K 1247 THALAKKARAI PACCS,TIRUPPUR V. ITO, WARD-2(4), TIRUPUR

ITA 2674/CHNY/2025

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The case involves K1247 Thalakkarai Primary Agricultural Co-op. Credit Society, which appealed against the order of the Learned Commissioner of Income Tax (NFAC), Delhi, concerning an assessment framed by the Assessing Officer under sections 147 and 144B of the Income-tax Act, 1961. The assessment was reopened due to non-filing of income tax returns despite substantial cash deposits. The Tribunal's decision was influenced by a High Court ruling that mandated notices for reassessment to be issued by the Faceless Assessing Officer rather than the Jurisdictional Assessing Officer, rendering the notice in this case invalid.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792496 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2018-2019
• Appeal Filed On: 29-09-2025
• Other Referred Cases: TVS Credit Service Ltd vs. DCIT, Hexaware Technologies Ltd vs. Assistant Commissioner of Income Tax
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. RAGHUPATHY
• Assessee Lawyers: S. SRIDHAR; ERODE
• Keywords: Set aside
• Section: 147; 148

Judgement Text

" आयकर अपीलीय अिधकरण, ‘डी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI \u0019ी एबी टी. वक , \u0011ा ियक सद\" एवं \u0019ी जगदीश, लेखा सद\" क े सम) BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2674/Chny/2025 िनधा;रण वष; /Assessment Year: 2018-19 K1247 Thalakkarai Primary Agricultural Co-op. Credit Society, No.1247, Thalakkarai Post, Kethanur, Via Salur Taluk, Tirupu – 641 671. PAN: AABAK 0929Q Vs. The Income Tax Officer, Ward-2(4), Tirupur. (अपीलाथ\u0007/Appellant) (\b यथ\u0007/Respondent) अपीलाथ की ओर से/ Appellant by : Shri S.Sridhar, Advocate (Erode) KLथ की ओर से /Respondent by : Shri R. Raghupathy, Addl. CIT सुनवाई की तारीख/Date of Hearing : 20.11.2025 घोषणा की तारीख /Date of Pronouncement : 04.12.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2018-19 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 07.07.2025 in the matter of assessment framed by the Assessing Officer [AO] u/s. 147 r.w.s 144B of the Income-tax Act,1961 (hereinafter “the Act”) dated 07.03.2024. Printed from counselvise.com ITA No.2674/Chny/2025 K 1247 Thalakkarai PACCS :- 2 -: 2. The assessee is a cooperative credit society and has not filled the return of income. The A.O reopened the assessment by issing notice u/s 148 on 01.04.2022 as the assessee has made huge cash deposits of Rs. 3,77,90,088/-, but has not filed return of income. The assessee filled return of income in response to notice u/s 148 on 14.0.2023. The A.O in the assessment order has made the addition in total income by disallowing claim of deduction u/s. 80P of the Act of Rs. 17,04,390/- and further disallowance of interest income of Rs. 34,95,714/-. On appeal, the Ld. CIT(A) has confirmed the disallowances on the claim of deduction u/s. 80P(2)(a)(i) of the Act, but deleted the addition of Rs. 34,95,713/- as double disallowances. 3. At the outset, the Ld. Authorized Representative (A.R) of the assessee has submitted that the assessment was reopened by issuing notice u/s. 148 of the Act on 01.04.2022 by Jurisdictional Assessing Officer (hereinafter “JAO”) and the assessee has taken a specific ground before the Ld. CIT(A) in Ground No.2 challenging the reopening in violation of Section 151A of the Act, but the Ld. CIT(A) has not adjudicated. The Ld. AR therefore requested that the matter Printed from counselvise.com ITA No.2674/Chny/2025 K 1247 Thalakkarai PACCS :- 3 -: may be remanded back to the file of Ld. CIT(A) to decided the above ground. 4. On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities. 