3 has been placed by the appellant along with certain case laws which are part of records. Vide request raised on the Portal on 22.09.2025, the appellant requested to adjourn the date for one month. Accordingly, the case was adjourned twice on 11.11.2025 and on 20.11.2025. The final opportunity was granted for 03.12.2025. Since the case is around 8 years old and sufficient opportunities have already been granted therefore, I am of the considered opinion that this is not a fit case for any further opportunities and accordingly, it would be fair and appropriate to proceed on merits in respectful compliance of the order of the Hon'ble ITAT."
11Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 In so far as appeals of the assessee in ITA Nos.174 & 175/RPR/2026 for A.Ys.2016-17 & 2017-18 are concerned, it is noted that as per Para- 4.1 of the impugned orders, the Ld.CIT(Appeals)/NFAC vide an ex-parte order had dismissed the appeal of the assessee due to non-compliance by the assessee. The same are only being referred to and not extracted for the sake of brevity.
11. The Ld. Sr. DR submitted that in these parameters of an ex-parte order being passed, the bench had provided one final opportunity to the assessee to explain the matter on merits before the Ld. CIT(Appeals)/NFAC providing benefit of doubt to the assessee for such non-compliance and in the interest of natural justice, therefore, the matters should be remanded back to the file of the Ld. CIT(Appeals)/NFAC for denovo adjudication as per law in terms with settled principles on the present facts of ex-parte order by the Ld. CIT(Appeals)/NFAC as decided by ITAT, "Division Bench", Raipur in the cases of Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur, IT(SS)A Nos. 1 to 6, 8 & 9/RPR/2025, dated 20.03.2025.
12. At this stage, we herein observe that the ITAT, "Division Bench", Raipur in the cases of Collector Mining, Kondagaon Vs. Deputy Commissioner of Income Tax (TDS), ITA Nos. 771, 772, 773, 774, 775, 776 & 777/RPR/2025, dated 12.03.2026 had dealt with similar issue on 12 Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 the same parameters of ex-parte order passed by the Ld. CIT(Appeals)/NFAC and remanded the matter back to the file of the Ld. CIT(Appeals)/NFAC following the order passed in cases of Brajesh Singh Bhadoria (supra), observing as follows:
"6. We have heard the submissions of the parties herein and analyzed the facts and circumstances in this case. We note that in all these appeals, an ex-parte order has been passed by the First Appellate Authority due to non- compliance by the assessee. The proceedings before the Ld. CIT(Appeals)/NFAC dates back from 27.01.2021 to 28.10.2025 i.e. nearly 4 years (approx.). Admittedly, reasonable opportunities were provided to the assessee. However, there was no compliance from the assessee on any date of hearing. Further, the Ld. Counsel for the assessee simply submitted that the assessee is a government entity and the facts and issues are squarely covered by the decision of the Hon'ble Apex Court, therefore, non-compliance by the assessee before the Ld. CIT(Appeals)/NFAC does not matter. The Act is very clear about the fact of adjudication by the First Appellate Authority through which such orders should be passed in terms with Section 250(4) & (6) of the Act. Meaning thereby, there must be adjudication on merits by the First Appellate Authority on the entire subject matter. Suppose, if there is no compliance by the assessee nor any evidence have been filed in such case, the First Appellate Authority does not have any option but to pass an ex-parte order. In such scenario, considering the principles of natural justice and the fact that tax payer assessee should be provided benefit of doubt the ITAT, "Division Bench", Raipur in the cases of Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur (supra) had provided one final opportunity to the assessee to represent the matter on merits before the First Appellate Authority. In the said decision (supra), therein also it was submitted by the Ld. Counsel that the legal issue should be decided by the Tribunal. However, it was held therein that the Tribunal is a statutory authority and emanates from the Act itself and it is therefore not a constitutional authority so to allow any usurp of power of another statutory authority i.e. the Ld. CIT(Appeals)/NFAC.13
Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026
7. In other words, as per the intent of the legislature the First Appellate Authority has to pass order in terms with Section 250(4) & (6) of the Act and thereafter, the matter if appealed before the Tribunal it would look into the correctness of the decision by the sub-ordinate authorities, whether the law has been correctly applied to the facts of the case while determining the substantive rights and liabilities of the parties. There cannot be any short cut route allowed to the assessee for assailing any legal ground or saying that the matter is squarely covered by the judgment of the Hon'ble Apex Court and get relief from Tribunal even without bothering to comply with the hearing notices before the First Appellate authority. If such practice is allowed, the entire intention of the legislature and the process of adjudication before the Ld. CIT(Appeals)/NFAC as per the Act will get defeated and as a statutory body, the Tribunal cannot travel beyond the intent