Dr Balasaheb Savant Nagari Sahakari Patsanstha Maryadit, Sindhudurg, Sindhudurg V. The Income Tax Office, Ward-1, Kundal, Kundal

ITA 535/PUN/2023

AI Insights

The case involves Dr. Balasaheb Savant Nagari Sahakari Patsanstha Maryadit, a cooperative society engaged in accepting deposits and providing credit facilities, which filed an appeal against the order of the NFAC for the assessment year 2017-18. The society had claimed an exemption under section 80P(2)(a)(i) of the Income Tax Act, 1961, which was disallowed by the Assessing Officer concerning interest income from nominal members amounting to Rs.43,10,557. The NFAC dismissed the appeal for non-prosecution but also discussed an unrelated factual background in their order. The ITAT found this approach to be a grave error and remanded the case back to the NFAC for a thorough re-examination on the correct merits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137637 (ITAT-PUNE)
• Duration Of Justice: 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 23-05-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 02-05-2023
• Laws Referred To: Income Tax Act, 1961, Maharashtra Co-operative Societies Act, 1960
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.535/PUN/2023 िनधाᭅरण वषᭅ / Assessment Year : 2017-18 Dr. Balasaheb Savant Nagari Sahakari Patsanstha Maryadit, At Post Kudal, Taluka- Kudal, Dist. Sindhudurg- 416520 PAN : AAAAP5581G Vs. ITO, Ward-1, Kudal. Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of the National Faceless Appeal Centre, Delhi [‘NFAC’] dated 13.03.2023 for the assessment year 2017-18. 2. Briefly, the facts of the case are that the appellant is a cooperative society registered under the Maharashtra Co-operative Assessee by : None Revenue by : Shri Piyush Kumar Singh Yadav Date of hearing : 24.05.2023 Date of pronouncement : 29.05.2023 ITA No.535/PUN/2023 2 Societies Act, 1960. It is engaged in the business of accepting deposits and providing credit facilities to its members. The Return of Income for the assessment year 2017-18 was filed on 21.10.2017 disclosing total income of Rs.Nil after claiming exemption u/s 80P(2)(a)(i) of the Income Tax Act, 1961 (‘the Act’). Against the said return of income, the assessment was completed by the Income Tax Officer, Ward- Kudal (‘the Assessing Officer’) vide order dated 29.11.2019 passed u/s 143(3) of the Act after disallowing the claim for deduction u/s 80P(2)(a)(i) of the Act in respect of interest income earned from nominal members of the society of Rs.43,10,557/-. 3. Being aggrieved by the above disallowance, an appeal was filed before the NFAC, who vide impugned order though dismissed the appeal in limine for non-prosecution. However, I noticed that the NFAC had discussed the factual background of the case different from the case before him as evident from para 3 of the impugned order, as the NFAC had discussed the factual background relating to the addition of Rs.26,69,000/- as unexplained investment u/s 69, which is not the case in the appeal before him. In the ITA No.535/PUN/2023 3 circumstances, I remand the matter to the file of the NFAC for de novo adjudication of the issue in appeal on merits. I will be failing my duty, if I do not point out that the errors committed by the NFAC are grave in nature and depicts callous approach in disposal of the appeal, which clearly shows non-application of mind to the issue in appeal. 4. In the result, the appeal filed by the assessee stands partly allowed. Order pronounced on this 29 th day of May, 2023. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 29 th May, 2023. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “SMC” बᱶच, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.