THE KHEMALAPUR VIVIDODDHESHA PRATHAMIK GRAMEEN KRUSHI SAHAKAR SANGH NIYAMIT,KHEMALAPUR vs. THE INCOME TAX OFFICER, BELAGAVI

आदेश / ORDER

PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 05.05.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2017-18.

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“1. The impugned order of the Appellate Commissioner of Income Tax is liable to set aside in so far as the same is incorrect, irregular, improper, unlawful and oppose to the law and facts of the case. 2. Because, the learned lower authorities failed to delete the addition made with regards to interest earned from District Central Co-operative Bank as allowed by the Commissioner of Income Tax (Appeals) at par 6 of the Appellate Order u/s 250 of the Income Tax Act, 1961 dated 05.05.2025. 3. Because, the learned Commissioner of Income Tax (Appeals) has overlooked the facts of the case and had provided partial relief with respect to cash deposits and confirmed the additions to the extent of Rs. 27,94,122/- as income from undisclosed sources u/s 68 of the Income Tax Act, 1961. The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact the amount has been received by the appellant as part of the business receipts in the regular course of conducting the society activities. The source of the

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same was however explained before the lower authorities along with the KYC details, which has been discussed in the Assessment Order by the learned lower authorities as well as the learned Commissioner if Income Tax (Appeals). 4. Because, the learned lower authorities have erred in bringing to tax cash receipts under section 68 of the Income Tax Act, 1961, and charging it under section 115BBE at 60 percent tax with 25 percent surcharge, which was brought by amendment on 15.12.2016 (retrospective amendment - after commencement of Assessment Year 2017-18) which is bad in law. 5. Because, the learned Commissioner of Income Tax (Appeals) erred in confirming the interest levied by the lower authorities u/s 234A of the Income Tax Act, 1961 for default in furnishing return of income which is against law and facts of the case. 6. The appellant craves leave to add / alter any of the grounds of appeal before or at the time of hearing.”

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the assessee at Rs.47,62,340/- as against the income of Rs.Nil returned by the assessee. The above assessed income includes addition of Rs.45,40,725/- being unexplained cash credit u/s 68 r.w.s. 115BBE of the IT Act being cash deposit made during demonetization period and also includes addition of Rs.2,21,614/- being disallowance u/s 80P(2) of the IT Act. 5. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply and submissions of the assessee, Ld. CIT(A)/NFAC partly allowed the appeal of the assessee by restricting the addition of Rs.45,40,725/- to Rs.27,94,122/- and also deleted the addition of Rs.2,21,614/- being disallowance u/s 80P(2) of the IT Act. 6. It is the above order against which the assessee is in appeal before this Tribunal. 7. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book

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furnished by the assessee. In this regard, we find that it is the sole contention of the counsel of the assessee that the issue with regard to remaining addition of Rs.27,94,122/- needs to be restored back to the file of the Assessing Officer to decide the limited issue afresh since Ld. CIT(A)/NFAC has not considered the submissions made by the assessee in full due to which the unnecessary additions have been sustained and the assessee cooperative society is burdened with huge tax demand. It was also the contention of the counsel of the assessee that the assessee has full and complete details of sources of cash deposited during demonetization period. In support of its contentions, the assessee placed reliance on various coordinate bench decisions including the decisions in the case of (i) Merchants Credit Co-operative Society Ltd. Vs. ITO (ITA No.329/Bang/2023 order dated 24.08.2023), (ii) Sri Bhageeratha Pattina Sahakara Sangha Niyamitha vs. ITO (ITA No.646/Bang/2021 order dated 18.02.20222) and (iii) Prathamika Krushi Pattina Sahakari Sangh

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Niyamitha vs. ITO (ITA No.593/Bang/2021 order dated 01.06.2022). 8. Considering the totality of the facts of the case and in the interest of justice and without going into merits of the case, we deem it appropriate to restore the limited issue of addition of Rs.27,94,122/ back to the file of the Assessing Officer with a direction to pass assessment order afresh and as per fact and law in this regard only after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by the Assessing Officer in this regard and to produce relevant documents, submissions and evidences, if any, in support of its contentions without taking any adjournment under any pretext, otherwise the Assessing Officer shall be at liberty to pass appropriate orders as per law. Thus, the grounds of appeal raised by the assessee are allowed for statistical purposes.

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Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER Panaji / Dated : 14th August, 2026. Sujeet Kumar Digitally signed by Sujeet Sujeet/DOC Kumar Sharma Sharma Date: 2026.08.17 11:02:34 +05'30' आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT concerned. 4. DR, ITAT, Panaji. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar/Sr.PS ITAT, Panaji.