of the fiscal statute. The Act is very clear that there has to be compliance by the assessee before the Ld. CIT(Appeals)/NFAC and he must pass orders in terms with Section 250(4) and (6) of the Act and thereafter, the matter if appealed before the Tribunal, it has to be decided on the issues as per law and facts. Since in the present case as discernable from record there was no compliance by the assessee before the First Appellate Authority, we, therefore, refer to our decision in the cases of Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur (supra) wherein the same parameters were examined and held that in case of an ex-parte order being passed by the Ld. CIT(Appeals)/NFAC due to non-compliance by the assessee, the matter has to be restored back to the file of Ld. CIT(Appeals)/NFAC and it was not open for the Tribunal to address any issue in absence of any substantive order as per Section 250(4) & (6) of the Act by the Ld. CIT(Appeals)/NFAC which in fact is in the best interest of balancing the scales of justice. The relevant paras are as follows:
"7. We have considered the submissions of the parties herein and analyzed the facts and circumstances involved in all the captioned appeals. After careful perusal of the documents on record, we find that the assessee had assailed the legal ground as aforestated, however, the fact of the matter is that on perusal of the respective orders of the Ld. CIT(Appeals) for all the years before us, it is also evident from Para 3 that there has been no compliance by the assessee before the said authority and as such, an ex-parte order was passed for the concerned years in appeal. Admittedly, as per record, sufficient opportunities had been provided to the 14 Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 assesse, however, there was no compliance by the assessee. In effect, rights and liabilities of the parties herein are yet to be adjudicated substantially at the level of the first appellate authority. Though in the impugned orders, discussion has been done as per material available on record by the Ld.CIT(Appeals) but they are only Form 35, statement of facts, grounds of appeal and the assessment order. However, due to non-compliance by the assessee, there are no submissions, evidence and documents submitted for adjudication by the assessee before the Ld. CIT(Appeals). That as per Para 3 of the Ld. CIT(Appeals) order, there has been no compliance on the part of the assessee for submitting detailed explanations regarding the grounds of appeal for the years under consideration which clearly shows that the grounds of appeal raised before the first appellate authority has not been substantiated on merits through corroborative evidence /submissions.
8. That in such scenario we are of the considered view that the Income tax Act is within the ambit of welfare legislation which are completely different from that of the penal legislation, therefore, benefit of doubt whenever arises, it has to be interpreted in favour of the assessee tax payer within the parameters of law and facts. There may be circumstances beyond control of the assessee because of which, the assessee may not have been able to represent his case on the given dates of hearing before the Ld. CIT(Appeals). Though it is correct that there was no compliance from the side of the assessee, however, nothing is there on record which suggests any deliberate non-compliance or malafide conduct of the assessee. That further, if one final opportunity is provided to the assessee to represent his case before the first appellate authority, the position of the revenue will also not be jeopardized.
9. Recently, the Hon'ble High Court of Bombay in the case of Vijay Shrinivasrao Kulkarni Vs. Income-tax Appellate Tribunal (2025) 171 taxmann.com 696 (Bom.), dated 04.02.2025 observed that in the case the Assessing Officer had passed an ex-parte order and when the matter went on appeal before the Ld. CIT(Appeals)/NFAC, it had also dismissed the matter ex-parte due to non-compliance by the assessee's authorized representative, when the matter came up before the ITAT, it had failed to address the infirmity regarding the fact that the assessee was not afforded proper opportunity of being heard and the matter was dismissed ex- parte by the Ld. CIT(Appeals)/NFAC which amounted to 15 Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 violation of principles of natural justice, and instead ITAT decided the case on merits, in such circumstances, the Hon'ble High Court of Bombay held that passing of an order on merits by the ITAT even when the impugned order was passed ex-parte amounts to violation of principles of natural justice and accordingly, the said matter was remanded to ITAT for passing a fresh order in accordance with law after hearing the parties. The legal principle as enshrined in the present judgment is crystal clear that the principles of natural justice i.e. the right to be heard is to be provided and accordingly, the matter had to be substantially adjudicated by the appellate authority. Therefore, if the impugned order of the Ld. CIT(Appeals)/NFAC is an ex-parte order, the only recourse in conformity with the aforesaid judicial pronouncement is to remand the matter back to the file of the Ld. CIT(Appeals)/NFAC for fresh adjudication in terms with the principles of natural justice providing one final opportunity to the assessee.
