THE PRIMARY AGRICULTURAL COOPERATIVE SOCIETY,BETHAMPUDI, TEKULAPALLY vs. ITO WARD-1, KOTHAGUDEM, KOTHAGUDEM

आदेश / ORDER PER VIJAY PAL RAO, VICE PRESIDENT:

These two appeals by the Assessee are directed against the two separate Orders of the learned CIT(A)- National Faceless Appeal Centre [in short "NFAC"], Delhi, both dated 18.08.2025 for the assessment years 2018-2019 and 2019-2020, respectively.

“The Appellate order of the Ld. NFAC/CIT(A) is bad and 1) erroneous, both on facts and in law. 2) On the facts and in the circumstances of the case and in law, the Ld. NFAC/CIT(A) has erred in sustaining the Reassessment Order made u/s 147 and in not declaring that the Jurisdictional Assessing Officer (JAO) has no jurisdiction to issue notices u/s 148A (b) and (d)

3 ITA.Nos.1662 & 1663/Hyd./2025 and u/s 148 of the Act after the notification of Faceless Jurisdiction of Income Tax Authorities Scheme, 2022. It ought to have declared that the reassessment proceedings initiated in physical manner by the JAO after the Faceless Assessment regime came into operation by Notification No S.O. 1400(E), dated, 28-03- 2022 after issue by the Central Government. 3) On the facts and in the circumstances of the case and in law, the Ld. NFAC/CIT(A) has erred in sustaining the Reassessment Order and in not declaring that the JAO being the Income Tax Authority of the rank of Income Tax Officer (ITO) has no jurisdiction to initiate and issue reassessment notices WHARE in a case the amount of income alleged to have escaped assessment exceeded the monetary, pecuniary limits prescribed by CBDT Instruction No. 1 of 2011. It ought to have declared that the reassessment proceedings were undertaken by the ITO without jurisdiction and such proceedings are void ab initio. 4) On the facts and in the circumstances of the case and in law, the Ld. NFAC/CIT(A) has erred in not declaring that the reassessment proceedings undertaken by the JAO is without proper jurisdiction in view of the fact that the amount of income alleged to have escaped assessment is factually incorrect and it is in variance with the actual amounts as per records. The NFAC ought to have verified the facts instead of taking

4 ITA.Nos.1662 & 1663/Hyd./2025 technical objections as justice dominates the technicalities. 5) On the facts and in the circumstances of the case and in law, the Ld. NFAC/CIT(A) has erred in sustaining the additions made in the assessment u/s 69A for the amount of cash deposits made in the bank accounts for an amount of Rs.16,43,88,300/- without considering the plausible and valid explanations offered by the appellant for the sources for such deposits. It ought to have considered the explanations without bringing technical objections to admit and consider the additional evidences in the interest of dispensing substantial justice. 6) On the facts and in the circumstances of the case and in law, the Ld. NFAC/CIT(A) has erred in sustaining the disallowance of the Income of the Appellant Society claimed u/s 80P of the Act on the plea that the IT return was filed u/s 148 and not u/s 139(1) of the Act. It ought to have considered that the provisions of Section 148 clearly mandate that all the provisions of the Act shall apply as if return as filed u/s 139. 7) Such other ground OR grounds that may be urged during the hearing of the appeal.”

5 ITA.Nos.1662 & 1663/Hyd./2025 the assessee society is to provide short/medium and long term loan to the farmer members, to sell seeds, fertilizers and pesticides to the farmers. The assessee society is also encourage the savings among its members by accepting deposits from the members and also providing the credit facilities as well as storage facility to the farmers for their agricultural produce etc. The assessee society has not filed any return of income u/sec.139(1) of the Income Tax Act [in short "the Act"], 1961 therefore, the assessment was reopened by the Assessing Officer by issuing notice u/sec.148 of the Act based on the information that the assessee has transactions of cash deposits, cash withdrawals in the bank account with District Cooperative Central Bank. The assessee filed the return of income in response to notice u/sec.148 of the Act but the same were belated. The Assessing Officer framed the assessment u/sec.147 r.w.s.144B of the Act whereby made the additions on account of unexplained cash deposit in the bank account u/sec.69 and addition on account of disallowance of deduction claimed u/sec.80P of the Act. The claim of deduction u/sec.80P was

6 ITA.Nos.1662 & 1663/Hyd./2025 denied by the Assessing Officer due to delay in filing the return of income. The assessee challenged the action of the Assessing Officer before the learned CIT(A) but could not succeed as the learned CIT(A) has confirmed the additions made by the Assessing Officer for want of any supporting evidence.

