THE TIRUPPUR COOPERATIVE HUSING SOCIETY LTD., TIRUPPUR V. ITO, WARD-1(2), TIRUPPUR

ITA 604/CHNY/2022

AI Insights

The case involves The Tirupur Co-operative Housing Society Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals)-19, Chennai, concerning the assessment year 2017-18. The primary contention was the addition of Rs.244.99 Lacs as unexplained money under section 69A of the Income Tax Act, following a survey that revealed incriminating documents. The Tribunal found that while the assessee maintained proper books of accounts, the source of the cash deposits needed further substantiation. The legal arguments regarding the non-issuance of notice under section 143(2) were not upheld, as the return was considered non-est.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134119 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 31-07-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 18-07-2022
• Other Referred Cases: 189 ITD 608 (Viz), ITA No.646/Bang/2021, ITA No.76/Viz/2021, ITA No.1185/Del/2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 148; 144; 80P; 143(2); 64

Judgement Text

आयकर अपीलीय अिधकरण “ए” ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHENNAI माननीय ी महावीर िसंह, उपा ! एवं माननीय ी मनोज कुमार अ%वाल ,लेखा सद( के सम!। BEFORE HON’BLE SHRI MAHAVIR SINGH, VP AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ ITA No.604/Chny/2022 (िनधा)रण वष) / As sessment Year: 2017-18) The Tirupur Co-operative Housing Society Ltd. 138-A, Kumaran Road, Tirupur-641 601. बनाम / V s . ITO Ward-1(2), Tirupur. थायीलेखासं./जीआइआरसं./PAN/GIR No. A AD AT- 64 67-E (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Shri S.Sridhar (Advocate)-Ld.AR थ कीओरसे/Respondent by : Shri R.Mohan Reddy (CIT)-Ld.DR सुनवाईकीतारीख/Date of Hearing : 01-08-2023 घोषणाकीतारीख /Date of Pronouncement : 01-08-2023 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of the order of learned Commissioner of Income Tax (Appeals)-19, Chennai [CIT(A)] dated 28-06-2022 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 144 r.w.s.147 of the Act on 31-12-2019. The grounds taken by the assessee read as under: - “1. The order of the Learned CIT(A) is bad and erroneous in law in sustaining the addition relating to cash deposits into the bank account and against the principles of natural justice. 2 ITA No.604/Chny/2022 2. The Learned CIT(A) erred in not adjudicating Ground No.2 which was in respect of non- issuance of notice u/s.143(2), despite a valid return filed in response notice us.142(1)(i), though processed u/s.143(1), treated as invalid by the Assessing Officer. 3. The action of the learned CIT(A) in sustaining the order of the Assessing Officer is not justified, for the transactions, resulting in the cash deposits in to the Bank, have been duly entered in the regularly maintained books of account, that the business results have been accepted and that the books of accounts have not been rejected, more particularly the book was even audited under Tamil Nadu Co-operative Societies Act, 1983 [Relying on 189 ITD 608 (Viz)] 4. The CIT(A) erred in not looking at the law in proper perspective i.e., sec.69A, can be invoked, ONLY when the alleged money was not found recorded in the books of accounts, which is not the case of the appellant. 5. The action of the CIT(A) is erroneous, for he failed to consider the scope and effect of "The Specified Bank Notes (Cessation of liabilities) Act, 2017, which plays a vital role in the alleged addition. [Relying on ITA No.646/Bang/2021 dt.18/02/2022; ITA No.76/Viz/2021 dt. 16/03/2022 and ITA No.1185/Del/2021 dt.06/04/2022].” 2. The Ld. AR submitted that the legal grounds raised by the assessee have not been adjudicated by lower authorities. The Ld. AR also made submissions on merits. The Ld. CIT-DR submitted that the return of income was non-est return. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. 3. The assessee is a cooperate society. The assessee did not file any return of income. The return of income was filed on 03.04.2018 pursuant to notice u/s 142(1). The assessee was subjected to survey on 03.10.2018 wherein certain incriminating documents were found and impounded. Since the return was filed belatedly in 03.04.2018, the same was treated as invalid. However, the information furnished along with the return was taken to arrive at total income of the assessee. The case was reopened and notices u/s 148 was issued on 29.03.2019. Considering the written submissions of the assessee, Ld. AO arrived at income of Rs.12.38 Crores. The deduction u/s 80P as claimed by the assessee was denied. The interest income was assessed as income from other 3 ITA No.604/Chny/2022 sources. The cash deposit of Rs.244.99 Lacs in various bank account was added as unexplained money u/s 69A. 4. The impugned order is common order for AYs 2012-13 to 2020-21. The Ld. CIT(A) allowed deduction u/s 80P)(2)(a)(i). The Ld. AO was directed to allow interest / dividend earned from co-operative societies u/s 80P(2)(d). The addition of Rs.244.99 Lacs was confirmed. The bench was informed that the revenue has not preferred any further appeal against the same. However, the assessee is before us assailing the addition of Rs.244.99 Lacs. 5. So far as the legal grounds urged by Ld. AR are concerned, it could be seen that the return filed by the assessee has been treated as non- est return. Therefore, no notice u/s 143(2) is required to be issued in such a case. It could also be seen that the assessee did not file any return of income whereas incriminating documents were found during survey proceedings. The Ld. AO has sufficient information of escapement of income. Therefore, we find no substance in the legal grounds urged by the assessee. 6. So far as addition of Rs.244.99 Lacs is concerned, it could be seen that the assessee is a cooperative society and it provide credit facilities to its members within the framework of law. The assessee is maintaining proper books of accounts. Therefore, the issue of addition of Rs.244.99 Lacs stand restored back to the file of Ld. AO with a direction to the assessee to substantiate the source of the same. 4 ITA No.604/Chny/2022 7. The appeal stands partly allowed for statistical purposes. Order pronounced on 01 st August, 2023. Sd/- Sd/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) उपा ! / VICE PRESIDENT लेखा सद( / ACCOUNTANT MEMBER चे3ई Chennai; िदनांक Dated : 01-08-2023 DS आदेशकीAितिलिपअ%ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. थ /Respondent 3. आयकरआयु