10. In the aforesaid case, the Hon'ble High Court of Bombay had referred to a judgment of the Hon'ble Supreme Court in the case of Delhi Transport Corporation vs. DTC Mazdoor Union AIR 1999 SC 564, wherein the Supreme Court inter-alia held that Article 14 guarantees a right of hearing to a person who is adversely affected by an administrative order. The principle of audi-alteram partem is a part of Article 14 of the Constitution of India. In light of such decision, the petitioner ought to have been granted an opportunity of being heard which, partakes the characteristic of the fundamental right under Article 14 of the Constitution of India.
11. The Hon'ble High Court of Bombay in the aforesaid case had referred to a decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax Madras v. Chenniyappa Mudiliar 1969 1 SCC 591, wherein the Supreme Court in interpreting the section 33(4) of the Income Tax Act, 1922 has held that the appellate tribunal was bound to give a proper decision on question of fact as well as law, which can only be done if the appeal is disposed off on merits and not dismissed owing to the absence of the appellant. Reverting to the facts of the present case the grounds of appeal were simply filed before the Ld.CIT(Appeals) they were not substantiated or corroborated through submissions and filing of documentary evidences since the assessee had not complied before the Ld.CIT(Appeals) on the dates of hearing. Therefore, as per framework of the Act there must be 16 Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 adjudication on merits by the first appellate authority and one final opportunity be provided to the assessee to represent his matter on merits in the interest of natural justice.
12. There may even be a situation where the Ld. Counsel for the assessee may assail a legal ground before the Tribunal following the decision of the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC) with a contention that irrespective of the order of the Ld. CIT(Appeals) being ex-parte, the Tribunal may decide the legal issue that has been raised by the Ld. Counsel. In our view, the decision of the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (supra) provides that any legal issue which goes to the root of the matter and is established through legal principles, the assessee can take up and raise such legal issue at any appellate forum irrespective of whether the assessee had raised such legal issue at the sub-
ordinate level or not, however, it always depends on facts and circumstances of each case whether the Tribunal would decide the legal ground or in a case where the question is of natural justice and ex-parte order by the Ld. CIT(Appeals) the Tribunal would remand it back to Ld.CIT(Appeals) providing final opportunity to a bonafide assessee. The Tribunal as the highest fact finding authority must be certain enough that the impugned order before it has been passed on merits and is a speaking order where the assessee has also complied during the process of litigation. In case, where the order of the Ld. CIT(Appeals) itself is ex-parte and some legal ground is raised and if the Tribunal decides such legal ground where in fact principles of natural justice is left unanswered due to the fact that the impugned order before the Tribunal is ex- parte and there was no compliance by the assessee in such scenario the Tribunal would also be usurping the power of the Ld. CIT(Appeals) which is also a statutory authority as per the Act. This is due to the reason that as per framework of the Act, Ld.CIT(Appeals) is the first appellate authority where an appeal by assessee it would be substantially decided through a speaking order by the Ld.CIT(Appeals). When this part is over and either party is aggrieved second appeal lies before the ITAT. Now if for every ex-parte order passed by the Ld. CIT(Appeals), of course due to non-compliance by the assessee, if the Tribunal adjudicates a legal ground, for instance validity of assessment or reassessment order and answers it in favour of the assessee then it would create an easy route for assessee getting redressal from Tribunal even without bothering to comply with hearing notices before the 17 Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 Ld. CIT(Appeals). This would dismantle the structure of the Act which is definitely not the intention of the legislature. Here in this situation, where the benefit of doubt is given to the assessee since he had not complied with the hearing notices before the Ld. CIT(Appeals) which resulted in passing of an ex-parte order by the Ld. CIT(Appeals), in such scenario, as per the scheme of the Act and following the principles of natural justice, the only course of action is to remand the matter back to the file of the Ld. CIT(Appeals) for adjudication on merits providing one final opportunity to the assessee.
