ANDHRA PRAGATI FARMS SERVICES COOPERATIVE SOCIETY LIMITED,KURNOOL V. ITO, WARD-1, KURNOOL

SA 41/HYD/2025

AI Insights

The case involves the Andhra Pragati Farmers Service Cooperative Society Limited, which sought a stay on the recovery of an outstanding tax demand of Rs.48,45,089/-. This demand arose from an assessment order under section 143(3) of the Income Tax Act, 1961, which was contested by the society. The society argued that the additions made to their income were unjust, including unexplained money and misappropriated debt waiver relief. The Tribunal considered the society's financial inability to pay the demand and the merits of their case, leading to the decision to grant a stay on the recovery proceedings.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 827060 (ITAT-HYDERABAD)
• Duration Of Justice: 15 day(s)
• Appeal Type: Stay Application
• Pronouncement Date: 09-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2017-2018
• Appeal Filed On: 25-12-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K. VINOTH KANNAN
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Recovery proceedings; Application of stay
• Section: 143(3); 234B; 2

Judgement Text

" आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad Before Shri Manjunatha G., Accountant Member and Shri Ravish Sood, Judicial Member SA No.41/Hyd/2025 (In आ.अपी.सं /ITA No.2226/Hyd/2025) (Ǔनधा[रण वष[/Assessment Year:2017-18) Andhra Pragati Farmers Service Cooperative Society Limited, Hyderabad. PAN: AAAAR1876J Vs. Income Tax Officer, Ward-1, Kurnool. (Appellant) (Respondent) Ǔनधा[ǐरती ɮवारा/Assessee by: Shri KA Sai Prasad, CA राजè व ɮवारा/Revenue by: Shri K. Vinoth Kannan, Sr. AR सुनवाई कȧ तारȣख/Date of Hearing: 09/01/2026 घोषणा कȧ तारȣख/Date of Pronouncement: 09/01/2026 आदेश / ORDER PER. RAVISH SOOD, J.M: The present Stay Application has been filed by the assessee society seeking stay on the recovery of the outstanding demand of Rs.48,45,089/-, which in turn arises from the demand raised in its hands pursuant to the order passed by the Assessing Officer (AO) under Printed from counselvise.com 2 SA No.41/Hyd/2025 Andhra Pragati Farmers Service Cooperative Society Limited vs. ITO section 143(3) of the Income Tax Act, 1961 (for short “the Act”), dated 24/12/2019 for AY 2017-18, which thereafter had been upheld by the CIT(A). 2. Succinctly stated, the assessee, a cooperative society engaged in carrying on the business of providing credit facilities to its members for agricultural purposes, had filed its return of income for the AY 2017-18 on 13/07/2017 declaring an income of Rs. NIL (after claiming deduction under section 80P of the Act). 3. Thereafter, the AO vide his order passed under section 143(3) of the Act, dated 24/12/2019, had determined the income of the assessee society at Rs. 1,04,19,826/- after making two additions, viz., (i) unexplained money under section 69A of the Act: Rs.28,85,000/-; and (ii) income from other sources (misappropriation of debt waiver relief amount received during the year): Rs.75,34,826/-. 4. Consequent to the assessment, a demand of Rs.60,56,589/- was raised in the hands of the assessee society, viz., (i) tax: Rs.45,53,835/-; and (ii) interest under section 234B of the Act: Rs.15,02,754/-. 5. On a perusal of the record, it transpires that the assessee society had paid/deposited an amount of Rs.12,11,500/- (out of Rs.60,56,589/-), Printed from counselvise.com 3 SA No.41/Hyd/2025 Andhra Pragati Farmers Service Cooperative Society Limited vs. ITO which thus had scaled down the balance outstanding demand to an amount of Rs.48,45,089/-. 6. The assessee applicant society had filed the present application seeking stay on the recovery of the outstanding demand of Rs.48,45,089/-. 7. Shri KA Sai Prasad, CA, Learned Authorized Representative (for short, “Ld. AR”) for the assessee applicant, at the threshold of hearing of the present application submitted that the assessee society had suffered the impugned additions, viz., (i) the addition under section 69A of the Act regarding the deposit of the demonetized currency in bank account with Andhra Pragati Grameena Bank, which was sourced out of the loan repayments from its members: Rs.28,85,000/-; and (ii) the debt waiver relief amount received by the assessee society which had been treated as its income: Rs.75,34,826/-. The Ld. AR submitted that the assessee society has a good case on merits and the balance of convenience lies in its favour. The Ld. AR submitted that the department has taken recourse to coercive recovery proceedings regarding the balance outstanding amount of Rs.48.45 lakhs (approx.), which the assessee society is in no financial position to deposit. Elaborating further on his contention, the Ld. AR submitted that the assessee society had Printed from counselvise.com 4 SA No.41/Hyd/2025 Andhra Pragati Farmers Service Cooperative Society Limited vs. ITO already deposited till date an amount of Rs.12,11,500/-, i.e., 20% of the amount of demand, and thus complied with the provisions of 254(2A) of the Act. The Ld. AR submitted that the hearing of the appeal, i.e., ITA NO. 2226/Hyd/2025 is fixed before the Tribunal on 08/04/2026. The Ld. AR submitted in all fairness and in the interest of justice, the impugned recovery proceedings be stayed, failing which the assessee society would suffer an irrepairable loss. 8. Per contra, Shri K. Vinoth Kannan, Learned Senior Departmental Representative objected to the seeking of stay on the recovery of outstanding demand of the assessee society. 9. Considering the totality of the facts involved in the case before us, we are of the considered view that the contentions advanced by the Ld. AR for seeking stay on the recovery of the outstanding demand merits acceptance. 10. We thus, in terms of our aforesaid observation, allow the assessee’s application for stay on the recovery of the outstanding demand of Rs.48,45,089/- for a period of 120 days from the date of this order or till the disposal of the appeal, whichever is earlier. However, we may herein clarify that in case the assessee applicant seeks adjournments on frivolous grounds in the course of the appellate Printed from counselvise.com 5 SA No.41/Hyd/2025 Andhra Pragati Farmers Service Cooperative Society Limited vs. ITO proceedings, then the order granting stay on the recovery of the outstanding demand shall stand vacated. 11. Resultantly, the application filed by the assessee society seeking stay on the recovery of the outstanding demand is allowed in terms of our aforesaid observations. Order pronounced in the open court on 09th January, 2026. Sd/- (MANJUNATHA G.) ACCOUNTANT MEMBER Sd/- (RAVISH SOOD) JUDICIAL MEMBER Hyderabad, Dated: 09th January, 2026. OKK / SPS Copy to: S.No Addresses 1 Andhra Pragati Farmers Service Cooperative Society Limited, Ramdurgam C/o. Katrapati & Associates, 1-1-298/2/B/3, Sowbhagya Avenu Apts, 1st Floor, Ashok Nagar, Street No.1, Hyderabad. 2 Income Tax Officer, Ward-1, Kurnool. 3 The Pr. CIT, Kurnool. 4 The DR, ITAT Hyderabad Benches 5 Guard File By Order Sr. Private Secretary, ITAT, Hyderabad. Printed from counselvise.com "