SNEHA MAHILA MUTUALLY AIDED COOPERATIVE THRIFT AND CREDITS SOCIETY LIMITED,HYDERABAD vs. ITO, WARD-9(1), HYDERABAD

At the outset, there is a delay of 465 days in filing the present appeal before the Ld. CIT(A). The assessee has filed an affidavit through its President, Smt. Challa Manimma, explaining the reasons for the delay. The learned counsel for the assessee, Shri P. Murali Mohan Rao, C.A., referring to the affidavit filed by the President of the assessee, submitted that the assessment order under section 147 r.w.s. 144 and section 144B of the Income-tax Act, 1961, was passed on 30.03.2022 and the appeal against the said order was required to be filed on or before 29.04.2022. However, the appeal could not be filed within the prescribed period as the concerned staff of the assessee had misplaced the assessment order and the same was not brought to the notice of the management.

It was further submitted that the assessee came to know about the assessment order only subsequently, whereupon immediate steps were taken to prefer an appeal before the Ld. CIT(A). Accordingly, the appeal came to be filed on 07.08.2023, resulting in a delay of 465 days. It was further submitted that the delay had

The learned Senior A.R. for the Revenue, Shri K. Prasad, on the other hand, opposed the condonation petition filed by the assessee and submitted that the assessee has failed to explain the substantial delay with sufficient cause and, therefore, the delay should not be condoned.

We have heard both the parties and perused the petition and affidavit filed by the assessee seeking condonation of delay of 465 days in filing the appeal before the Tribunal. We find that, the reasons explained by the assessee appear to be genuine and bona fide and come under ‘sufficient cause’. We further find that, the Hon'ble Supreme Court in the case of Collector, Land Acquisition Vs. MST Katiji, reported in 167 ITR 471, has laid down certain principles for condoning the delay and directed that a lenient approach should be followed to avoid dismissal of meritorious cases on technical grounds. Going by the principles laid down in MST Katiji (supra), and also considering the submissions of the

The brief facts of the case are that the assessee is a Co- operative Society registered under the Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995 and is engaged in providing credit facilities to its members. The assessee did not file its return of income for the A.Y. 2016-17. Based on information available on the Insight Portal that the assessee had made cash deposits in its bank account amounting to Rs.1,54,24,735/-, proceedings under section 147 of the Income-tax Act, 1961 were initiated and notice under section 148 dated 30.03.2021 was issued to the assessee. During the course of reassessment proceedings, notices under section 142(1) of the Act, dated 18.11.2021, 23.12.2021, 18.02.2022 and 11.03.2022 were issued calling for necessary details and explanations regarding the source of cash deposits. Although the assessee filed certain replies and furnished copies of financial statements, by-laws and bank statements, it did not furnish complete details called for by the Assessing Officer with regard to the source of cash deposits.

During the course of reassessment proceedings, the A.O., on verification of the bank statements, noticed that the assessee had deposited cash amounting to Rs.1,62,04,785/- in its bank account maintained with State Bank of India, Kandukur Branch, during the financial year 2015-16 relevant to the A.Y. 2016-17. According to the A.O., since the assessee failed to furnish details of members, cash book, ledgers and other supporting evidences to establish the source of the cash deposits, the entire amount of Rs.1,62,04,785/- was treated as unexplained money under section 69A of the Act. Accordingly, the A.O. completed the assessment under section 147 r.w.s. 144 r.w.s. 144B of the Act, vide order dated 30.03.2022, determining the total income of the assessee at Rs.1,62,04,785/-.

Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). Before the learned CIT(A), the assessee submitted that it is a Co-operative Thrift and Credit Society functioning on the principle of mutuality and the deposits appearing in the bank account represented repayments of loans by its members. The assessee further submitted that the cash deposits were duly reflected in the receipts and payments account

The learned CIT(A), after considering the facts available on record, observed that the appeal itself was filed with a delay of 478 days and the assessee had failed to furnish any satisfactory explanation for condonation of the delay. The learned CIT(A) observed that the reason assigned by the assessee, viz., the order was misplaced by the staff, was not supported by any material evidence and, therefore, did not constitute ‘sufficient cause’ for condoning the inordinate delay. Accordingly, the learned CIT(A) declined to condone the delay of 478 days and dismissed the appeal in ‘limine’ without adjudicating the grounds raised by the assessee on merits.

Aggrieved by the order of the learned CIT(A), the assessee is now in appeal before the Tribunal.

The learned counsel for the assessee, Shri P. Murali Mohan Rao, C.A., submitted that the learned CIT(A) was not justified in dismissing the appeal on the ground of delay without appreciating the facts and circumstances of the case. The learned counsel for the assessee submitted that the delay in filing the appeal occurred due to bona fide reasons and was neither deliberate nor intentional. The learned counsel for the assessee further submitted that the learned CIT(A), after noticing the issues raised by the assessee in the grounds of appeal, ought to have adjudicated the appeal on merits instead of dismissing the same on technical grounds. Therefore, he submitted that the order passed by the learned CIT(A) may be set aside and the matter may be restored back to the file of the learned CIT(A) for fresh adjudication after providing one more opportunity to the assessee.

The learned Senior A.R. for the Revenue, Shri K. Prasad, on the other hand, supported the order of the learned CIT(A). However, he fairly submitted that the issue may be decided in

We have heard both parties, perused the material available on record and had gone through the orders of the authorities below. There is no dispute with regard to the fact that the learned CIT(A) dismissed the appeal filed by the assessee in ‘limine’ by declining to condone the delay of 478 days in filing the appeal and, consequently, did not adjudicate the issues raised by the assessee on merits. We further find that, the A.O. completed the assessment under section 147 r.w.s. 144 r.w.s. 144B of the Act, by treating the cash deposits of Rs.1,62,04,785/- as unexplained money under section 69A of the Act. However, the assessee has consistently contended that the cash deposits represented repayments of loans by its members and that the society is functioning on the principle of mutuality. Considering the facts and circumstances of the case and also having regard to the nature of the issues involved, in our considered view, one more opportunity needs to be provided to the assessee to substantiate its claim before the A.O.

Considering the facts and circumstances of the case, we are of the considered view that, the issue needs to be set aside to the file of the A.O. for fresh consideration. Accordingly, we set aside the assessment order and restore the issues involved in the assessment back to the file of the A.O. with a direction to reconsider the same de novo after providing reasonable opportunity of hearing to the assessee. The assessee is also directed to cooperate with the A.O. and furnish necessary details and evidences in support of its claim. Further, since the assessee failed to diligently pursue the proceedings before the authorities below and the appeal before the learned CIT(A) was filed with an inordinate delay of 478 days, we direct the assessee to pay costs of Rs.10,000/- (Rupees Ten Thousand only) to the Tax Bar Association, ITAT, Hyderabad and furnish proof of payment to the Registry within 15 days from the date of this order. We order accordingly.

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