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Facts
The assessee, a cooperative society, filed an appeal with a delay of 388 days due to circumstances arising from the death of their tax consultant. The additions were made on account of cash deposits during the demonetization period.
Held
The Tribunal condoned the delay in filing the appeal considering the peculiar facts of the case. The matter concerning cash deposits was restored to the Assessing Officer for fresh adjudication, while grounds related to procedural fairness were allowed.
Key Issues
Whether the delay in filing the appeal should be condoned, and whether the matter of cash deposits needs to be restored to the Assessing Officer for further inquiry.
Sections Cited
254(1), 80P, 69A, 115BBE
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PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by assessee is directed against the order of ld. CIT(A) / NFAC dated 19.08.2023 for A.Y. 2017-18. The assessee has raised following grounds of appeal:
“1. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in passing the appellate order without providing sufficient opportunities of being heard.
2. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in passing the appellate order without considering assessee's request to grant adjournment documentary evidences. to submit
On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming disallowance of deduction u/s 80P of the Act amounting to Rs. 4.56.310/-
4. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming disallowance of remuneration to partners amounting to Rs. 90,000/-
5. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming addition of Rs. 29,46,500/-u/s 69A r.w.s. 115BBE of the Act on account of cash deposited in bank accounts.
On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming addition of Rs. 29.46,500/-u/s 69A r.w.s. 115BBE of the Act on account of cash deposited in bank accounts without considering that the cash was received from the members of assessee-society.
On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming invocation of section 115BBE of the Act.
8. Without prejudice to the above grounds, the learned CIT (Appeals) has erred in not allowing deduction u/s 80P of the Act against the addition of Rs. 29,46,500/-
It is therefore prayed that the addition made by the assessing officer may please be deleted.”
Rival submissions of both the parties have been heard and record perused.
The learned authorised Representative (ld. AR) of the assessee fairly submits that there is delay of 388 days in filing appeal before Tribunal. The delay in filing appeal is not intentional or deliberate. The assessee-society has also filed affidavit of its Secretary. The ld. AR of the assessee submits that office bearers and members of assessee society are not well-versed in the intricacies of income-tax laws and were completely depending upon their tax consultant, Bhupendra Raut for various compliance and appeal proceedings. Bhupendra Raut was also Chairman of Asthavinayak Urban Co-operative Credit Society, who was killed in his cabin in January, 2021.
FIR was registered of such incident. Office bearers of the assessee society including secretary of assessee-society were also summoned in the investigation of his murder. The officer bearer of assessee-society was having good relation with the staff of deceased Bhupendra Raut. The office bearers of assessee were under impression that appellate proceedings were taking care of by the staff of deceased consultant. In October, 2024, a demand notice was served upon the assessee and on further enquiry it was found that appeal of assessee was dismissed on 19.08.2023, copy of demand notice is filed. On coming to know about dismissal of their appeal, the assessee-society immidiatly filed present appeal by engaging professional services of present Advocate/Representative. The ld. AR of the assessee submits that delay in filing appeal is not intentional or delibrate.
The assessee is not going to be benefitted by filing appeal belatedly. The assessee has good case on merit and likely to succeed, if they are allowed to contest appeal on merit.
On merit, the ld. AR of the assessee submits that additions in the assessment were made on account of cash deposit during demonetization period. The additions were made for the want of reply as recorded in para 6.2 of assessment order. The assessing officer added entire cash deposit and taxed the same under section 115BBE. The assessing officer also denied exemption under section 80P and remuneration to partners. As addition/disallowance under section 80P and disallowance of remuneration was not challenged before ld. CIT(A), therefore, he is not pressing such corresponding grounds of appeal. So far as the addition on account of cash deposit is concerned, such addition was also confirmed for the want of corroborative evidence i.e. in respect of sources of cash. The assessee is ready and willing to prove the source of cash deposit. However, such evidences were not filed before lower authorities; therefore, the matter may be restored back to the file of assessing officer. The details of members of assessee-society who have made deposit was given to ld. CIT(A) but identity of members could not furnish due to lack of time. The assessee is ready to prove the source of cash deposit which was received from its members and the same cannot be treated as unaccounted income as has been held by Mumbai Tribunal in Jay Mataji Co-operative Credit Society Limited vs ITO in dated 18.03.2024 and in Moreshwar Nagari Sahakari Pathpedhi Limited Vs ACIT in dated 05.09.2024.
3. On the other hand, the learned senior departmental representative (Sr DR) for the revenue opposed the plea of assessee in condoning the delay. The ld. Sr DR for the revenue submits that FIR in respect of alleged killing of tax consultant was made in 2021. However, the order of ld. CIT(A) was passed in August, 2023. Before ld. CIT(A), the assessee were pursuing their appeal, so the plea of condonation of delay is not convincing. The delay has not been explained in a proper manner. The delay may not be condoned and the appeal may not be admitted. On merit of the case, the ld. Sr. DR for the revenue submits that assessee has not furnished source of cash deposit. Identity of creditor and genuineness of transaction is not proved. No return of income was filed by assessee. The bank account in Bassein Catholic Co-operative Bank was opened during demonetization period.
I have considered the rival submission of both the parties and have gone through the orders of lower authorities and the material placed before me.
Firstly, I am considering the plea of assessee in condoning the delay. I find that the ld. AR of the assessee has explained that tax consultant who was pursuing the matter of assessee for compliance and tax purposes was killed and the officer bearer of assessee-society were subjected to investigation proceeding and that the officer bearer of assessee came to know only in August, 2024 when recovery notice was served upon the assessee. The ld SR DR for the revenue opposed the plea of assessee that that murder of their accountant took place on 2021 and the written submission before ld. CIT(A) was filed on 03.08.2023. On perusal of order of ld CIT(A), I find that certain written submissions were filed on 03.08.2023, but there is no reference, whether such submissions were filed from the office of their consultant of through somebody else. However, keeping in view the fact that assessee is co-operative society and assessment was completed for the want of submission and addition on account of cash deposit was also confirmed by ld CIT(A) for the want of source of funds. Thus, keeping in view the peculiar facts of the present appeal, the delay in filing appeal is condoned. Now adverting to the merits of the case.
I find that during the hearing the ld AR of the assessee made statement that he is not pressing Ground No. 3 & 4, hence, such grounds of appeal are dismissed as not pressed.
6. So far as other addition of cash deposits is concerned, I find that assessment was completed for the want of submission and addition on account of cash deposit was also confirmed by ld CIT(A) for the want of source of funds. Further, considering peculiar facts of the case, I find that the assessee deserve one more opportunity to explain the source of cash deposits, hence, the matter is restored back to the file of assessing officer to pass the assessment order afresh. Needless to direct that before passing of assessment order afresh, the assessing officer shall allow fair and reasonable opportunity to the assessee. The assessee is more vigilant in making timely compliance. In the result, ground No. 1, 2, 5 & 6 of the appeal of assessee are allowed for statistical purpose.
7. Ground No 7 to 9 are alternative or consequential hence need no specific adjudication.
In the result, the appeal of assessee is partly allowed.