AI Insights
The case involves Abhishek Nagari Sahakari Patsanstha Limited, a credit cooperative society, which appealed against the additions made to its income for various assessment years due to non-grant of deductions under section 80P(2)(a)(i) of the Income-tax Act, 1961, on interest income. The AO had initially initiated re-assessment proceedings based on substantial cash deposits but later made additions unrelated to these deposits. The Tribunal, referencing the decision in CIT vs. Jet Airways (I) Ltd., held that the additions made were not legally sustainable as they did not align with the reasons for which the re-assessment was initiated.
Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 124116 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
20-04-2023
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Next Hearing Date
19-04-2023
Assessment Year
2014-2015
Appeal Filed On
16-03-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT आयकर अपील सं. /ITA No.308 to 310 & 333/PUN/2023 नधा रण वष / Assessment Years : 2016-17, 2014-15, 2013-14 & 2017-18 Abhishek Nagari Sahakari Patsanstha Limited, GP-160, Ravi Complex, Opp. D.Y Patil School, Shahunagar, Chinchwad, Pune – 411 019 Maharashtra PAN : AACTA0148F Vs. ITO,Ward-8(3), Pune/ ITO,Ward-8(5), Pune/ Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP: These four appeals by the assessee relate to the assessment years 2013-14, 2014-15, 2016-17 and 2017-18. 2. There is a delay of 49 days each in filing appeals for the A.Y. 2013-14, 2014-15 and 2016-17 and 53 days in the appeal for the A.Y. 2017-18. The assessee has filed condonation petition for the delay. I am satisfied with the reasons given in the petition and accordingly condone the delay. The appeals are, therefore, admitted for disposal of merits. Assessee by Shri Girish Ladda Revenue by Shri Ganesh B. Budruk Date of hearing 20-04-2023 Date of pronouncement 21-04-2023 ITA Nos. 308 to 310 & 333/PUN/2023 Abhishek Nagari Sahakari Patsanstha Limited 2 ITA No.310/PUN/2023 - A.Y. 2013-14 : 3. The assessee is aggrieved by the confirmation of addition of Rs.1,38,192/- made by the Assessing Officer by not granting deduction u/s.80P(2)(a)(i) of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) on the interest income. 4. Briefly stated, the facts of the case are that the assessee is a credit cooperative society, which did not file its return for the year under consideration. The AO initiated re-assessment proceedings by means of notice u/s.148. In such notice, it was alleged that the assessee deposited cash in saving bank account amounting to Rs.1.32 crore and Rs.59.85 lakh with banking company totaling to Rs.1.92 crore, which needed verification. During the course of assessment proceedings, the AO got satisfied with the explanation of the assessee on the proposed addition of Rs.1.92 crore in the reasons. He, however, observed that the claim of the assessee for deduction u/s.80P on interest income of Rs.1,38,192/- was not tenable. In the final assessment made u/s.143(3) r.w.s.147, he determined total income of the assessee at Rs.1,38,192/-. No relief was allowed in the first appeal. Aggrieved thereby, the assessee has come up in appeal before the Tribunal. ITA Nos. 308 to 310 & 333/PUN/2023 Abhishek Nagari Sahakari Patsanstha Limited 3 5. I have heard the rival submissions and gone through the relevant material on record. The AO initiated the re-assessment proceedings on the following reasons, as have been reproduced in the assessment order : “As per the information available in Priority-1 category of NMS/AIMS cycle, it is seen that during the F.Y. 2012-13 relevant to A.Y. 2013-14 the assessee M/s. Abhishek Nagari Sahakari Patsanstha Limited, has made following transaction : Deposited Cash in a Saving Bank Account – Rs.1,32,99,740/- Deposited in cash of with banking company – Rs. 59,85,900/- Total - Rs.1,92,85,640/- The above mentioned assessee has made cash deposit in a saving bank account of Rs.1,32,99,740/- and deposited cash with a banking company of Rs.59,85,900/- totaling to Rs.1,92,85,640/- during the F.Y. 2012-13 relevant to A.Y. 2013-14. On verification of the ITD/ITBA System, it is found that the assessee has not filed the ITR within due time. The sources of these cash deposit of Rs.1,92,85,640/- is needed to be verified. Similarly, the due taxes arising from these transactions are also remained to be taxed. Therefore, the assessee has failed to disclose the income on account of cash deposits and has escaped assessment”. 