" \n \nIN THE INCOME TAX APPELLATE TRIBUNAL \nNAGPUR BENCH, NAGPUR \n \nBEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND \nSHRI K.M. ROY, ACCOUNTANT, MEMBER \n \nITA no.99/Nag./2024 \n(Assessment Year : 2017–18) \n \nAsstt. Commissioner of Income Tax \nCircle–3, Nagpur \n \n……………. Appellant \n \nv/s \n \nThe Wardha District Central Co–operative \nBank Ltd., Opp. Railway Station \nWardha 442 001 PAN – AAAAT6426G \n \n……………. Respondent \n \nAssessee by : Shri Mahavir Atal \n \n \nRevenue by : Shri Abhay Y. Marathe \n \nDate of Hearing – 13/02/2025 \nDate of Order – 21/03/2025 \n \nO R D E R \n \nPER K.M. ROY, A.M. \n \n \n \nThis appeal by the Revenue is emanating from the impugned order \ndated 03/01/2024, passed by the learned Commissioner of Income Tax \n(Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the \nassessment year 2017–18. \n \n2. \nThe Revenue has raised following grounds:– \n \n“1. The Learned CIT(A) erred in law and in facts in annulling the assessment \nwhen show cause notice was duty Issued by the Assessing Officer and duly \nresponded to by the assessee and the response of the assessee was \nconsidered while framing the assessment order. \n \n2. The Learned CIT(A) erred in law and in facts in annulling the assessment \nwithout going into the merits of the case on which additions were made. \n \n3. Any other ground that may be taken at the time of hearing.” \n \n\n2 \n \nThe Wardha District Central \nCo–operative Bank Ltd. \nITA no.99/Nag./2024 \n \n \n \n3. \nThis is a case where the learned CIT(A) annulled the assessment by \nholding as under:– \n \n“7.5 the other contention of the appellant that the A.O. did not follow the \nCBDT’s instruction no.20/2015 dated 29/12/2015. In this regard, I find that in \nthe assessment order, AO has made additions based on uploaded written \nsubmission along with computation of income, audit report and its annexures, \naudited financial statements, details of all bank account, details of investments \nand other details documents. It is evident from record that no such proposed \naddition or disallowance was intimated to the appellant by way of issuing \nshow, cause notice to provide a fair opportunity to explain his position on the \nproposed additions/disallowances in accordance with the principle of natural \njustice. Now the vital question is whether the above instruction of CBDT is \nmandatory procedure or informative in nature. The appellant has put his \nreliance upon the CBDT's Instruction no. 20/2015 dated 29/12/2015 & \ndecision of Hon'ble Supreme Court in case of Tin Box Co. vs. CIT [249 ITR \n216]. The relevant para no. 4 of CBDT's Instruction no. 20/2015 dated \n29/12/2015 is being reproduced below:- \n \n\"4. The Board further desires that in all cases under scrutiny, where the \nAssessing Officer proposes to make additions or disallowances, the assessee \nwould be given a fair opportunity to explain his position on the proposed \nadditions/disallowances in accordance with the principle of natural justice. In \nthis regard, the Assessing Officer shall issue an appropriate show-cause notice \nduly indicating the reasons for the proposed additions/disallowances along with \nnecessary evidences/reasons forming the basis of the same. Before passing the \nfinal order against the proposed additions/disallowances, due consideration \nshall be given to the submissions made by the assessee in response to the \nshow-cause notice.\" \n \n7.5.1 It is notable that in the above direction, the CBDT has used word 'the \nassessing officer shall issue an appropriate show cause notice', which shows \nthat the CBDT is clear in mind that the said instruction should be strictly \nadhered in order to complete assessment order. Thus, it is clear from above \ndirection of CBDT that the AO is bound to issue show cause notice to assessee \nbefore making any addition or disallowance to explain his position on the \nproposed additions/disallowances in accordance with the principle of natural \njustice. Also, I find that the Hon'ble Supreme Court in case of Tin Box Co. vs. \nCIT [249 ITR 216], has held that Assessment order must be made after the \nassessee has been given reasonable opportunity of setting out his case; \nassessment made without giving the assessee such an opportunity was liable \nto be set aside. Further, I find that in the case of Lal Construction Company. \nSecunderabad v/s the DCIT, Circle-10(1), Hyderabad, in ITA No. 980/HYD/ \n2019, AY 2016-17, date of order 12/10/2020, the Hon'ble ITAT, Hyderbad \nBenches 'B', Hyderabad, has remitted the issue to the file of CIT(A) for \nreconsideration of the issue in accordance with law and if the CIT(A) feels that \nthe assessment has to be enhanced, then, he shall issue a notice to the \nassessee and after considering the assessee's objections, if any, filed by the \nassessee in writing, thereafter only, the CIT(A) shall adjudicate the appeal. \nNeedless to mention that assessee shall be given a fair opportunity of hearing. \n\n3 \n \nThe Wardha District Central \nCo–operative Bank Ltd. \nITA no.99/Nag./2024 \n \n \nIn the above case before Hon'ble ITAT, Hyderabad, the matter is that the \nCIT(A) has enhanced the income of appellant without giving opportunity of \nbeing heard in writing, only oral opportunity was given. In the present case, it \nis evident from assessment order that no such show cause notice indicating \nproposed additions or disallowances was issued to the appellant at the time of \nassessment proceedings. In view of above discussion, I am of the opinion that \nthe said instruction of CBDT is mandatory procedure in nature. Hence, I find \nmerit in the second contention of the appellant. \n \n7.6 The provisions of section 251(1) (a) of the Act empowers the CIT (A) to \nconfirm, reduce, enhance or annul the assessment order in the course of \ndisposing the appeal. In the present case, the AO has not followed the \ninstruction of CBDT's instruction no. 20/2015 dated 29/12/2015. Hence, I \nannulled the assessment order in question. \n \n8. Since the assessment order in question is annulled in above paras, there is \nno requirement for adjudicating other substantial & general issues raised by \nthe appellant in ground nos. 2 to 9. \n \n9. As a result, the appeal is allowed for statistical purposes.” \n \n4. \nPer–contra, the assessment order clearly depicts multiple dates of \nhearing coupled with issuance of notice / questionnaire on different dates. \nThe assessee had uploaded written submissions along with accompanying \ndocuments. The relevant portion of the order is culled out below:– \n \n“The assessee is co-operative bank, engaged in the business of banking. It has \ne-filed its return of income on 01/11/2017 declaring total income at (loss) Rs. \n19,33,28,507/-. This return was processed by CPC as such. The case was \npicked up by CASS for complete scrutiny for the main reasons \"closing stock, \ndisallowance for payment of gratuity, deduction and deposit of TDS, \ninvestments /advances/loans, expenses incurred for earning exempt income, \nbusiness expenses, bonus or commission paid to employee, refund claim\". \nNotice \nu/s \n143(2) \nwas \nissued \non-line \n09/08/2018. \nSubsequently, \nnotice/questionnaire was issued on different dates requiring the assessee to \nfurnish details / documents with regard to the CASS reason. \n \n2. In response to the notices, the assessee has uploaded written submission \nalong with computation of income, audit report and its annexures, audited \nfinancial statements, details of all bank account, details of investments and \nother details documents, which are verified.” \n \n \n5. \nThe impugned order passed by the learned CIT(A) is blatantly opposite \nrepugnant and erroneous and the same cannot be countenanced, because it \n\n4 \n \nThe Wardha District Central \nCo–operative Bank Ltd. \nITA no.99/Nag./2024 \n \n \nis clearly against the assessee and the facts manifest from the assessment \norder. Accordingly, we reverse the impugned order passed by the learned \nCIT(A). Since the learned Authorised Representative for the assessee \nrefrained from arguing on merits of the case by assailing the justifiability of \nadditions, the case is set aside to the file of the learned CIT(A) to decide the \nissues on merits. \n \n6. \nIn the result, Revenue’s appeal stands allowed for statistical purposes. \nOrder pronounced in the open Court on 21/03/2025 \n \n \nSd/- \nV. DURGA RAO \nJUDICIAL MEMBER \n \n \n \n \n \n Sd/- \nK.M. ROY \nACCOUNTANT MEMBER \nNAGPUR, DATED: 21/03/2025 \n \nCopy of the order forwarded to: \n \n(1) \nThe Assessee; \n(2) \nThe Revenue; \n(3) \nThe PCIT / CIT (Judicial); \n(4) \nThe DR, ITAT, Nagpur; and \n(5) \nGuard file. \n \n \n \n \n \n \n \n True Copy \n By Order \nPradeep J. Chowdhury \nSr. Private Secretary \n \n \n \n \n \n \n \n \n \n Sr. Private Secretary \n ITAT, Nagpur \n \n \n \n \n \n \n \n \n \n"