1171 PERAVALANALLUR PRIMARY AGRICULTURAL COOPERATIVE CREDIT SOCIETY,TRICHY vs. INCOMETAX OFFICER, WARD 2(1) TRICHY/, TRICHY

The main grievance of the assessee is that the Ld.CIT(A) without giving proper opportunity to the assessee has confirmed the action of the AO who made an addition of Rs.4,17,80,061/- u/s.69A of the Act.

Brief facts are that the assessee didn’t file its return of income and the AO received information that assessee has deposited Rs.4,17,80,061/- in Trichirapalli District Central Co Op Bank Ltd for the relevant assessment year. Hence, he reopened the assessment of the assessee for AY 2019-20 and noted that pursuant to the notice issued u/s.148 of the Act on 29.03.2023, the assessee had filed its return on 30.10.2023 belatedly and hence, he treated it as invalid and asked the assessee to prove the nature and source of cash deposit in the aforesaid bank. However, according to the AO the assessee didn’t file any documentary evidence to substantiate that the cash deposited in District Central Co Op Bank Ltd was nothing, but money returned by its members after borrowing it from the assessee society. In this regard, it was pointed out that assessee was established with the primary objective to provide credit facilities to its members, who are predominantly engaged in agricultural activities and hence, the cash deposit was nothing, but the money returned by the members after borrowing it from the assessee

Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) who was pleased to confirm the same taking note that the assessee didn’t respond despite the issuance of four (4) notices. Hence, he confirmed the action of the AO. Aggrieved the assessee is before us.

We have heard both the parties and perused the records. We note that the assessee is a Primary Agricultural Co-operative Credit Society, which didn’t file its return of income u/s 139(1) of the Act. The AO got information that assessee had deposited an amount of Rs.4.17 crores in Trichirapalli Dist Central Co Op Bank Ltd, but didn’t file the return, hence he reopened the assessment. The AO asked the assessee to prove the nature and source of cash deposit in the aforesaid bank. However, according to the AO the assessee didn’t file any documentary evidence to substantiate that the cash deposited in District Central Co Op Bank Ltd was money returned by its members after borrowing it from the assessee

The Ld.AR of the assessee submitted that the omission to file documents was not deliberate, but due to certain glitches in the internet could not upload the voluminous documents called for by the AO and undertook before us that given an opportunity, the assessee will comply by filing the requisite documents called for by the AO. Considering the fact that the assessee is a Primary Agricultural Co-operative Credit Society predominantly aiding the agricultural sector, we are of the view that one more opportunity needs to be given to the assessee to submit the documents as called for by the AO. Hence, we set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of AO for de nova assessment subject to remitting cost of ₹5,000/- (Rupees five thousand) which shall be deposited by the assessee to 'Tamil Nadu State Legal Services Authority' at Hon'ble High Court of Madras and submit the proof of deposit of cost before the AO within three (3) months from date of this order; and direct the assessee to file all the requisite documents called for by the AO before the AO/verification unit of the Income Tax and thereafter, the AO to frame the assessment after considering the report from the verification unit in accordance to law after hearing the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purposes and Stay Application filed by the assessee is dismissed.