THE HONAVAR HAVYAK UCCSL,HONAVAR vs. ASSESSING OFFICER, ITO WARD-I, KARWAR

Registry has pointed out that the appeal of the assessee is time barred by 501 days. Assessee has filed an affidavit explaining the reasons which led to delay in filing of the appeal before this Tribunal. Precise reasons for the delay are due to lack of expertise in handling the income tax portal and the assessee is not using the email registered on the portal. Further, the assessment was done on the old PAN number AABHT5049R whereas the assessee is filing the regular return under the new PAN Number AAJAT3396G with status of a Cooperative society.

Upon a comprehensive appraisal of the facts, we find that the delay cannot be attributed either to deliberate inaction or to any lack of bona fides on the part of the assessee. The circumstances explained demonstrate that the default occurred due to reasons beyond the assessee's control and not on account of any negligence, or want of diligence. In our considered view, assessee has satisfactorily established the existence of "sufficient cause" for the delay in preferring the appeal before the First Appellate Authority. Adopting justice oriented approach and placing reliance on the judgments of Hon’ble Apex Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors.

Brief facts of the case are that the assessee is an Urban Cooperative Society and engaged in the business of providing credit facilities to its Members. For the year under consideration, it has not filed the return under the provisions of section139(1) of the Act. Based on the information available with the Department that income of the assessee is above the taxable limit, notice u/s.142(1) of the Act. However, the assessee has neither filed any return of income even in response to the said notice. Ld. Assessing Officer has obtained the bank account statements of the assessee society maintained with KDCC Bank, Honavar Branch and the Audit report. The assessee in response to the show cause notice dated 14.10.2019 has furnished ITR- V, computation of income, statement of accounts, list of depositors who had deposited cash, repaid loans in cash etc. After examining the details provided by the assessee, Ld. Assessing Officer concluded the assessment proceedings making addition of cash deposit during the demonetization period made in Specified Bank Notes at Rs.14,20,000/- as unexplained money u/s.69A and invoked section 115BBE of the Act. Income assessed at Rs.14,35,680/-. While doing so, ld. Assessing Officer also held that assessee society is not eligible for deduction u/s.80P(2)(a)(i)/80P(2)(d) of the Act by virtue of decision of Hon’ble Supreme Court in the case of Citizen Cooperative Society Ltd. Reported in (2017) 397 ITR 1.

Aggrieved assessee preferred appeal before ld.CIT(A) but then failed to make any compliance to the notices issued by ld.CIT(A) resulting into dismissal of assessee’s appeal. Dissatisfied assessee is now in appeal assailing the exparte order passed by ld.CIT(A).

We have heard the rival contentions and perused the record placed before us. We observe that the assessee is an urban Cooperative society and has not filed the return of income u/s.139(1) of the Act. The sole grievance of the assessee in the instant case is that the authorities were not justified in making addition of cash deposit when the assessee has provided the list of depositors who are members of the assessee society. Further, the assessee society is eligible for deduction u/s.80P of the Act even when the return of income is not filed within the due date.

Before us, ld. Counsel for the assessee submitted that the assesee society has submitted the requisite details before the Assessing Officer but due to reasons beyond the control of the assessee there was non-compliance before ld.CIT(A) and therefore one more opportunity may be given to the assessee to substantiate the cash deposits made and the eligibility of section 80P of the Act. Ld. Departmental representative merely supported the order of ld.CIT(A).

Considering the above factual matrix and the prayer made by ld. Counsel for the assessee, we deem it appropriate to restore the issues raised in the instant appeal to the file of ld.CIT(A) for afresh adjudication. Needless to mention that ld.CIT(A) in the set aside proceedings shall afford reasonable opportunity to the assessee. Assessee is directed to provide updated email id and contact detail to the department for receiving the notices from ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is set aside and the effective grounds of appeal raised by the assessee is allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on this 11th day of August, 2026.