KODAIKANAL CO-OPERATIVE URBAN BANK LTD.,DINDIGUL V. DCIT, NCC-2, MADURAI

ITA 1503/CHNY/2025

AI Insights

The case involves The Kodaikanal Cooperative Urban Bank Ltd, which appealed against the order of the Commissioner of Income Tax (Appeals) that dismissed their appeal against an assessment order. The assessment added substantial amounts to the bank's income, citing unexplained cash deposits. The bank argued that these deposits were part of its normal banking business. The Tribunal, considering the principles of natural justice and the non-responsiveness of the assessee to previous notices, decided to give the bank another opportunity to present its case and substantiate the source of the deposits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793020 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 26-05-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. RAGHUPATHY
• Assessee Lawyers: A. VENKATESH
• Keywords: Set aside; Principle of natural justice

Judgement Text

" आयकर अपीलीय अिधकरण, ‘ए ’ \u000eा यपीठ, चे\u0013ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI \u0015ी एबी टी वक\u0019, \u000eा ियक सद एवं \u0015ी एस. आर. रघुना था , लेखा सद क े सम$ BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 1503/Chny/2025 िनधा %रण वष% / Assessment Year: 2017-18 The Kodaikanal Cooperative Urban Bank Ltd, No. (49/A), 22/20, Anna Salai Kodaikanal, Dindigul – 624 101. Tamil Nadu. vs. DCIT, Non Corporate Circle -2, Madurai. [PAN: AADAK-8837-B] (अपीला थ\u0019/Appellant) ('(थ\u0019/Respondent) अपीला थ\u0019 की ओर से/Appellant by : Mr. A. Venkatesh, Advocate '(थ\u0019 की ओर से/Respondent by : Mr. R. Raghupathy, Addl.CIT सुनवा ई की ता रीख/Date of Hearing : 06.08.2025 घोषणा की ता रीख/Date of Pronouncement : 22.09.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER: This appeal is filed by the assessee against the order dated 24.03.2025 passed by the Commissioner of Income Tax(Appeals) (hereinafter referred to as “CIT(A))”, dismissing the appeal filed by the assessee against the assessment order dated 23.09.2021 passed u/s.147 r.w.s.144 r.w.s.144B of the Income Tax Act, 1961 (hereinafter referred to as the “Act”). 2. The assessee is an Urban Co-operative Bank duly registered with the RBI. For the Assessment Year 2017-18, the return of income was filed on 19.03.2018 and a loss of Rs.11,31,241/- was declared. Thereafter, the case Printed from counselvise.com 2 ITA No.1503/Chny/2025 was reopened by way of a notice dated 26.09.2019 u/s.148 of the Act and the assessment was completed by making an addition of (a) Rs.47,00,000/- u/s.69A of the Act being cash deposited in Dindigul Central Co-operative Bank Limited and (b) Rs.99,28,000/- u/s.69A of the Act being cash deposited in the Indian Bank and a demand of Rs.2,05,41,263/- was raised. Before the Assessing Officer(AO), the assessee contended that these cash deposits were made in the course of its banking business. 3. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the ld.CIT(A) and submitted the statement of accounts. The ld.CIT(A) remanded the matter to the file of the AO and sought for a remand report after examining the evidence filed by the assessee and calling for such other information and documents as required by the AO to verify the issues raised by the assessee. The AO issued a letter dated 14.08.2024 calling for various records and documents. Since the assessee did not respond to the letter, the AO finalised the remand report and held that the assessee did not explain the nature and source of the cash deposits made by it. The remand report was also forwarded to the assessee for its comments, but it met with no response. Later the ld.CIT(A) passed an order dated 24.03.2025 dismissing the appeal of the assessee. Aggrieved by the order of the ld.CIT(A), the assessee is in appeal before us. 4. Before us, the Ld.AR of the assessee submitted that the source for the cash deposited in the banks is from its banking business and prayed that the matter may be remitted to the AO to explain its case with documentary evidence. The Ld.AR also submitted that voluminous records need to be produced below. The Ld.AR, thus, prayed for one more opportunity before the AO. 5. Per contra, the Ld. DR supported the orders passed by the ld.CIT(A) and AO and argued that the assessee remained non-responsive before the lower Printed from counselvise.com 3 ITA No.1503/Chny/2025 authorities, despite the multiple opportunities granted to it and thus prayed that the appeal of the assessee may be dismissed. 6. We have heard the rival submissions and perused the materials on record and gone through the orders of the lower authoriites. Though, the assessee had largely remained non-responsive to the various notices issued by the AO and the ld.CIT(A), keeping in mind the principles of natural justice, we deem it fit to afford one more opportunity to the assessee to substantiate its case. Therefore, we set aside the assessment order and restore the assessment back to the file of the jurisdictional Assessing Officer for de novo assessment, with a direction to the assessee to substantiate its case. We direct the AO to appear before the JAO as and when called upon and furnish the relevant records and documents in support of the claims made without seeking unnecessary adjournments. 7. In the result the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 22nd September, 2025 at Chennai. Sd/- Sd/- (एबी टी वक\u0019 ) (ABY T VARKEY) \u000eाियक सद /JUDICIAL MEMBER (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखासद /ACCOUNTANT MEMBER चे\u0013ई/Chennai, िदनांक/Dated, the 22nd September, 2025 RL आदेश की 'ितिलिप अ-ेिषत/Copy to: 1. अपीलाथ\u0019/Appellant 2. '(थ\u0019/Respondent 3.आयकर आयु./CIT – Coimbatore 4. िवभागीय 'ितिनिध/DR 5. गाड% फाईल/GF Printed from counselvise.com "