7 ITA.Nos.1662 & 1663/Hyd./2025 Cooperative Central Bank for the purpose of further disbursement of the loan to the farmer-members and that amount is also added by the Assessing Officer as income of the assessee. The learned Authorised Representative of the Assessee has submitted that due to some mis- communication and improper representation before the Assessing Officer as well as the learned CIT(A) the assessee could not produce the relevant supporting evidence including the books of account of the assessee society duly audited by the Auditor. The learned Authorised Representative of the Assessee has further submitted that some of the cash deposited in the bank account also represent the sale proceeds of seeds and fertilizers to the farmers and members and therefore, the entire amount cannot be treated as income of the assessee. He has further submitted that the Assessing Officer has disallowed the claim of deduction u/sec.80P of the Act which is very small amount for these two years due to delay in filing the return of income however, the delay in filing the return of income has been condoned by the Pr. Chief Commissioner of Income Tax vide Order dated 12.12.2025.

8 ITA.Nos.1662 & 1663/Hyd./2025 Therefore, after the delay in filing the return of income has been condoned the claim of deduction u/sec.80P of the Act is allowable which is not considered by the learned CIT(A). The learned Authorised Representative of the Assessee has referred to the voluminous record filed by the assessee first time before the Tribunal as an additional evidence and submitted that due to improper and poor representation before the authorities below and assessee being a Primary Agriculture Cooperative Society having its members from the rural area and farmers by occupation was entirely depending on the Tax Consultant. Hence, the learned Authorised Representative of the Assessee has submitted that since the Assessing Officer has made the addition of the entire deposits and also denied the claim of deduction u/sec.80P of the Act to the assessee, the additional evidence filed by the assessee may be considered for verification and examination at the level of the Assessing Officer. He has thus prayed that the matter may be remanded to the record of the Assessing Officer for fresh adjudication after verification and

9 ITA.Nos.1662 & 1663/Hyd./2025 examination of the supporting evidence filed by the assessee including the books of account of the assessee society.

10 ITA.Nos.1662 & 1663/Hyd./2025 notice u/sec.148 of the Act. The assessment was completed by the Assessing Officer by considering all the deposits made in the bank account as income of the assessee and claim of deduction u/sec.80P of the Act was also disallowed as there was a delay in filing the return of income. Thus, it is clear that the Assessing Officer has made the additions of the entire deposits/credits in the bank account of the assessee which includes the amount collected from the farmers as well as loan taken by the assessee from the District Cooperative Central Bank. Prima facie it appears that the deposits as taken by the Assessing Officer do not constitute the income of the assessee when assessee is a Primary Cooperative Society having its members as farmers of the area around 156 villages. For the assessment year 2018-2019 the Assessing Officer has computed the income of the assessee society as under:

11 ITA.Nos.1662 & 1663/Hyd./2025

6.1. Thus, the entire deposit in the bank account was added as income of the assessee whereas the assessee has explained that these deposits represent the collection from the farmers, loan taken from the District Cooperative Central Bank as well as the sale proceeds of seeds and fertilizers. The assessee challenged the action of the Assessing Officer before the learned CIT(A) however, the learned CIT(A) has confirmed the additions made by the Assessing Officer and given the reasons at Page nos.18 and 19 of the impugned order as under:

“xxi. This Appellate authority has considered the explanation of the appellant assessee and found the following issues:

