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Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK
Before: SHRI GEORGE MATHAN & SHRI MANISH AGARWAL
This is the appeal filed by the assessee against the order of ld. CIT(A) National Faceless Appeal Center (NFAC), Delhi, dated 12.11.2024 passed in appeal No. NFAC/2013-14/10109423 vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1065534458(1) for the assessment year 2014-15.
Shri Nihar Ranjan Biswal, CA represented on behalf of the assessee and Shri S. C. Mohanty Sr. DR represented on behalf of the department.
2 I T A N o . 3 3 7 / C T K / 2 0 1 3 : 3. The assessee has taken following grounds of appeal:-
GROUND NO.-1 For that, on the facts and circumstance of the case, the Ld CIT(A) has erred in law by not considering the fact that the order passed by the Ld. AO was without applying his mind to the information available in order to have reasons to believe that the income of the assessee is escaped assessment and the reasons recorded for initiation of proceeding u/s 147 was not correct Therefore initiation of Re- assessment proceeding by way of issue of notice is liable to be null and void GROUND NO.-2 For that, on the facts and circumstance of the case, the Ld. CIT(A) has erred in law, by confirming the addition of Rs. 29,39,930/- as unexplained income u/s 69A without considering the fact that the detailed explanation/ submission relates to said issue were filed before the Id. AO, CIT(A) and without considering the remand report and rejoinder The Ld. CIT(A) has also not considered the submission filed physically before the Ld AO and in e- filling portal and e-mail. However the Ld. CIT(A) admitted that the 80P is not allowed due to some technical reason. Therefore the Ld. CIT(A) admitted that it is a business receipt. Therefore addition of Rs. 29,39,930/- u/s 69A is arbitrary, unjustified, illegal on the facts and circumstances of the case and the same is liable to be deleted in full GROUND NO.-3 For that, on the facts and circumstance of the case, the Ld. CIT(A) haserred in law. by not considering that the re- assessment u/s 147 is completed without serving the notice u/s 143(2) upon the assessee. The Ld CIT(A) has passed the order without considering the remand report and the rejoinder to the remand report. Therefore issue of notice is null and void and the order passed u/s 147 r.w.s 144 is liable to be set aside. GROUND NO.-4 For that, on the facts and circumstance of the case, the Ld. CIT(A) has erred in law by not considering that the Id. AO has not supplied the reasons for re-assessment and necessary satisfaction of the Pr. CIT before completion of the assessment. The Ld AO admitted the same in the remand report. The assessee has also submitted the fact in 3 I T A N o . 3 3 7 / C T K / 2 0 1 3 : the rejoinder to the remand report. Therefore assessment order passed u/s 147 r.w.s 144 is liable to be set aside. GROUND NO. - 5 In the alternative the following grounds of Appeal may be considered. For that, on the facts and circumstance of the case, the Ld. CIT(A) has erred in law by not allowing the deduction u/s 80P when the return is filed against the notice u/s 148. The Ld. CIT (A) has dismissed the appeal on the sole ground that the return was not filed u/s 139(1) However the filling the return u/s 139(1) is not required for the Asst. Year 2014-15. Therefore I request to allow the addition of Rs. 29.39,930/- u/s 80P GROUND NO.
6. For that, the appellant may add, alter, amend any other grounds of appeal at time of hearing.
4. During the course of hearing vide letter dated 20/10/2024, the assessee has revised Ground of Appeal
No. 5 which read as under : Revised Grounds of Appeal Ground No.
5. In the alternative the following grounds of Appeal may be considered. For that, on the facts and circumstance of the case, the Ld. CIT(A) has erred in law by not allowing the deduction u/s 80P when the return is filed against the notice u/s 148. The Ld. CIT (A) has dismissed the appeal on the sole ground that the return was not filed u/s 139(1). However the filling the return u/s 139(1) is not required for the Asst. Year 2014-15. Therefore I request to allow the deduction of Rs. 29,39,930/- u/s 80P.
5. Brief facts of the case are that the assessee is a credit Co- operative Society and no return of income was filed for the year under appeal. The Assessing Officer received the information that the assessee had made cash deposit in its bank account, sources of 4 I T A N o . 3 3 7 / C T K / 2 0 1 3 : which are not explained as return of income was not filed for the year. Therefore, notice u/s. 148 of the Act was issued 07.01.2021 to reopen the case after recording reasons of the same after following due procedure. The reassessment order was passed on 29.03.2022 wherein an addition of Rs. 29,39,930/- was made u/s. 69A of the Act, in the hands of the assessee by treating the cash deposit in bank as assessee’s income from undisclosed sources which orders stood confirmed by ld.CIT(A). Therefore, the present appeal is preferred by the assessee before us.
6. The grounds No. 3 and 4 are legal grounds taken against the reopening of the assessment.
7. In Ground No. 3 the assessee has challenged the reassessment order passed u/s. 148 r.w.s144 of the Act, on the ground that no notice u/s. 143(2) was served upon the assessee though the return of income was filed by the assessee in response to notice u/s. 148.
In this regard, during the course of hearing the ld. Sr DR submitted the copy of the notice issued u/s. 143(2) dated 23.03.2022 which was served upon the Chief Executive Officer of assessee personally on 23.03.2022 who had signed the same, extracts of the said receipt is as below:
5 I T A N o . 3 3 7 / C T K / 2 0 1 3 :
6 I T A N o . 3 3 7 / C T K / 2 0 1 3 :
Since the notice u/s 143(2) of the Act was duly issued and served upon the assessee after filing of the return, therefore, we find no merit in this ground of the assessee and thus the same is dismissed.
Ground No. 4 is with regard to the non-supply of the reasons recorded for reopening and also for not recording of proper satisfaction by the authorities sanctioning the reopening assessment. In this regard, it is seen that in the present case, the reasons were recorded by the Assessing Officer and they were duly intimated to the assessee vide letter dated 14.12.2022 along with the copy of the 7 I T A N o . 3 3 7 / C T K / 2 0 1 3 : satisfaction note of the Principal Commissioner of Income Tax. The copies of these documents are placed in the paper book Page. 52-56 filed by the assessee. A perusal of the same, we find that though the assessee has not filed the return of the income in time in compliance to notice u/s.
Yet, the Assessing Officer has provided the copies of the reasons so recorded much before the date of filing of the return. Furthermore, the perusal of the satisfaction note written by the Principal Commissioner of Income Tax, we find that the Assessing Officer has recorded the reasons on 25.02.2020 on which the satisfaction by the Joint Commissioner of Income Tax was recorded on 12.03.2020 and after going through the assessment records the Principal Commissioner of Income Tax, Cuttack has recorded his satisfaction on 19.05.2020. Once, the sanctioning authority i.e the Principal Commissioner of Income Tax, Cuttack has already recorded his satisfaction in a proper manner after going though the assessment records and due application of mind. Thus, we find no infirmity in the sanction/approval given by the PCIT, nor it is a case where reasons were not supplied to the assessee, thus this grounds of appeal is also dismissed.
11. Ground No. 1 and 2 are in relation to the addition of Rs. 29,39,930/- made u/s. 69A and confirmed by the CIT(A).
8 I T A N o . 3 3 7 / C T K / 2 0 1 3 : 12. Before us the ld. AR of the assessee submits that the assessee is a Credit Co-operative Society and the cash deposits in the bank account are the cash deposits made by its members in their account maintained with it, which were duly recorded in the cash book. After meeting out day to days expenses, balance amounts were deposited in the bank account of assessee society on various dates. Since these deposits are duly deposited by the members of the assessee society, therefore, the same cannot be held as undisclosed income of the assessee. He further submits that the Assessing Officer has wrongly invoked of provision u/s. 69A of the Act. In support of the claim the ld. AR drew our attention to the submission made before the AO during the course of assessment proceedings wherein vide letter dated 28.03.2022, all the details were filed before the Assessing Officer and are available in the paper book Pg. 61-75. He thus prayed for the deletion of the additions so made.
On other hand, ld.SR DR vehemently supported the order of authority below and submits that the assessee has failed to establish that the deposits were made in cash with the assessee by its members only and merely by filing the cash deposit receipts and copy of cash book, it could not be established that the person who have made cash deposits were the members of the appellant society nor 9 I T A N o . 3 3 7 / C T K / 2 0 1 3 : their creditworthiness was proved. According to ld. Sr DR during the course of appellant proceeding also matter was remanded back to the Assessing Officer for the remand report. However, at that stage also assessee had failed to furnish the relevant details. He, thus, prayed for the confirmation of the additions so made.
We have considered the rival submissions and perused the material available on record. From the records and the paper book filed by the assessee, we find that in the present case, before issue of notice u/s. 148, information was called for from the assessee by issue of summons u/s. 133(6) of the Act on two occasions i.e on 9th October 2015 and 19th November 2015, wherein the Assessing Officer had asked the assessee to file the details of the members from whom the amounts stated to have been collected in cash and deposited in the bank account. Only upon failure on the part of assessee in providing the relevant details, proceeding for re-assessment u/s 148 were initiated. Thereafter, during the course of re-assessment proceedings also these details were called for by the Assessing Officer in order to examine the immediate source of the cash deposited in the bank account. However, despite of various opportunities, the assessee society had filed only one reply on 28/03/2022 wherein it was submitted that these amounts were deposited by the members of the 10 I T A N o . 3 3 7 / C T K / 2 0 1 3 : society in their accounts maintained with the assessee society. However, at no stage an effort was made by the assessee to prove that the persons who have made the deposits were its members nor their particular such address and their ledger accounts in the books of the assessee were furnished. Merely by saying that these persons are the members could not discharge the assessee from the burden casted upon it to prove to the satisfaction of the Assessing Officer about the identity of the depositors. Nor during the course of appellate proceedings despite the opportunity given in remand proceedings none of these details were filed nor are filed even before us. The ld. AR simply reiterated the submissions made by the authorities below and stated that these deposits were out of cash deposits in the society by its members in their accounts maintained with assessee. As no details with regard to the list of members, their ledger accounts etc. are produced/submitted, therefore, assessee’s contention could not be accepted that these deposits are out of receipts from the members of assessee society. However, it is seen that the assessee is a credit cooperative society and from the copy of money receipts furnished, it appears that the cash deposits were made by various persons in their accounts on various dates, which were deposited in the bank account of the assessee which fact is also evident from the copy of cash book available in the paper book. Thus, in the interest of 11 I T A N o . 3 3 7 / C T K / 2 0 1 3 : justice we set aside this issue to the file of the Assessing Officer and direct the assessee to file all the necessary details in support of the contention that the amounts were received from its members in cash to the satisfaction of the Assessing Officer, thus, the ground of appeal No. 1 and 2 are partly allowed for statistical purposes.
The ground No. 5 taken by the assessee and later on vide application dated 20.10.2024, the same has been revised wherein it is claimed that no deduction u/s. 80P of the Act was allowed on the addition so made by the Assessing Officer as the assessee has not filed the return of income u/s. 139(1) of the Act. Since, we have already set aside the issue of cash deposits to the file of the Assessing Officer to decide the same de novo afresh, therefore, this ground of appeal become academic and, thus, not adjudicated.