INCOMETAX OFFICER, NON CORPORATE WARD 2(4), KOCHI, KOCHI V. KOCHIN CO OPERATIVE SOCIETY LTD, MATTANCHERRY

ITA 663/COCH/2023

AI Insights

The case involves the Income Tax Officer as the appellant and Kochin Co-Operative Society Ltd. as the respondent. The appeals pertain to the assessment years 2013-14 and 2014-15, challenging the orders of the National Faceless Appeal Centre, Delhi. The primary issue was the unexplained cash deposits amounting to Rs. 2,39,82,500 made by the respondent, which the Assessing Officer treated as unexplained money and denied deduction under section 80P of the Income Tax Act. The CIT(A) initially confirmed the denial of deduction but later accepted the respondent's explanation regarding the source of the cash deposits, which led to the Revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47016 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Other Referred Cases: Nileshwar Range Kallu Chethu Vyavasaya Thozihilali Sahararana Sangham v. CIT [2023] 459 ITR 730 (Ker)
• Laws Referred To: Income Tax Act, 1961, Kerala Co-operative Societies Act, 1969
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJIT KUMAR DAS
• Assessee Lawyers: NIVEDITHA K. KAMMATH
• Keywords: Set aside; Additional evidence; Unexplained cash credit; Principle of natural justice
• Section: 148; 144; 139(1); 69A; 80P

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI GEORGE GEORGE K., VP AND SHRI INTURI RAMA RAO, AM ITA Nos. 644 & 663 /Coch/2023 Assessment Years: 2014-15 & 2013-14 The Income Tax Officer .......... Appellant C.R. Building, I.S. Pres Road, Kochi 682018 vs. Kochin Co-Operative Society Ltd. .......... Respondent VV/1832, Lalan Road, Mattacherry, Cochin -682002 [PAN: AABAK1735C] Appellant by: Shri Sanjit Kumar Das, CIT-DR Respondent by: Ms. Niveditha K. Kammath, Advocate Date of Hearing: 01.04.2025 Date of Pronouncement: 09.04.2025 O R D E R Per: Inturi Rama Rao, AM These appeals filed by the Revenue are directed against the orders of the National Faceless Appeal Centre, Delhi [CIT(A)], dated 20.07.2023 & 25.07.2023 for Assessment Years (AY) 2014-15 & 2013-14, respectively. 2. Since identical issues are involved in these appeals, they are heard together and disposed of by this common order. For the sake of convenience and clarity, the facts relevant to the appeal bearing ITA No. 644/Coch/2023 for AY 2014-15 are stated herein. 2 ITA Nos. 644 & 663/Coch/2023 Kochin Co-opertive Society Ltd. 3. The brief facts of the case are that the appellant is a co- operative society duly registered under the Kerala Co-operative Societies Act, 1969. No return of income u/s. 139(1) Income Tax Act, 1961 (hereinafter \"the Act\") was filed y the appellant, However, based on the information that the appellant co-operative society made cash deposit of Rs. 2,39,82,500/-, the Assessing Officer (AO) formed an opinion that income had escaped assessment to tax and issued a notice u/s. 148 of the Act. The appellant had not complied with the notice u/s. 148 nor filed the details called for. In the circumstances the AO was compelled to make best judgement assessment invoking provisions of section 144 of the Act. While doing so, the AO treated the cash deposit as unexplained money of the assessee, while denying claim for deduction u/s. 80P of the Act. 4. Being aggrieved, appeal was filed before the CIT(A), who vide the impugned order, while confirming the denial of deduction u/s. 80P of the Act for non submission of return of income u/s. 139(1) of the Act, placing reliance on the decision of the Hon'ble Jurisdictional High Court in the case of Nileshwar Range Kallu Chethu Vyavasaya Thozihilali Sahararana Sangham v. CIT [2023] 459 ITR 730 (Ker), however, granted relief in respect of addition made u/s. 69A of the Act on account of unexplained cash credit in the bank by accepting the explanation of the assessee that the deposits were made from the business of gas agency, medical store and providing credit facilities to its members. 3 ITA Nos. 644 & 663/Coch/2023 Kochin Co-opertive Society Ltd. 5. Being aggrieved, the appellant is in appeal before us in the present appeal. 6. The learned CIT-DR submitted that the assessment was exparte. The appellant failed to discharge the onus of explaining the source of cash deposits during the assessment proceedings. The CIT(A), without giving opportunity for rebutting this submission made before the CIT(A), merely accepted the explanation of the appellant that the cash deposits were made out of gas business and deposits from members, etc. Thus, he submits that the order passed by the CIT(A) is in total violation of the principles of natural justice under the provisions of rule 46A of the Income Tax Rules. Therefore, he submits that the matter may be remanded back to the file of CIT(A) for fresh disposal. 7. On the other hand the learned counsel for the assessee submits that no interference is called for in the order of the CIT(A). 8. We have heard the rival contentions and perused the material available on record. On a perusal of the assessment order it would reveal that the AO made the addition of cash deposits as unexplained income of the assessee for the failure of the appellant to explain the source of cash deposits. However, the CIT(A) returned a finding of the fact that the appellant explained the source of cash deposits by producing the books of account. The books of accounts and evidences were produced before the learned CIT(A) for the first time. The CIT(A) ought not have accepted the submission of the appellant without calling for a remand report from the AO in terms of provisions of rule 46A of the I.T. Rules. Therefore, the order of the CIT(A) is hereby set aside and remitted back to the file of 4 ITA Nos. 644 & 663/Coch/2023 Kochin Co-opertive Society Ltd. the CIT(A) with a direction to afford an opportunity to the AO to rebut the additional evidences and books of account produced before him and dispose of the appeal in accordance with law. 9. In the result, the appeals filed by the Revenue stand partly allowed. Order pronounced in the open court on 9th April, 2025. Sd/- Sd/- GEORGE GEORGE K. VICE PRESIDENT (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 9th April, 2025 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin "