KUMAR CO-OP CREDIT SOCIETY LIMITED,MUMBAI V. ITO, WARD-24(2)(1), MUMBAI

ITA 1590/MUM/2025

AI Insights

The case involves Kumar Co-op Credit Society Limited appealing against the order of the National Faceless Appeal Centre (NFAC), which was passed under section 250 of the Income Tax Act, 1961 for the Assessment Year 2019-20. The primary contention was the ex-parte order passed by the CIT(A), which the appellant argued violated the principles of natural justice. Additionally, the appellant contested the addition of Rs. 6,41,22,545 under section 69A of the Income Tax Act, claiming it was based on unsubstantiated evidence and without proper consideration of their submissions. The Tribunal noted procedural lapses, particularly the failure to receive notices due to an incorrect email, and thus allowed the appeal, directing a re-assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713252 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2019-2020
• Other Referred Cases: DEPUTY DIRECTOR OF INCOME TAX (E) INV. CIRCLE-II vs. PETROLEUM SPORTE PROMOTION BOARD, Asst. Commissioner of income tax, Central Circle-1, Visakhapatnam vs. Heerapanna Jewellers
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: VIJAY SHAH
• Keywords: Set aside; Business income; Opportunity of being heard; Principle of natural justice
• Section: 147; 148

Judgement Text

"आयकर अपीलीय न्यायाधिकरण न्यायपीठ, म ुंबई| IN THE INCOME-TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER आयकर अपील सुं./ITA No. 1590/MUM/2025 (नििाारण वर्ा / Assessment Year: 2019-20) Kumar Co-op Credit Society Limited Dhanraj Mansion M.P. Lane J.P. Road, Andheri (W), Mumbai 400058 v/s. बिाम Income Tax Officer, Ward 24(2)(1), Mumbai Piramal Chamber, Mumbai 400012 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAEAK7513M Appellant/अपीलार्थी .. Respondent/प्रनिवादी निर्ााररती की ओर से /Assessee by: Shri Vijay shah राजस्व की ओर से /Revenue by: Shri Hemanshu Joshi, SR DR स िवाई की िारीख / Date of Hearing 08.07.2025 घोर्णा की िारीख/Date of Pronouncement 31.07.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi 03.09.2024 passed u/s. 250 of Income Tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year: 2019-20. 2. The assessee has raised the following grounds in this appeal. “Ground No. I-Principle of natural Justice- Ex-parte order: 1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in passing the ex-parte order in gross violation of principles of natural justice, without providing an opportunity of being heard and without considering the submission and documentary evidence filed by the appellant. Printed from counselvise.com P a g e | 2 ITA No. 1590/Mum/2025 AY 2019-20 Kumar Co-op Credit Society Limited 2. The Appellant prays that the order passed by the CIT(A) be treated as passed in gross violation of principles of natural justice and as such the same be treated as illegal, bad in law, null and void. Ground no. 2- On the facts and in the circumstances of the case and in law the learned Assessing Officer has erred in making an addition of Rs. 6,41,22,545/- under section 69A of Income Tax Act, 1961 without appreciating the explanations and submissions made by the appellant. The appellant craves to leave, to add, to alter or modify the grounds of appeal, as stated above, at any time on or before the hearing of appeal.” 3. The assessee has subsequently taken the following additional grounds: “1. On the facts and circumstances of the case and in la, the learned assessing officer has erred in making addition of Rs. 6,41,22,545/- on the basis of paper collected behind the back of the assessee and without parting with the assessee which is against the principle of the natural justice, therefore the order passed is bad in law and it should be set aside. 2. On the facts and circumstances of the case and in law, the appellant slates that the learned assessing officer has erred in law and fact without allowing the incurred by the assessee to earn the income. The assessing officer has treated gross receipt as the income without allowing expenses incurred by the appellant, the appellant is relying on the case of \"DEPUTY DIRECTOR OF INCOME TAX (E) INV. CIRCLE-II” “PETROLEUM SPORTE PROMOTION BOARD ( Ita No.262/2013, No. 264/2013 and Ita No. 265/2013. 3. The learned assessing officer has erred in law and fact in taxing the income u/s. 69A as against treating the gross receipt as a business receipt. The appellant has received all the cash and other deposits in the course of the business, therefore the income should be taxable at the normal tax rate. The appellant is relying on the case of “Asst. Commissioner of income tax, Central Circle-1, Visakhapatnam” vs. “Heerapanna Jewellers” as per ITA NO. 253/Vis/2020. 4. The Appellant also prays that the order of the assessing officer should be set aside after giving the specific instructions for considering the ground no. 2 & 3 in the order”. 4. Brief facts of the case are that the assessee had not filed its return for AY 2019-20. However, information available on the INSIGHT portal of the department revealed that the assessee had received cash deposits in its current account amounting to Rs. 6,03,04,692/- during the FY 2018-19. Accordingly, a notice u/s 148 of the Act, was issued to the assessee on 31.03.2023. In the Printed from counselvise.com P a g e | 3 ITA No. 1590/Mum/2025 AY 2019-20 Kumar Co-op Credit Society Limited absence of any explanation in response to various notices issued, Ld. AO proceeded to finalise the assessment u/s. 147 r.w.s. 144 of the Act after making an addition of Rs. 6,41,22,545/- u/s. 69A of the Act. Aggrieved with the order of Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). Since no compliance was made in response to notices issued by Ld. CIT(A), he dismissed the assessee’s appeal on the ground that it had failed to substantiate its claim regarding source of deposits. The assessee has now filed an appeal against the order of CIT(A) before the Tribunal. Before us, Ld. AR has submitted that the email on which the notices were issued was incorrect and therefore, no compliance could be made during the assessment proceedings. The assessee has now provided correct email and has requested for providing one more opportunity to explain the sources of deposits before the Ld. AO. Ld. DR has not objected to the above proposition. 5. After hearing the rival submissions and considering the details made available before us, in the interest of justice, we deem it appropriate to restore the matter to the Ld. AO for a decision afresh on merits after providing due opportunity to the assessee. The assessee is also directed to make requisite compliance before the Ld. AO. 6. In the result, appeal of the assessee is allowed for the statistical purposes. Order pronounced in the open court on 31.07.2025. Sd/- Sd/- ANIKESH BANERJEE RENU JAUHRI (न्यानयक सदस्य/JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER) Printed from counselvise.com P a g e | 4 ITA No. 1590/Mum/2025 AY 2019-20 Kumar Co-op Credit Society Limited Place: म ुंबई/Mumbai दिन ुंक /Date 31.07.2025 दिव्य रमेश न ुंिग वकर/ स्टेनो आदेश की प्रनतनलनि अग्रेनित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यानित प्रनत //True Copy// आदेशािुसार/ BY ORDER, सहायक िंजीकार (Asstt. Registrar) आयकर अिीलीय अनर्करण/ ITAT, Bench, Mumbai. Printed from counselvise.com "