5. We have heard the rival submissions, and perused the materials available on record. The assessment in this case has been reopened by issuing notice u/s 148 of the Act on 01.04.2022 by the J.A.O. The assessment order has been passed by the Faceless Assessing Officer (hereinafter “FAO”) u/s 147 of the Act on 07.03.2024. The Honorable jurisdictional High Court in the case of TVS Credit Service Ltd vs. DCIT in WP No 22402 of 2024 & WMP No 13336 of 2023 on the issue of reassessment notice issued by the J.A.O after March 29, 2022 has held as under : “2. Learned Single Judge in order dated 20.12.2024 in WP Nos.25223 of 2024 held that it does not matter if the Jurisdictional Assessing Officer (JAO) issues the notice and it is not mandatory that it should be issued by the Faceless Assessment Officer (FAO). Another learned Single Judge in order dated 21.04.2025 in WP No.22402 of 2024 and batch cases, followed what was held by the Bombay High Court in Hexaware Technologies Ltd vs. Assistant Commissioner of Income Tax'; and opined that it was mandatory for the FAO to issue notice and issuance of notice by JAO would make the notice invalid. 3. Learned Single Judge thereafter directed the matter to be placed before the Chief Justice for constituting a Division Bench to Printed from counselvise.com ITA No.2674/Chny/2025 K 1247 Thalakkarai PACCS :- 4 -: consider the divergent views. It is, therefore, all these matters were listed before us today. 4. We follow the law as laid down in Hexaware Technologies Ltd (supra), the said judgment was authored by one of us (Chief Justice), that it is mandatory for the FAO to issue the concerned notices and issuance thereof by the JAO would make the notice invalid. 5. Counsels for assessees are ad idem that the law as laid down in Hexaware Technologies Ltd (supra) will apply. Learned Additional Solicitor-General, however, submits that the Revenue does not accept the law as laid down in Hexaware Technologies Ltd (supra); and that there is a special leave petition filed against the order and judgment in Hexaware Technologies Ltd (supra) and the same is expected to be taken up after the Supreme Court reopens. 6. Admittedly, learned Additional Solicitor-General, in fairness, states that there is no stay. Therefore, the law as laid down by Hexaware Technologies Ltd (supra) applies. 7. It is clarified that if the Apex Court reverses the judgment of Hexaware Technologies Ltd (supra), parties will be governed by the decision of the Apex Court. 8. Keeping open all rights and contentions of parties, including liberty to apply to this Court, in case the Revenue succeeds before the Apex Court, for revival of these petitions, the notices issued in these petitions are quashed and set aside. 9. In these petitions, apart from the issue of notices issued by JAO instead of FAO, all or many of the issues which were considered in Hexauxare Technologies Ltd (supra) are involved. 10. To the extent the issues raised in Hexaware Technologies Ltd (supra) are not covered, those are kept open to be raised at the appropriate stage. 11. With the liberty as noted above, all petitions stand disposed of holding in favour of assessees. There will be no order as to costs. Consequently, the interim applications also stand disposed of.” 6. Therefore, respectfully following the decision of the Hon’ble jurisdictional High Court, supra, we set aside the impugned notice Printed from counselvise.com ITA No.2674/Chny/2025 K 1247 Thalakkarai PACCS :- 5 -: u/s.148 of the Act and consequential orders thereof. However, in the light of the Para No.8 of the judgment of the jurisdictional High Court, we also keep open of rights and contentions of parties including liberty to approach this bench, in case, the Revenue succeeds before the Apex Court for revival of this appeal. 7. In the result, the appeal filed by the assessee is allowed. Order pronounced on 04th day of December, 2025 at Chennai. Sd/- Sd/- (एबी टी. वक ) (ABY. T. Varkey) \u0011ाियक सद\" / Judicial Member (जगदीश) (Jagadish) लेखा सद\" /Accountant Member चे\u0010नई/Chennai, \u0013दनांक/Dated: 04th December, 2025. EDN, Sr. P.S आदेश क\u0016 \bितिल\u0019प अ\u001aे\u0019षत/Copy to: 1. अपीलाथ\b/Appellant 2. थ\b/Respondent 3. आयकर आयु\u0010/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय ितिनिध/DR 5. गाड\u0019 फाईल/GF Printed from counselvise.com "