M/s. Seva Souharda Credit Co operative Limited , Tumkur V. Income Tax Officer, Ward- 1 & TPS, Tumkur

ITA 1143/BANG/2022

AI Insights

The case involves M/s. Seva Souharda Co-operative Ltd., which appealed against the order of the CIT(A)/NFAC, Delhi, concerning the assessment year 2017-18. The primary contention was the ex-parte nature of the assessment and subsequent appeals, where the assessee failed to respond to multiple notices. The AO had made additions under Section 68 and assessed income under Section 144, which were upheld by the CIT(A). The Tribunal, considering the lack of participation from the assessee and the procedural fairness, decided to remit the case back to the AO for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115296 (ITAT-BANGALORE)
• Duration Of Justice: 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-01-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 18-12-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANDEEP CHALAPAHT Y
• Keywords: Unexplained cash credit
• Section: 68; 144; 142(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU (SMC) “B” BENCH, BENGALURU Before Shri Chandra Poojari, Accountant Member ITA No. 1143/Bang/2022 (Assessment Year: 2017-18) M/s. Seva Souharda Co-operative Ltd. Arjun Complex Behind Beside Chakthi Bhavan Batawadi, Tumkur 572103 PAN – AAQAS9798G vsThe Income Tax Officer Ward - 1 & TPS Tumkur (Appellant) (Respondent) Assessee by:Shri Sandeep Chalapaht y, CA Revenue by:Shri Ganesh R. Ghale, Standing Counsel Date of hearing: 18.01.2023 Date of pronouncement: 18.01.2023 O R D E R Per: Chandra Poojari, A.M. This appeal filed by the assessee is directed against the order of the CIT(A)/NFAC, Delhi dated 10.12.2022 for assessment year 2017-18. 2.The assessee has raised the following grounds of appeal: - “1. That the order of the learned Commissioner of Income-tax (Appeals) in so far it is prejudicial to the interests of the appellant is bad and erroneous in law and against the facts and circumstances of the case. 2. That the learned Commissioner of Income-tax (Appeals) erred in law and on facts in deciding the appeal ex-parte on the ground that the appellant did not respond to the hearing notices and such finding is perverse as the appellant has sought adjournment. 3. That the learned assessing officer erred in law and on facts in assessing the profit of Rs. 2,26,049 as income of the appellant ITA No. 1143/Bang/2022 M/s. Seva Souharda Co-operative Ltd. 2 even though the income is not exceeding the maximum income not chargeable to tax of Rs. 2,50,000/- 4. That the learned assessing officer erred in law and on facts in assessing a sum of Rs. 11,38,500/- as income u/s 68 of the Act and taxing u/s 115BBE of the Act even though it clear that the appellant is a Co-operative Society and the sources of such cash deposits are cash deposits by its members. 5. That the learned Commissioner of Income-tax (Appeals) ought to have disposed off the appeal on merits.” 3.The facts of the case are that the assessee did not file its return of income for AY 2017-18. Subsequently, notice under Section 142(1) of the Income Tax Act, 1961 (the Act) was issued to the assessee followed by notice under Section 143(2) of the Act. The assessment order was passed under Section 144 of the Act. The AO made addition of Rs.11,38,500/- under Section 68 r.w.s. 115BBE of the Act as unexplained credit in the hands of the assessee. Further the AO assessed Rs.2,26,049/- as income of the assessee. Aggrieved by the order of the AO, the assessee has preferred appeal before the CIT(A). 4.On appeal the learned CIT(A) confirmed the disallowance made by the AO by observing as under: - “6. In view of the above, the undersigned is left with no option but to decide the case on the basis of material on record. Bare perusal of the facts shows that the appellant has not pursued the appeal despite being granted several opportunities as elaborated supra. The assessee has further jeopardized its case by not responding despite several opportunities that were provided. The assessee has failed to substantiate the credits of Rs.11,35,500/- and has not explained its eligibility for claiming deduction u/s 80P(2)(a)(1) of the Income Tax Act, 1961. In the absence of any evidence whatsoever, whether documentary or otherwise, I am constrained to agree with the approach adopted by the AO in adding back the unexplained credits as well as disallow the u/s 80P(2)(a)(1). The AO has passed a reasoned and speaking order considering all the facts and the circumstances of the case and no interference with the order of the AO is called for. The grounds of appeal are therefore dismissed.” ITA No. 1143/Bang/2022 M/s. Seva Souharda Co-operative Ltd. 3 Again the assessee is in appeal before this Tribunal. 5.I have heard the rival contentions and perused the material on record. In this case the assessment order was passed by the AO ex-parte under Section 144 of the Act. The NFAC, Delhi issued various notices to assessee for submission in support of the grounds of appeal on the following dates: - S.No. Date of Notice Sent Compliance DateRemarks 1.14.01.202118.01.2021No response from the assessee 2. 04.11.2021 - No response from the assessee on the enablement of communication by NFAC 3 21.11.2022 05.12,2022 No response from the assessee As there was no response from the assessee before the NFAC, finally NFAC decided the issue on the basis of material available on record. 6.Before us the learned A.R. submitted that one more opportunity may be given in the interest of justice to present assessee’s case before the AO. Since the assessment order has been passed ex-parte and there was no participation of the assessee before the NFAC also, in my opinion it is appropriate to remit the entire issue in dispute to the file of the AO for his fresh consideration. Accordingly, the orders of the lower authorities are set aside and the issue is remitted to the file of the AO for fresh consideration. 7.In the result, the appeal filed by the assessee is allowed for statistical purposes. Dictated and pronounced in the open Court on 18 th January, 2023. Sd/- (Chandra Poojari) Accountant Member Bengaluru, Dated: 18 th January, 2023 ITA No. 1143/Bang/2022 M/s. Seva Souharda Co-operative Ltd. 4 Copy to: 1.The Appellant 2.The Respondent 3.The CIT(A) -NFAC, Delhi 4.The CIT - 5.The DR, ITAT, Bengaluru 6.Guard File By Order //True Copy// Assistant Registrar ITAT, Bengaluru n.p.