THE MARTHANDAM BEE KEEPERS CO OP SOCIETY LTD,MARTHANDAM, KANYAKUMARI DIST V. INCOME TAX OFFICER WARD 1, NAGERCOIL, NAGERCOIL

ITA 2816/CHNY/2025

AI Insights

The case involves The Marthandam Bee Keepers Co-op. Society Ltd., which appealed against the order of the Learned Commissioner of Income Tax (Appeals), Delhi, for the assessment year 2018-19. The Society, engaged in collecting and selling honey, claimed that its income was exempt under sections 10(23B) and 10(23BB) of the Income Tax Act, 1961. The Assessing Officer had made significant additions to the Society's income, citing unexplained cash credits and investments, without a proper hearing. The Tribunal noted the procedural lapses and the Society's lack of opportunity to present its case, leading to the decision to set aside the CIT(A)'s order and remand the matter for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785379 (ITAT-CHENNAI)
• Duration Of Justice: 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Appeal Filed On: 13-10-2025
• Other Referred Cases: TIN Box Co. v. CIT [2001] 249 ITR 216 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAUTHAMI MANIVASAGAM
• Assessee Lawyers: R. HARSHVARDAN
• Keywords: Set aside; Unexplained cash credit; Unexplained investment; Principle of natural justice; Earning of tax free income

