SHRI CHHATRAPATI SAHAKARI SAKHAR KHARKHANA LIMITED,PUNE V. ACIT CIRCLE-7, PUNE

ITA 121/PUN/2025

AI Insights

The case involves Shri Chhatrapati Sahakari Sakhar Karkhana Ltd., a cooperative society engaged in sugar manufacturing, which appealed against the order of the CIT(A) pertaining to the Assessment Year 2016-17. The primary issue was the addition of Rs.1,22,15,616 to the assessee's income as undisclosed cash credit under section 68 of the Income Tax Act, following a reassessment. The assessee's failure to comply with notices during the appellate proceedings led to the dismissal of their appeal by the CIT(A) for non-prosecution. The Tribunal found that the CIT(A) had not adequately addressed the merits of the case and thus set aside the CIT(A)'s order, remanding the case for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705808 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Other Referred Cases: CIT Vs. B.N. Bhattarcharjee and Another, 118 ITR 461 (SC)
• Laws Referred To: Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P. MURKUNDE
• Assessee Lawyers: HANMANT DATTATRAY DHAVALE
• Keywords: Set aside; Opportunity of being heard; Reassessment proceedings; Unexplained cash credit; Income from undisclosed sources; Co-operative Credit Society
• Section: 147; 148; 143(3); 142(1); 68; 131