13. In view thereof, we set aside the respective orders of the Ld. CIT(Appeals) for all the years and remand the same to their file for denovo adjudication on merits. At the same time, we direct the assessee that this being the final opportunity, there must be compliance on merits before the first appellate authority. Needless to say, the Ld. CIT(Appeals) shall provide reasonable opportunity of being heard to the assessee and pass an order in terms of Section 250(4) and (6) of the Act within three months from receipt of this order."
8. Respectfully following the aforesaid order, on the same parity of reasoning and as per rule of consistency, we set- aside the respective orders of the Ld. CIT(Appeals)/NFAC and remand the matters back to its file for denovo adjudication while complying with the principles of natural justice. At the same time, it is directed that this being the final opportunity, the assessee shall duly comply with the hearing notices from the Ld.CIT(Appeals)/NFAC and represent the matters on merits. The Ld.CIT(Appeal)/NFAC shall consider the submissions of the assessee and accordingly pass speaking order in terms with Section 250(4) & (6) of the Act.
9. As per the aforesaid terms, the grounds of appeal raised by the assessee stands allowed for statistical purposes.
10. In the result, all the appeals of the assessee are allowed for statistical purposes."
13. Respectfully following the aforesaid order, on the same parity of reasoning and as per rule of consistency, we set-aside the respective orders of the Ld. CIT(Appeals)/NFAC and remand the matters back to its 18 Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 file for denovo adjudication while complying with the principles of natural justice. At the same time, it is directed that this being the final opportunity, the assessee shall duly comply with the hearing notices from the Ld.CIT(Appeals)/NFAC and represent the matter on merits. The Ld.CIT(Appeal)/NFAC shall accordingly pass a speaking order in terms with Section 250(4) & (6) of the Act.
14. That as per aforesaid terms, the grounds of appeal raised by the assessee stands allowed for statistical purposes.
15. In the result, appeals of the assessee in ITA Nos.173, 174 & 175/RPR/2026 for A.Ys. 2014-15, 2016-17 & 2017-18 are allowed for statistical purposes.
16. In the combined result, appeal of the assessee in ITA No. 172/RPR/2026 for A.Y.2013-14 is dismissed and appeals of the assessee in ITA Nos.173, 174 & 175/RPR/2026 for A.Ys. 2014-15, 2016-17 & 2017-18 are allowed for statistical purposes.
Order pronounced in the open court on 4 th May, 2026.
Sd/- Sd/-
AVDHESH KUMAR MISHRA PARTHA SARATHI CHAUDHURY
(ACCOUNTANT MEMBER) (JUDICIAL MEMBER)
रायपरु / RAIPUR ; दनांक / Dated : 4th May, 2026.
SB, Sr. PS
19
Jila Sahakari Kendriya Bank Maryadit Bilaspur Vs. DCIT, Circle-1(1), Bilaspur (C.G.) ITA Nos.172, 173, 174 & 175/RPR/2026 आदे श क त ल प अ े षत / Copy of the Order forwarded to :
1. अपीलाथ /The Appellant.
2. यथ /The Respondent.
3. The CIT(Appeals)-1, Raipur (C.G.)
4. वभागीय त न ध, आयकर अपील य अ धकरण, रायपरु बच, रायपरु / DR, ITAT, Raipur Bench, Raipur.
5. गाड फ़ाइल / Guard File.
आदे शानुसार / BY ORDER, Samiran Digitally by Samiran signed // True Copy // Bera, Sr. Bera, Sr. PS, ITAT, Raipur Senior Private Secretary PS, ITAT, Date:
आयकर अपील य अ धकरण, रायपुर / ITAT, Raipur. 2026.05.04 Raipur 15:26:35 +05'30'