Judgement Text

"आयकर अपीलीय अिधकरण, ’सी’ \u0001यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0001ी एबी टी. वक , ाियक सद\u0011 एवं एवं एवं एवं \u0001ी एम. बालागणेश, लेखा सद क े सम\u0019 BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2816/Chny/2025 िनधा\u000eरण वष\u000e/Assessment Year: 2018-19 & Stay Petition No.98/Chny/2025 िनधा\u000eरण वष\u000e/Assessment Year: 2018-19 The Marthandam Bee – Keepers Co-op. Society Ltd., 6/69A First Floor, Crstal Press Buildings, Main Road, Marthandam, Kanyakumari-629 165. v. The ITO, Ward-1, Nagercoil. [PAN: AACAT 3220 E] (अपीलाथ\u0016/Appellant) (\u0017\u0018यथ\u0016/Respondent) अपीलाथ\u0016 क\u001a ओर से/ Appellant by : Mr.R. Harshvardan, Advocate \u0017\u0018यथ\u0016 क\u001a ओर से /Respondent by : Ms. Gauthami Manivasagam, JCIT सुनवाईक\u001aतारीख/Date of Hearing : 17.10.2025 घोषणाक\u001aतारीख /Date of Pronouncement : 24.10.2025 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, dated 18.06.2025 for the Printed from counselvise.com ITA No.2816/Chny/2025 (AY 2018-19) & SP No.98/Chny/2025 (AY 2018-19) The Marthandam Bee Keepers Co-op. Society Ltd. :: 2 :: Assessment Year (hereinafter referred to as \"AY”) 2018-19 and SP No.98/Chny/2025 is a Stay Petition filed by the assessee for AY 2018-19. 2. At the outset, the Ld.AR of the assessee brought to our notice that the appeal has been filed belatedly by ‘43’ days and for condoning the delay, the assessee has filed an affidavit explaining the cause for the delay. Having gone through the contents of the same, we find that cause for delay was reasonable, so we excuse the same and proceed to hear the assessee’s appeal. 3. The Ld.AR of the assessee brought to our notice that the impugned first appellate order is an ex parte order without going into the merits of grounds of appeal raised by the assessee. According to the Ld.AR, the Ld.CIT(A) didn’t condone the delay of ‘175’ days in filing of appeal before him and has passed the impugned order. According to the Ld.AR, even though the assessee had furnished the reason for the cause of delay [refer Para No.2.2 of the impugned order], still the Ld.CIT(A) has dismissed the appeal by citing few case laws which is distinguishable on the facts of the case. Therefore, he pleaded for an opportunity to explain the grounds of appeal and submitted that assessee may be heard before fastening the additions on it. Then, he also brought to our notice that the assessment order was also passed by the AO without hearing it i.e. it was Printed from counselvise.com ITA No.2816/Chny/2025 (AY 2018-19) & SP No.98/Chny/2025 (AY 2018-19) The Marthandam Bee Keepers Co-op. Society Ltd. :: 3 :: an ex parte order (best judgment assessment). Therefore, he prayed for one more opportunity by citing the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC). 4. Per contra, the Ld.DR doesn’t want us to give one more innings to the assessee. 5. Having heard both the parties and after perusal of the records, we note that the assessee claims to be a Co-operative Society which is working under the control of Tamil Nadu Khadi & Village Industries Board and hence financed by the All India Khadi & Village Industries Commission, Bombay. According to the assessee, it was formed on 14.04.1937 as a Co-operative Society by the Members who are basically from the rural villages and adjacent forest area in and around Marthandam in Kanyakumari District. According to the assessee, the members collected honey from honeycombs from the plantation in and around Marthandam and supplied it through Khadi & Village Industries Board as well as to general public. And the sale amount collected from retail sale, mostly in cash are deposited in its bank account. According to the assessee, its entire income is exempt u/s.10(23B) & 10(23BB) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘). That being the position, the assessee on receiving notice u/s.148 of the Act, filed its Printed from counselvise.com ITA No.2816/Chny/2025 (AY 2018-19) & SP No.98/Chny/2025 (AY 2018-19) The Marthandam Bee Keepers Co-op. Society Ltd. :: 4 :: return of income (RoI) declaring ‘nil’ income, which was duly supported by books of accounts maintained by the assessee society with proper audit report u/s.44B of the Act and filed before the AO, the bank account linked with the PAN of the assessee. However, according to the assessee, they were astonished to receive assessment order wherein the AO made an addition of ₹2,09,62,411/-. According to the assessee, the AO without raising any queries during the assessment proceedings has passed the assessment order which action of the AO is bad in law for violation of natural justice. Per contra, the Ld.DR pointed out that the notice issued to the assessee didn’t elicit in response from the assessee which led the AO to pass the assessment order, wherein the AO made addition of ₹1,13,91,631/- towards ‘unexplained cash credits’ u/s.68 & also made addition of ₹11,07,938/- towards ‘unexplained investment’ u/s.69 of the Act and disallowed exempt income to the tune of ₹84,62,842/- and assessed total income at ₹2,09,62,411/- by passing assessment order u/s.147/144 on 06.02.2024. On appeal, the Ld.CIT(A) has refused to condone the delay of ‘175’ days in filing of appeal and dismissed the appeal without going into the merits of the grounds of appeal raised by the assessee. We don’t countenance this action of the Ld.CIT(A). We note that the assessee had give reason for the cause of delay which the Ld.CIT(A) has noted at Para No.2.2 of the impugned order. Having gone Printed from counselvise.com ITA No.2816/Chny/2025 (AY 2018-19) & SP No.98/Chny/2025 (AY 2018-19) The Marthandam Bee Keepers Co-op. Society Ltd. :: 5 :: through the contents of the same and also taking note that the assessee is a Co-operative Society working under the Tamil Nadu Khadi & Village Industries Board which consists of members who are making a livelihood by collecting natural honey and noticing that they are from the Southern tip of India (Kanyakumari District); and further taking note of the fact that after the assessee had filed the ITR pursuant to notice u/s.148 and other documents in support of it, doesn’t gain anything from not appearing before the assessing authority and therefore, it is probable that assessee might not be aware of the assessment proceedings going on, which led the AO to pass the assessment order by making addition of more than ₹2 Cr. and when it came to know to its notice about the action of AO i.e. only a week before filing the same before the Ld.CIT(A) on 29.08.2024, they filed appeal, hence we are of the view that delay needs to be condoned and so we condone the delay of ‘175’ days in filing of appeal before the Ld.CIT(A) and considering the facts that the assessee has not been heard by the AO during the course of assessment proceedings, due to technical glitches in the internet/computer, we are of the view that one more opportunity should be granted to the assessee. Therefore, we set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of the AO for de novo assessment in accordance to law after hearing the assessee. The Ld.AR has undertaken Printed from counselvise.com ITA No.2816/Chny/2025 (AY 2018-19) & SP No.98/Chny/2025 (AY 2018-19) The Marthandam Bee Keepers Co-op. Society Ltd. :: 6 :: to appear and file all the relevant documents before the AO; and the AO to frame assessment de novo in accordance to law after hearing the assessee. 6. Since we have disposed of main appeal, Stay Petition No.98/Chny/2025 filed by the assessee is infructuruous and so dismissed. 7. In the result, appeal filed by the assessee is allowed for statistical purposes and Stay Petition filed by the assessee is dismissed as infructuous. Order pronounced on the 24th day of October, 2025, in Chennai. Sd/- (एम. बालागणेश) (M. BALAGANESH) लेखा सद\u0003य/ACCOUNTANT MEMBER Sd/- (एबी टी. वक ) (ABY T. VARKEY) \u0005याियक सद\u0003य/JUDICIAL MEMBER चे ई/Chennai, !दनांक/Dated: 24th October, 2025. TLN आदेश क\u001a \u0017ितिलिप अ$ेिषत/Copy to: 1. अपीलाथ /Appellant 2. \u000e\u000fथ /Respondent 3. आयकरआयु\u0015/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\u000eितिनिध/DR 5. गाड फाईल/GF Printed from counselvise.com "