PARAPPATTU P A C C S LTD Y 58,KANYAKUMARI V. THE INCOME TAX OFFICER, WARD 1 NAGERCOIL, NAGERCOIL

ITA 141/CHNY/2025

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The case involves Parappattu PACCS Ltd, the appellant, contesting the orders of the Income Tax Officer and the Commissioner of Income Tax (Appeals) regarding the assessment year 2019-20. The primary issues were the additions made to the assessee's income due to unexplained cash deposits amounting to Rs. 2,83,93,869 during the demonetization period and the denial of deduction under section 80P of the Income Tax Act. The Tribunal noted that the assessee did not file a return of income under section 139 and failed to provide adequate documentation to substantiate the source of the cash deposits. The Tribunal also addressed the procedural aspects concerning the filing of returns and claims for deductions under section 80P, emphasizing the mandatory requirement to file a return under section 139 to be eligible for such deductions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708149 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2019-2020
• Other Referred Cases: 322 ITR 283, 123 taxmann.com 161, 152 taxmann.com 347
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BIPIN C.N
• Assessee Lawyers: M.KARUNANDHAM
• Keywords: Opportunity of being heard; Corroborative evidences
• Section: 147; 139; 246

Judgement Text

" आयकर अपीलीय अधिकरण, ’सी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI माननीय श्री मनु क ुमार धिरर ,न्याधयक सदस्य एवं माननीय श्री अमिताभ शुक्ला, लेखा सदस्य क े सिक्ष BEFORE HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND HON’BLE SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.141/Chny/2025 Assessment Years: 2019-20 Parappattu PACCS Ltd Y 58, No.11-65/3, Alvaar Nagar, Manavalakurichi S.O, Kalkulam, Kanyakumari, Tamil Nadu-629 252. [PAN : AABTP9691H] The Income Tax Officer, Ward-1, Nagercoil. (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr.M.Karunandham, Advocate प्रत्यर्थी की ओर से /Revenue by : Mr.Bipin C.N, CIT सुनवाई की तारीख/Date of Hearing : 18.06.2025 घोषणा की तारीख /Date of Pronouncement : 18.07.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA / NFAC / S / 250 / 2024-25 / 1070613305(1) dated 25.11.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Centre(NFAC), Delhi, for the assessment year 2019-20. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time. ITA No.141/Chny/2025 Page - 2 - of 7 2.0 At the outset, the Ld.Counsel for the assessee submitted that both the lower authorities viz the Ld.AO and the Ld.CIT(A) have passed ex-parte orders depriving the assessee of a fair opportunity of being heard. As regards the issue of unexplained cash deposits, it was submitted that the appellant assessee was facing technical challenges in uploading electronically, before the Ld.AO, its voluminous cash book and other supporting documents, given the file size restriction of 50 MB. It was argued that the inability to upload should not be taken as non- availability of the requisite documents with the assessee. The Ld. Counsel argued that it is prepared to produce its books of accounts comprising cash books etc to establish genuineness of its cash deposits, now before the Ld.AO. On the issue of denial of deduction u/s 80P, the Ld.Counsel for the assessee submitted that invocation of section 80AC of the Act was premature in its case. It was argued that Revenue has acquired authority to make any interference with the return of income u/s 143(1) only w.e.f. 1.4.2021 for and from AY-2021-22 and that therefore denial of deduction u/s 80P was unwarranted. 3.0 The Ld. DR relied upon the order of lower authorities. It was submitted that the assessee’s conduct has been totally wanting. Explaining brief factual matrix of the case, the Ld.DR submitted that the Ld.AO has made two additions to the returned income. It was stated that no return of income u/s 139 of the Act was filed by the assessee. ITA No.141/Chny/2025 Page - 3 - of 7 Revenue learnt of cash deposits of Rs. 2,49,00,000/- in the Kanyakumari CCB Bank Ltd and therefore proceedings u/s 147 were initiated. Thus an addition of Rs.2,83,93,869 was made on account of unexplained cash deposits during the demonetization period u/s 69A r.w.s. 115BBE. The Ld.AO further made disallowance of Rs.16,87,101 u/s 80P of the Act. It was stated that the Ld.AO was compelled to pass an ex-parte order as the assessee did not respond to the opportunities given by him. The Ld.DR informed that cash deposits of Rs.2,83,93,869/- was found in assessee’s bank account maintained with Kanyakumari CCB Bank Ltd. The Ld.AO had given various opportunities to the assessee to furnish sources of the said cash which was deposited in the bank during demonetization period, inter-alia, fund flow statement, cash book. In response the assessee did not submit any details. Based upon information received from Kanyakumari CCB Bank Ltd, the Ld.AO made addition of Rs.2,83,93,869/-. As regards assessee’s claim of deduction u/s 80P, the Ld.AO noted that since no return of income u/s 