6. Thus, it is evident that the AO initiated re-assessment proceedings on the ground that the cash deposited in savings bank account and with banking company was not properly verifiable. He, however, eventually got satisfied with the assessee’s explanation on the above score. Thereafter, he chose to make an addition towards interest income earned by the assessee and accordingly denied the deduction u/s.80P. It is, therefore, evident that the denial of ITA Nos. 308 to 310 & 333/PUN/2023 Abhishek Nagari Sahakari Patsanstha Limited 4 deduction u/s.80P on interest income was not the subject matter of the reasons recorded by the AO for initiating the re-assessment proceedings. At the same time, the reasons which constituted the foundation for the initiation of re-assessment proceedings, did not get reflected in the computation of total income as determined by the AO on his being satisfied. 7. It is worthwhile to note that the Hon’ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd. (2011) 331 ITR 236 (Bom) has held that the AO cannot proceed with re-assessment if the grounds mentioned in re-assessment are non-existent i.e., if no addition is made on that score. When I examine the factual scenario obtaining in the instant case on the touchstone of the ratio laid down by the Hon’ble jurisdictional High Court in the above decision, the inescapable conclusion which can be drawn is that the addition made in the re-assessment order, different from the one for which notice u/s 148 of the Act was issued and that itself was not made, lacks legality. The same is, therefore, directed to be deleted. ITA Nos. 309 and 308/PUN/2023 - A.Yrs. 2014-15 and 2016-17 : 8. It is admitted by both the sides that the facts and circumstances of these two appeals are mutatis mutandis similar to those for the ITA Nos. 308 to 310 & 333/PUN/2023 Abhishek Nagari Sahakari Patsanstha Limited 5 A.Y. 2013-14. For these two years as well, the AO initiated the re- assessment proceedings to verify the cash deposited in the bank. However, in the eventual assessments made u/s.147, the AO did not make any addition on that score but reduced the claim of deduction u/s.80P by denying it on the interest income. Following the view taken hereinabove, I order to delete the addition made for both the years. ITA No.333/PUN/2023 - A.Y. 2017-18 : 9. The assessee in appeal for this year is aggrieved by the confirmation of addition of Rs.22,89,000/- u/s.69A towards cash deposited in the bank account and a further addition amounting to Rs.23,13,273/- towards estimation of income on amount deposited in the bank account. 10. Shorn of unnecessary facts, it is seen that the AO completed the assessment u/s.144 computing total income at Rs.46,02,270/- by making the above referred two additions by means of an ex parte order passed u/s.144. The assessee filed written submissions before the ld. CIT(A), who again passed ex parte order. 11. It is seen that the assessment order in this case was passed on 18-12-2019, whereas the assessee filed its reply to the AO by means ITA Nos. 308 to 310 & 333/PUN/2023 Abhishek Nagari Sahakari Patsanstha Limited 6 of an e-mail communication dated 12-12-2019, whose evidence has been placed on record. Similar is the position regarding the first appeal inasmuch as the assessee furnished written submissions, which were omitted to be considered by the ld. CIT(A). In my considered opinion, the ends of justice would meet adequately if the impugned order for this year is set-aside and the matter is remitted to the file of AO for making the assessment afresh. I order accordingly. Needless to say, the assessee will be allowed reasonable opportunity of hearing in such fresh assessment. 12. In the result, the appeals for the assessment years 2013-14, 2014-15 and 2016-17 are allowed and that the appeal for the A.Y. 2017-18 is allowed for statistical purposes. Order pronounced in the Open Court on 21 st April, 2023. Sd/- (R.S.SYAL) VICE PRESIDENT पुणे Pune; िदनांक Dated : 21 st April, 2023 सतीश ITA Nos. 308 to 310 & 333/PUN/2023 Abhishek Nagari Sahakari Patsanstha Limited 7 आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The Respondent 3. 4. 5. The Pr.CIT concerned DR, ITAT, ‘SMC’ Bench, Pune गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 20-04-2023 Sr.PS 2. Draft placed before author 21-04-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *
