TNSPL 52 KAYATHAR PRIMAARY AGRICULTURE CO-OP SOCIETY,CHENNAI vs. ITO, TUTICORIN

The order of the ADDL/JCIT (A) Thane dated 04.03.2026 vide DIN & Order No. ITBA/APL/S/250/2025-26/1086834130(1) for the above-mentioned Assessment Year is contrary to law, fact and in circumstances of the case.

The ADDL/JCIT (A) Thane erred in treating the appeal preferred before them as time barred in terms of Section 249(2) of the Act and consequently erred in dismissing the appeal without assigning proper reasons and justification.

The ADDL/JCIT (A) Thane failed to appreciate that the statutory requirement of filing the appeal before the First Appellate Authority within 30 days from the date of receipt of the order in terms of Section 249(2) of the Act was erroneously considered as mandatory and ought to have appreciated that the said provisions envisaged discretion vested with the authority to entertain belated appeals subject to the satisfaction on the reasons shown for the belated filing in terms of Section 249(3) of the Act, there by vitiating the impugned order in its entirety.

The ADDL/JCIT (A) Thane failed to appreciate that reason for filing the appeal before the First Appellate Authority belatedly by 1,665 days was captured in Form No. 35 / petition for condonation and ought to have been considered the same as 'sufficient cause' and further ought to have appreciated that the non-consideration of the said reasons would vitiate the order under consideration on this preliminary issue.

The ADDL/JCIT (A) Thane erred in sustaining the restriction of the claim of set off of current year losses to the tune of Rs. 35, 50,192/- as against the reported set off of current year losses at Rs. 57, 87,728/- and consequently erred in sustaining the addition of Rs. 22, 37,540/- as income of the appellant for the assessment year under consideration without assigning proper reasons and justification.

The ADDL/JCIT (A) Thane failed to appreciate that the disputed adjustment made was outside the purview of the scope of adjustment contemplated in Section 143(1) of the Act, there by vitiating the impugned adjustment made in the intimation order dated 06.04.2021. 7. The ADDL/JCIT (A) Thane failed to appreciate that arbitrary restriction of the set off of current year losses was wholly unjustified and not sustainable in law and ought to have appreciated that the adjustment made without examining the validity of tax exemption / reporting of the financials in the hands of the appellant herein would vitiate passing of the impugned order in its entirety.

The ADDL/JCIT (A) Thane failed to appreciate that having not brought on record any cogent reasoning / basis for the arbitrary re-quantification of total tax payable including non-issuance of communication as mandated in terms of Section 143(1)(a) of the Act, the disputed adjustment made in the intimation order should be reckoned as bad in law.

The ADDL/JCIT (A) Thane failed to appreciate that the entire computation of taxable total income was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law.

The ADDL/JCIT (A) Thane failed to appreciate that in the light of the scrutiny assessment passed and attained finality, the intimation order under consideration should be considered as effaced/nonexistent RAR PRIMARY AGRI

The ADDL/JCIT (A) Thane failed to appreciate that having not adhered to the prescription of faceless regime, the consequential appellate order passed should be reckoned as bad in law.

The ADDL/JCIT (A) Thane failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law.

The Appellant craves leave to file additional grounds/arguments at the time of hearing.

The brief facts of the case are that the assessee cooperative society filed its return of income u/s. 139(1) of the Act on 30.12.2020 declaring total income at Rs. Nil. The return of the assessee was processed u/s. 143(1) of the Act vide intimation dated: 06.04.2021 at a figure of Rs. 22, 37,540/-. Thereafter, the case of the assessee was selected for scrutiny under CASS to verify the followings: i). High creditors/liability; ii) Investments/advances/loans; iii) Excess contribution to provident fund, superannuation fund or gratuity funds & iv) Deduction from total income under chapter VI-A of the Act. Ultimately, the assessment of the assessee was completed at a figure of 1, 47, 12,424/- (Including Rs. 22, 37,540/- u/s. 143(1) of the Act) u/s. 143(3) r.w.s 144B of the Act.

The assessee being aggrieved with the same preferred an appeal before the Ld. CIT (A), who in turn allowed the appeal of the assessee and deleted the additions made during the proceedings u/s. 143(3) r.w.s 144B of the Act, but the AO while passed order giving effect order u/s. 250 r.w.s. 143(3) of the Act confirmed the adjustment made by the CPC, Bengaluru amounting to Rs. 22, 37,540/-. The assessee being further aggrieved with the same preferred the present appeal before us. We have gone through the intimation issued u/s. 143(1), assessment order passed u/s. 143(3) r.w.s 144B of the Act and the order of the Ld. CIT (A).

It is observed that the assessee is a primary agricultural cooperative society and engaged in providing short term credit facilities to its members by way of loans for crops, fertilizers and equipment for agricultural activities. The Ld. CIT(A) followed the decision of the Hon’ble Juri iction High Court decision in the case of Thorapadi Urban Co-op. Credit Society Ltd. vs. Income Tax Officer [2023] 156 taxmann.com 419 (Mad.) and CIT vs. Salem Agricultural Producers Co-Op. Marketing Society Ltd. [2016] 76 taxmann.com 225 (Mad.). In both these decisions the decisions relied upon by the AO were considered namely Totgars Co-op. Sale Society Ltd. vs. Income Tax Officer, Karnataka [2010] 188 taxman 282 (SC.), State Bank of India [2016] 72 taxmann.com 64 (Guj.), PCIT, Hubballi vs. Totgars Co-op. Sale Society Ltd. [2017] 83 taxmann.com 140 (Kar.) and The Mavilayi Service Co-Op. Bank & Ors. vs. CIT Civil Appeal Nos. 7343-7350 of 2019, Dated:12.01.2021. 5. It is further observed that the Revenue is not in appeal against the order of the Ld. CIT (A) in the matter under consideration. In view of this it is considered to be final in the case of the assessee and the Revenue does not have any say on the matter under consideration. As far as the order giving order passed by the AO u/s. 250 r.w.s. 143(3) of the Act confirmed the adjustment made by the CPC, Bengaluru amounting to Rs. 22,37,540/- is concerned, we find that here the doctrine of merger will come into picture and the adjustments as proposed by the CPC, Bengaluru is concerned, became an integral part of the order of the AO passed u/s. 143(3) r.w.s. 144B of the Act and once the appeal of the assessee is duly allowed by the Ld. CIT(A) against the order of the AO passed u/s. 143(3) r.w.s. 144B of the Act, there is no room left for the AO to ignore the order of the Ld. CIT(A), i.e. giving relief for the additions made u/s. 143(3) r.w.s. 144B of the Act and chosen to ignore the adjustments made by the CPC, Bengaluru. Action of the AO is untenable and against the procedure and spirit of the Act, hence the same is quashed with a direction to pass a fresh order under u/s. 250 r.w.s. 143(3) of the Act with reference to our order and apply the decision of the Ld. CIT(A) on the balance amount of Rs. 22,37,540/- also as the same is also integral part of the assessee’s earnings from its operations and are entitled to be considered for the purposes of relief as directed by the Ld. CIT (A).

In the light of the above discussions and observation, when we are restoring the matter back to the AO to follow the directions of the then Ld. CIT(A), and the order of the Ld. Addl./JCIT (A), Thane became infructuous and dismissed, as the relief has already been provided by us in para 5 (supra) of this order. In the result, grounds taken by the assessee are allowed in above terms.

In the result, the appeal of the assessee is allowed with the above observations and directions.