KOLHAPUR ZILHA VANKHATE KARMACHARI SAHAKARI PATH SANSTHA MARYADIT,KOLHAPUR V. THE INCOME TAX OFFICER, WARD-2(1), KOLHAPUR

ITA 1945/PUN/2024

AI Insights

The case involves Kolhapur Zilha Vankhate Karmachari Sahakari Path Sanstha Maryadit, a cooperative credit society, appealing against the orders of the National Faceless Appeal Centre (NFAC), Delhi, and the Income Tax Officer (ITO), Ward 2(1), Kolhapur. The appeal pertains to the assessment year 2018-19, where the assessee contested the ex parte dismissal of their appeal and the addition of Rs. 3,03,43,941 under section 69A of the Income Tax Act, 1961, which was deemed as unexplained cash deposit. The Tribunal found procedural lapses in the dismissal of the assessee's appeal and the acceptance of additional evidence, leading to the decision to remit the case back to the JAO for a comprehensive reassessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361054 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMOL KHAIRNAR
• Assessee Lawyers: DHIRAJ S DANDGAVAL
• Keywords: Set aside; Additional evidence; Reasonable cause; Principle of natural justice
• Section: 147; 148; 144; 142(1)

Judgement Text

"आयकर अपीलीय अधिकरण \"ए\" न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1945/PUN/2025 धििाारण वर्ा / Assessment Year: 2018-19 Kolhapur Zilha Vankhate Karmachari Sahakari Path Sanstha Maryadit, Basement No. B5 Geet Govind Residency, Nr Geeta Mandir Kawala Naka, Kolhapur-416003 Maharashtra PAN-AADAK8661R Vs ITO Ward 2(1), Kolhapur Appellant Respondent Assessee by : Shri Dhiraj S Dandgaval Revenue by : Shri Amol Khairnar CIT DR Date of hearing : 15.05.2025 Date of pronouncement : 21.05.2025 आदेश/ORDER PER DR.MANISH BORAD, ACCOUNTANT MEMBER : This appeal at the instance of assessee pertaining to the A.Y. 2018-19 is directed against the order passed by the National Faceless Appeal Centre (NFAC), Delhi u/s 250 of the Income Tax Act, 1961 dated 23.07.2024 which in turn is arising out of order u/s 147 r.w.s. 144 dated 23.03.2023. 2. Assessee has raised following grounds of appeal:- 1. Learned CIT (A) has erred in fact and in law and in the circumstances of the case in dismissing the appeal without considering and admitting the additional evidences merely on the ground that, there is no accompanying petition of Rule 2 ITA No.1945/PUN/2025 46A of the IT rules 1962. Ergo the order of CIT (A) is against principle of natural justice and be quashed. 2. On the facts and in the circumstances of the case and in law the lower authorities have erred in dismissing the appeal ex parte without giving proper opportunity of hearing and the act being in violation of principle of natural justice, it is prayed that appeal may kindly be restored back to lower authorities for readjudication/reconsideration 3. On the facts and in the circumstances of the case and in law the lower authorities have erred in dismissing the appeal ex parte without giving proper opportunity of hearing and the act being in violation of principle of natural justice, it is prayed that appeal may kindly be restored back to lower authorities for readjudication/reconsideration 4. Learned CIT (A) has erred in fact and in law and in the circumstances of the case in confirming addition made by A.O. U/S. 69A of Rs.3,03,43,941/- despite the fact that, the cash deposit is made out of cash collection made from members of appellant society on a/c of loan repayment, saving a/c deposits, saving recurring deposit etc and all members of the appellant society are State Gov. employees and the identity of members and their sources are fully verifiable. Ergo the assessment made is contrary to the facts and perverse and patently illegal and be deleted. 5. Appellant craves to leave, add new ground or amend, alter, change, modify any or all of the above ground of appeal. 3. At the outset Ld. Counsel for the assessee submitted that the Ld. CIT(A) has dismissed the appeal of the assessee in Limine by not accepting the additional evidence filed by the assessee solely for non submission of petition of the appellant under rule 46A of the Income Tax rules 1962. He further prayed that even the order of the Ld. AO is the best assessment judgement u/s 144 of the Act and therefore the grounds raised on merits may be restored back to the file of Ld. AO for denovo adjudication. On the other hand Ld. DR supported the orders of both the lower authorities. 4. We have heard rival contentions and perused the record placed before us. We observe that the appellant is a co- operative credit society engaged in providing credit facilities to 3 ITA No.1945/PUN/2025 its members. It is also stated that all its members are employees of Government of Maharashtra working with forest department. Information received by the AO through inside portal under NMS that cash of Rs. 3,03,43,941/- has been deposited during F.Y. 2017-18 in the assessee’s Bank Account held with Rajarshi Shahu Government Servants Co-operative Bank Ltd., Kolhapur. The assessee had not filed regular return of income. The notice issued u/s 148 and 142(1) of the Act were not responded by the assessee as a result of which Ld. AO proceeded for best judgement assessment u/s 144 of the Act and made an addition for unexplained deposit/money u/s 69A of the Act at Rs. 3,03,43,941/- and assessed the income at the very same amount. 5. We however notice that the assessee after preferring the appeal before Ld. CIT(A) furnished the details for the cash received from customers of the society. It also submitted that the cash deposits in bank account of the assessee during the year is only Rs. 52,92,050/- and the balance amount of Rs. 2,50,51,891/- is through banking channel but Ld. AO made addition for total credit during the year alleging them to be unexplained cash. The details of the bank account alongwith cash book of the society, profit and loss and balance sheet were filed. However Ld. CIT(A) did not admit these additional evidences solely for lack of accompanying petition of the Appellant under rule 46A of the Income Tax Rules 1962 and dismissed the assessee’s appeal in Limine. In our view Ld. CIT(A) ought to have given the opportunity to the assessee to furnish the application u/s 46A prior to dismissing the appeal in limine. The action of Ld. CIT(A) is hyper technical and the approach is not judicial. 4 ITA No.1945/PUN/2025 6. We also notice that the assessment order is the best judgement assessment and the assessee could not file the details and even if we set aside the issues raised on merits to the file of Ld. CIT(A) for admitting additional evidence then also CIT(A) will have to call for the remand report from the Jurisdictional Assessing Officer (JAO). Under these given facts and circumstances we in the larger interest of justice and being fair to both the parties, deem it appropriate to remit all the issues raised on merits to the file of Ld. JAO for denovo assessment proceedings and the same shall be carried out after affording reasonable opportunity of hearing to assessee alongwith fair opportunity of furnishing all the relevant details including those which have been filed before the first appellate authority as additional evidence. Assessee shall also update latest e-mail id and contact details on the income tax portal and refrain from taking unnecessary adjournment unless otherwise required for reasonable cause. Effective grounds of appeal raised by the assessee are allowed for statistical purposes. 7. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on this 21st day of May, 2025. Sd/- Sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ Pune; दििांक / Dated: 21st May, 2025. Neeta आिेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 5 ITA No.1945/PUN/2025 3. The Pr. CIT concerned. 4. धवभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, \"ए\" बेंच, पुणे / DR, ITAT, \"A\" Bench, Pune. 5. गार्ा फाइल / Guard File. आिेशािुसार / BY ORDER, Senior Private Secretary आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune. "