Judgement Text

" आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.121/PUN/2025 धििाारण वर्ा / Assessment Year : 2016-17 Shri Chhatrapati Sahakari Sakhar Karkhana Ltd., A/p. Bhavaninagar, Tal.-Indapur, Dist.-Pune-413104 PAN : AAAAS3869G Vs. ACIT, Circle – 7, Pune अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Hanmant Dattatray Dhavale Department by : Shri Ramnath P. Murkunde Date of hearing : 19-06-2025 Date of Pronouncement : 30-06-2025 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 23.12.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Year (“AY”) 2016-17. 2. Briefly stated, the facts of the case are that the assessee is Co- operative Society engaged in the business of manufacturing and sale of sugar. For AY 2016-17, the assessee filed its original return declaring total income at Rs. 13,26,79,263/- on 16.10.2016. The original assessment was completed on 24.12.2018 under section 143(3) of the Act assessing the income at Rs. 22,23,23,403/-. Subsequently, the case of the assessee was reopened by initiating reassessment proceedings under section 148 of the Act vide notice dated 21.06.2021. Accordingly, statutory notice(s) under section 143(2) and 142(1) of the Act were issued and served upon the assessee, however, the assessee failed to respond. A final show cause notice was then issued to the assessee on 27.03.2024 in response to which the assessee filed its reply on 10.04.2023 which is reproduced in para 3.4 and 3.5 of the impugned reassessment order. The submissions made by 2 ITA No.121/PUN/2025, AY 2016-17 the assessee were not found to be acceptable by the Ld. AO and he completed the reassessment on 25.05.2023 u/s 147 r.w.s. 144B of the Act by making an addition of Rs.1,22,15,616/- to the income originally assessed under section 143(3) treating it as assessee’s income from undisclosed sources/unexplained credit under section 68 of the Act by observing as under : “3.8 Conclusion drawn: The submissions made by the assessee society have been considered but not acceptable since during the year under consideration i.e. A.Y. 2016- 17, M/s Shree Chhatrapati Sahakari Sakhar Karkhana Ltd has first deposited cash of Rs.1,22,15,616/- into the M/s Dyaneshwari Multi State Urban Co-operative Credit Society Limited and then transferred to the assessee's bank account through RTGS. Shri Akhilesh Madhusudan Joshi, Shri Sunil Bhiwa Kamble in their statements recorded u/s. 131 of the Act also accepted that the M/s Dyaneshwari Multi State Urban Co-operative Credit Society Limited was mainly used as a course for placement of unaccounted cash into the banking system. On perusal of the bank account statement of Union Bank of India bearing account no. 41750101002901 submitted by the assessee, it is evident that the society has received an amount of Rs.1,22,15,616/- through RTGS from M/s Dyaneshwari Multi State Urban Co-operative Credit Society Limited during the FY 2015-16 by the above assessee which was first deposited by the assessee in M/s Dyaneshwari Multi State Urban Co- operative Credit Society Limited. For the reasons stated above, investigation made and in view of the above discussion, the amount of Rs. 1,22,15,616/- is treated as undisclosed cash credit in the hands of the assessee Shree Chhatrapati Sahakari Sakhar Karkhana Ltd. which was not offered for taxation as per the provision of Income-tax. Therefore, the unexplained cash credits of Rs. 1,22,15,616/- is brought to tax for the A.Y. 2016-17 u/s. 68 of the I.T. Act, by making addition to the total income of the assessee and the assessment is completed as mentioned above.” 3. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A)/NFAC. Before the Ld. CIT(A)/NFAC there was non-compliance of notice(s) of hearing. The Ld. CIT(A)/NFAC confirmed the impugned addition made by the Ld. AO and dismissed the appeal of the assessee for non- prosecution observing that the assessee has failed to submit any details/explanation in the course of appellate proceedings before him to rebut the findings made by the Ld. AO. 4. Dissatisfied, the assessee is in appeal before the Tribunal raising the following grounds of appeal : “1. On the facts and in the circumstances of the case and in the law of the learned NFAC Commissioner of Income Tax (Appeals) Delhi, has erred in disallowing and added back an amount of Rs.1,22,15,616/- on account of Addition made on account of unexplained credit u/s 68 by the assessee. 3 ITA No.121/PUN/2025, AY 2016-17 2. The appellant craves for the leave, add, alter, amend, modify and delete any or all the above grounds of appeals before or at the time of the hearing.” 5. The Ld. AR submitted that the assessee’s non-compliance to the notice(s) issued by the CIT(A) was not intentional. He submitted that the assessee has a strong case on merits and given an opportunity the assessee is in a position to substantiate its case before the Ld. CIT(A) by filing the requisite submissions/ documentary evidences before in support of its claim. He, therefore, prayed that the matter may be restored to the file of the Ld. CIT(A) to decide the impugned issue afresh on merits, after affording an opportunity of being heard to the assessee. 6. The Ld. DR supported the order of the Ld. CIT(A) and submitted that the assessee was given adequate opportunities by the Ld. CIT(A). He, however, had no objection to the above request of the Ld. AR if the matter is set aside for denovo consideration of the Ld. CIT(A) on merit. 7. We have heard the Ld. Representatives of the parties and perused the material on records. The appellate order reveals that the Ld. CIT(A) has applied the decision of the Apex Court in the case of CIT Vs. B.N. Bhattarcharjee and Another, 118 ITR 461 (SC) and various other cases cited therein and dismissed the appeal of the assessee for non-prosecution. No doubt, the Ld. CIT(A) may decide the appeal ex-parte where the assessee does not prosecute his appeal inspite of several opportunities. None-the-less, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereon and the reason for the decision. We observe that the Ld. CIT(A) has passed the order in concurrence of the order of the Ld. AO without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act. 8. On the facts and in the circumstances of the case, we deem it fit, in the interest of justice and fair play, to set aside the order of the Ld. CIT(A)/NFAC, Delhi and restore the matter back to his file for adjudication afresh and pass speaking order on merits as per facts and law, after allowing one final opportunity of being heard to the assessee. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon on the 4 ITA No.121/PUN/2025, AY 2016-17 appointed date without seeking adjournment under any pretext unless for sufficient cause, failing which the Ld. CIT(A) shall be at liberty to pass appropriate order as per law. We direct and order accordingly. The ground of appeal raised by the assessee is accordingly allowed for statistical purposes. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 30th June, 2025. Sd/- Sd/- (R.K. Panda) (Astha Chandra) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 30th June, 2025. रदि आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, िररष्ठ दनजी सदचि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune "