BUDGE BUDGE NANGI COOPERATIVE BANK LIMITED,KOLKATA vs. ITO, WARD 26(1), KOLKATA

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ITA 767/KOL/2026Status: DisposedITAT Kolkata03 September 2026AY 2017-20186 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the appeal to the file of the AO, directing the AO to pass an order on merit after giving the assessee an opportunity to be heard. This was done in the interest of justice, acknowledging the assessee's failure to provide explanations.

What were the facts?

The assessee, a co-operative bank, failed to comply with notices issued by the Assessing Officer (AO) regarding large cash deposits made during demonetization. The AO treated these deposits as unexplained money and disallowed a provision for gratuity.

What were the issues?

Whether the assessee's failure to provide explanations for cash deposits and disallowance of gratuity provision warrants a remand for a fresh assessment on merit.

Which sections of the Income-tax Act were involved?

Section 144,Section 139(4),Section 143(2),Section 142(1),Section 69A,Section 40A(7)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Before: Shri Rajesh Kumar & Shri Pradip Kumar Choubey

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member ITA No 767/KOL/2026 Assessment Year- 2017-18 Budge Budge Nangi Co-operative Bank Limited...................................................Appellant 63, Mahatma Gandhi Road Budge, Budge, Kolkata- 7000137 [PAN No.AABAB0012H]

Vs. Income Tax Officer Ward-26(1),...................................,..……………....……….Respondent West Bengal- 700031, Appearances by: Akshay Ringasia, AR, appeared on behalf of the Appellant. Ambrish Mishra, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing: August 18, 2026 Date of pronouncing the order: September 03 ,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the assessee is directed against the order dated 31.12.2025 of the National Faceless Appeal Centre (NFAC) , Delhi passed under Section 144 of the Assessment Year 2017-18 of the Income-Tax Act, 1961 (hereinafter referred to as “the Act”).

2.

The brief facts of the case of the assessee is that the assessee is a Co- operative bank registered under West Bengal Co-operative Society act, 2006, carrying on business of banking as per licence granted by Reserve Bank of India. In the assessment year 2017-18 the assessee filed income tax return under

ITA No.767/Kol/2026 section 139(4) of the IT Act1961 on 09/10/2017, showing a total taxable income of Rs 4,89,880/ and have paid Rs. 1,48,283.00 as income tax. The case was selected for Scrutiny under CASS. Computer generated notice u/s 143(2) and 142(1) was issued and duly served to the e-mail mentioned in its return of income for the A/Y 2017-18 and also through postal service but the appellant did not comply to any of the said notices. It was seen from Records that assessee had deposited during demonetization period (09/11/2016 to 30/12/2016) huge cash of Rs. 1,40,50,000/- in A/c no. 916020057 037341 and Rs. 1,11,75,000/- in A/c no. 916020056800278 with Axis Bank Ltd. Budge Budge Branch, and Rs 49,00,000/- in A/c no.12 8010099970 with United Bank of India Budge Budge Branch and also Rs. 78,000/- in UCO Bank Budge Budge Branch. Assessee was asked to furnish the source of the cash deposits in its Bank accounts vide notice 142(1) as mentioned above,but no response was submitted on behalf of the appellant. Thus, in absence of any explanation from the appellant the source of cash deposited into the accounts of the appellant remains unexplained and treated as unexplained money u/s 69A of the Act. The deposits totalling to Rs. 3,2,03,000/- is hereby treated as unexplained money u/s. 69A and added to the total income of the assessee under the head- income from other Source. It is also seen that assessee has debited Rs. 116242/- in its P/L A/c on account of payment of gratuity which was mentioned as

ITA No.767/Kol/2026 inadmissible u/s. 40A(7) of the Act,as such, Rs 1,16,242/-is hereby disallowed and added to the total income of the assessee. The ld. AO has made the following addition.

A. Net income declared as per income Tax return -Rs 4,89,880.00/-

B. Add. Provision for gratuity in admissible u/s 40A(7) -Rs. 1,16,242.00/-

C. Add. Cash Deposit during demonetization Rs.-3,02,03,000/-

D. Total Rs. 3,08,09,122.00, Less: deduction allowed u/s 80P NIL

Aggrieved by the said order assessee preferred appeal before the CIT(A) wherein appeal of the assessee has been dismissed.

3.

The Ld. AR instead of arguing into the merit of the case has only prayed that appeal of the assessee be remitted back to the file of the AO as the assessee has failed to submit explanation with regard to the source of cash deposits into the bank accounts and Assessing Officers has made an addition due to the non-submission of the proper documents. The prayer of the AR is that before the CIT(A) also there was no proper compliance so for the interest of justice assessee has to give an opportunity to the place his case before the Assessing Officers.

ITA No.767/Kol/2026 The Ld. DR though supports the impugned order but did not raise any objection in remitting the appeal of the assessee to the file of the AO.

4.

Upon hearing the submission and on perusal of the order of the lower authority we find that there was no compliance on the notice issued u/s 142(1), there is no compliance on the show cause notice issued to the assessee. CIT(A) has upheld the order on the same issue that despite repeated notices assessee did not make any compliance nor file any documentary proof. In view of the submission made by the assessee and for the interest of justice we are inclined to restore the appeal of the assessee to the file of the AO with a direction to pass order on merit after affording an opportunity to hear the assessee. Assessee is directed to cooperate in the remand proceedings.

In the result, the appeal of the assessee is allowed for statistical purposes.

Kolkata, the 03rd September, 2026.

Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member

DC Dated: 03. 09.2026. 4

ITA No.767/Kol/2026

Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- 5. CIT(DR)

//True copy// By order Manish Bhoi Deputy Registrar Kolkata Benches

ITA No.767/Kol/2026

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