139(1) was filed provisions of section 80AC and 80A(5) were attracted. Accordingly, the Ld.AO denied the impugned addition. The Ld. DR further informed that the assessee once again chose to remain non-compliant to the statutory notices of the Ld.CIT(A). It was submitted that the cash deposits represent loan repayments of principal and interest amount taken by the members as well as sale of essential commodities under the ITA No.141/Chny/2025 Page - 4 - of 7 public distribution system. The Ld. DR drew attention to the para 6.1 to 6.6 of the appellate order wherein it was abundantly stated that the assessee had not placed on record any supporting evidence to support its hypothesis of cash deposits having nexus with amounts returned by members. No books of accounts, cash book etc were produced. As regards the disallowance of the deduction u/s 80P, the Ld.CIT(A) confirmed the Ld.AO’s findings holding that it is mandatory to file return u/s 139 so as to be entitled for claim of deduction u/s 80P else section 80AC becomes operative. In support of its decision, the Ld. CIT(A) placed reliance upon a catena of judgements pronounced by Hon’ble Supreme Court as at 322 ITR 283 and 123 taxmann.com 161, Hon’ble Kerala High Court as at 152 taxmann.com 347 as well as those delivered by Coordinate Benches of ITAT Mumbai and Bangalore. The Ld. DR therefore argued in favour of the order of lower authorities. 4.0 We have heard rival submissions in the light of material available on records. It is an admitted and undisputed fact on records that the appellant had not made any satisfactory compliance before the lower authorities leading to impugned additions. As regards the grounds of appeal concerning addition of an unexplained cash deposits, we have noted that the lower authorities have provided sufficient opportunities to the appellant before arriving at their conclusions. We have also noted that before us also apart from making a bald statement of violation of its ITA No.141/Chny/2025 Page - 5 - of 7 natural rights, the appellant has failed to provide even an iota of any evidence to suggest truthfulness of its statements. It is the case of the assessee that it is in possession of all the books of accounts, cash book and other documents to support veracity of cash deposits. The fact of the matter remains that not even shred of paper has been brought on records. The Ld. Counsel for the assessee merely read from some loose sheets of paper arguing its case. No evidence in the form of any books of accounts, cash book, confirmations and or of the nature referred by Ld.CIT(A) in para 6.3 to 6.5 of his order has been produced before us so as to believe upon the truthfulness of assessee’s statements. Accordingly, we are of the considered view that no case of any intervention to the order of the Ld.CIT(A) is made out at this stage. We therefore sustain the order of the Ld.CIT(A) and dismiss all the grounds of appeal raised by the assessee on this issue. As regards the grounds of appeal concerning, denial of deduction u/s 80P we find force in the argument of the Ld.CIT(A) in confirming the Ld.AO’s findings that provisions of section 80AC get attracted qua claim of any deduction, in cases where returns of income are filed beyond timelines prescribed u/s 139(1). Through its grounds of appeal the appellant has contested that the Revenue has acquired authority to make adjustments u/s 143(1) only from AY-2021-22 and that therefore the impugned disallowance cannot be made for present year being AY-2019-20. The arguments of the ITA No.141/Chny/2025 Page - 6 - of 7 assessee has been carefully considered. It is trite law that wherever provisions of the statute are unambiguously clear no interpretation thereof is required to be made. Section 80 AC clearly mandates that to claim beneficial deductions, return of income u/s 139 (1) ought to be filed. The arguments of the assessee qua additions u/s 143(1) have also been considered. Apparently, the assessee claims that impugned disallowance could not have been made u/s 143(3). If that be so than the assessee ought to have contested the order u/s 143(1) through which the impugned disallowance u/s 80 P was made. As per present scheme of appellate proceedings, order u/s 143(1) are separately appealable u/s 246 before the Ld.First Appellate Authority. Accordingly, we are again of the considered view that no case of any intervention to the order of the Ld.CIT(A) is made out at this stage. We therefore sustain the order of the Ld.CIT(A) and dismiss all the grounds of appeal raised by the assessee on this issue regarding the denial of deduction u/s 80P. 5.0 In the result, the appeal of the assessee is dismissed. Order pronounced on 18th July-2025 at Chennai. Sd/- (मनु क ुमार धिरर) (MANU KUMAR GIRI) न्याधयक सदस्य / Judicial Member Sd/- (अधमताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदनांक/Dated: 18th July-2025. KB/- ITA No.141/Chny/2025 Page - 7 - of 7 आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai/Coimbatore/Madurai/Salem. 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF "