H 529 ADARIKALATHUR PACCS LTD.,CUDDALORE V. ITO, WAR-4, CUDDALORE

ITA 961/CHNY/2025

AI Insights

The case involves the Adarikalathur Primary Agricultural Cooperative Credit Society Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, concerning the assessment year 2018-19. The primary contention was the addition of Rs. 1,92,45,000 as unexplained money under section 69A of the Income Tax Act, based on cash deposits. The Assessing Officer (AO) had passed an ex parte order due to the assessee's non-response to notices, which was later upheld by the CIT(A) despite the assessee's delayed appeal. The Tribunal found merit in the assessee's arguments regarding the nature of the deposits and the procedural lapses in the lower authorities' handling of the case, leading to the decision to remit the matter back to the AO.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708571 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Other Referred Cases: Tin Box Company vs CIT, [2001] 249 ITR 216 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR CHANDAN; J. C.I.T
• Assessee Lawyers: G.REDDI PRAKASH; F
• Keywords: Set aside; Reasonable cause

Judgement Text

" आयकर अपीलीय अिधकरण, ‘ए’ Ɋायपीठ, चेɄई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ŵी जॉजŊ जॉजŊ क े, उपाȯƗ एवं ŵी एस.आर.रघुनाथा, लेखा सद˟ क े समƗ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.:961/Chny/2025 िनधाŊरण वषŊ / Assessment Year: 2018-19 II 529 Adarikalathur Primary Agrl Co op Credit Society Ltd., No.529, Adari, Tittagudi, Cuddalore – 606 304. vs. Income Tax Officer, Ward 4, Cuddalore. [PAN:AADFI-4760-Q] (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से/Appellant by : Shri. G. Reddi Prakash, F.C.A. ŮȑथŎ की ओर से/Respondent by : Shri. Kumar Chandan, J.C.I.T. सुनवाई की तारीख/Date of Hearing : 17.06.2025 घोषणा की तारीख/Date of Pronouncement : 15.07.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, AM : This appeal by the assessee is filed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the same assessment year 2018-19, dated 16.12.2024. 2. The assessee has raised the following grounds:- 1. The order passed by the Learned CIT (A) and the LD. AO is opposed to law and contrary to the facts and circumstances of the case and is therefore unsustainable. 2. The Learned CIT (A) and Ld. AO failed to appreciate that the purpose and object of society is to encourage and incentivize the :-2-: ITA. No:961/Chny/2025 savings habits by accepting deposits and providing loans to its members. 3. The Ld Assessing Officer should have appreciated the fact that all the cash deposits and credits in the bank account are not the income of the appellant. The assessing officer failed to understand that the credits and cash deposits include the repayment of loans by the members, deposit by the members with the appellant etc which is not income of the appellant. 4. The appellant pleads for an opportunity to explain its case before your good self. 5. The appellant seeks your leave to add, alter, amend or delete any of the grounds urged at the time of hearing 3. At the outset, we find that there is a delay of 33 days in appeal filed by the assessee, for which the assessee has filed affidavit stating the reasons for delay, wherein, it is submitted that the assessee is a society consisting of agriculturists with limited literacy and no prior exposure to digital procedures was completely unaware of the faceless appellate proceedings and the requirement of filing appeals online and it is also submitted that the society being located in a rural village with poor internet facilities and no in house accountant or legal advisor was not in a position to understand or act upon the digital intimation without external professional help. Hence, there was a delay in filing the appeal by the assessee. After considering the Affidavit filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeal on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeal and admit the appeal filed by the assessee for adjudication. :-3-: ITA. No:961/Chny/2025 4. The brief facts of the case are that the assessee is a Agricultural Co-operative Society has made cash deposits of Rs.1,92,45,000/- and had not filed the return of income for AY 2018-19. On the basis of information available, the case was reopened u/s.147 of the Act and statutory notices were issued. However, the assessee failed to respond to any of the notices and hence the AO passed an exparte order u/s.147 r.w.s.144 r.w.s.144B of the Act dated 09.03.2023 by making an addition of entire cash deposit of Rs.1,92,45,000/- as unexplained money u/s.69A of the Act and brought to tax. 5. Aggrieved by the order of the AO, the assessee preferred appeal before the ld.CIT(A), NFAC, Delhi with the delay of more than 7 months. 6. The ld.CIT(A), NFAC has dismissed appeal as the conditions laid down u/s.249(3) are not fulfilled and also there is a delay of more than 7 months in filing the appeal and hence, there is no sufficient cause for the delay in filing of appeal. Further, the ld.CIT(A) has also stated that the inordinate delay in filing of appeal cannot be condoned and therefore, rejected the appeal filed by the assessee. Aggrieved by the order of the ld.CIT(A) the assessee is before us. 7. The ld.AR submitted that the purpose and object of society is to encourage and incentivize the savings habits by accepting deposits and providing loans to its members and all the cash deposits and credits in the bank account are not the income of the assessee. The ld.AR further submitted that the credits and cash deposits include the repayment of loans :-4-: ITA. No:961/Chny/2025 by the members, deposit by the members with the assessee which is not income of the assessee and hence prayed for one more opportunity to represent their case and submit all the required documents before the AO. 8. Per contra, the ld.DR submitted that the assessee is negligent in responding to the notices of the department and also filed the appeals both before ld.CIT(A) as well as the Tribunal and hence prayed for confirming the order of the ld.CIT(A). 9. We have heard the rival parties and perused the material on record and gone through the orders of the lower authorities. We note that the Assessing Officer has passed an exparte order by considering the information available with the department and made an addition of entire cash deposits as unexplained money and on appeal the same has been dismissed by the ld.CIT(A)-NFAC without condoning the delay in filing the appeal before the first appellate authorities. Since the assessee has failed to participate both before the AO as well as the appellate proceedings, we levy the cost of Rs.25,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order. Therefore, we set aside the order of the ld.CIT(A) to meet the ends of justice and fair play and remit the matter back to the file of Assessing Officer by relying on the decision of the Hon’ble Supreme Court in the case of Tin Box Company vs CIT, [2001] 249 ITR 216 (SC) and direct AO to denovo frame the order in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, :-5-: ITA. No:961/Chny/2025 assessee to be diligent and file written submissions and relevant documents if advised so. 10. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the court on 15th July, 2025 at Chennai. Sd/- Sd/- (जॉजŊ जॉजŊ क े) (GEORGE GEORGE K) उपाȯƗ /VICE PRESIDENT (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखा सद˟/ACCOUNTANT MEMBER चेɄई/Chennai, िदनांक/Dated, the 15th July, 2025 SP आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3.आयकर आयुƅ/CIT– Chennai/Coimbatore/Madurai/Salem 4. िवभागीय Ůितिनिध/DR 5. गाडŊ फाईल/GF "