12 ITA.Nos.1662 & 1663/Hyd./2025 a. The appellant has not provided even a Certificate from the bank concerned w.r.t. the name/ type and number of accounts held by the appellant in the said District Co- operative Central Bank Ltd. (DCCB),

b. It is also noted that, during the assessment proceedings the assessee has provided its replies to the Assessing officer, but nowhere in its said submissions the appellant has stated or denied before the Assessing officer w.r.t. the bank accounts not held by the assessee society with the said DCCB,

c. The appellant society have still not provided its Registration certificate to this Appellate authority and the same was also not done so before the Assessing officer.

d. The appellant has also not provided any Agreement done/ MoU with the alleged members of the society to show as to what nature of work may they do for the society, and/or show whether the loans may have been provided on mutual terms of agreement and vice versa,

e. The appellant society has not provided membership proof and membership conditions which may have been entered into before adding the members to the said society,

f. Also a society would be eligible for relief u/s 80P of the Act only if it falls within two categories of co-operative banks i.e., 'primary agricultural co-operative society' and 'primary co-operative agricultural and rural development bank' and its principal business consisted of providing financial

13 ITA.Nos.1662 & 1663/Hyd./2025 accommodation to its members for agricultural purposes or for purposes connected with agricultural activities. The appellant assessee society is a primary agricultural co-operative credit society. Also the appellant society has not provided any proof to show that, the appellant assessee has carried out any activities in connection with the above stated agricultural purposes/activities.”

6.2. Therefore, the learned CIT(A) has noted that the assessee society has failed to provide the documentary evidences in support of the claim. Before us the learned Authorised Representative of the Assessee has explained the reasons that the case of the assessee was not properly represented before the authorities below and assessee was completely depending on the Tax Consultant. Thus, it is clear that the additions made by the Assessing Officer and confirmed by the learned CIT(A) of the entire cash deposits in the bank account were for want of supporting evidence. Now the assessee has filed the voluminous record in support of the claim for both the years. The details of the record filed by the assessee as additional evidence for the assessment year 2018-2019 is as under:

14 ITA.Nos.1662 & 1663/Hyd./2025

6.3. Similar record has been filed by the assessee for the assessment year 2019-2020. Since this record has been filed first time before the Tribunal and has not been verified,

15 ITA.Nos.1662 & 1663/Hyd./2025 examined and considered by the authorities below therefore, by considering the facts and circumstances of the case and assessee being a Primary Cooperative Society we take a lenient view to grant one more opportunity to the assessee to produce this record before the Assessing Officer for verification and examination subject to cost of Rs.5,000/- each per case total amounting to Rs.10,000/- [Rs. Ten Thousand Only] to be paid to the ITAT Tax Bar Association, Hyderabad within a period of one month from the date of this Order. Accordingly, the impugned orders of the learned CIT(A) are set aside and the matters are remanded to the record of the Assessing Officer for fresh adjudication after verification, examination and consideration of the additional evidence filed by the assessee before the Tribunal. Needless to say, assessee be given proper opportunity of hearing before passing the fresh Order.

16 ITA.Nos.1662 & 1663/Hyd./2025 To sum up, both the appeals of the Assessee are allowed for statistical purposes. A copy of this common order be placed in the respective case files

Order pronounced in the open court on 08.07.2026.

Sd/- Sd/- MANJUNATHA G VIJAY PAL RAO ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, dated 08th day of July, 2026 VBP Copy to: THE PRIMARY AGRICULTURAL COOPERATIVE SOCIETY LTD, 1-10/1, BETHAMPUDI, TEKULAPALLY, 1 YELLANDU, KHAMMAM-507123, TELANGANA ITO WARD-1, INCOME TAX OFFICE, GANESH TEMPLE 2 MAIN ROAD, KOTHAGUDEM, KOTHAGUDEM-507101, TELANGANA 3 THE PR. CIT, HYDERABAD. 4 THE D.R., ITAT, HYDERABAD B-BENCH, HYDERABAD 5 GUARD FILE

VADREVU TRUE COPY Digitally signed by VADREVU PRASADA PRASADA RAO ASSISTANT REGISTRAR / Date: 2026.07.08 RAO I.T.A.T., HYDERABAD 11:56:43 +05'30'