MELPATTAMBAKKAM PACCS LTD.,CUDDALORE vs. ITO, WARD-4,, CUDDALORE

PER INTURI RAMA RAO, ACCOUNTANT MEMBER:

This appeal filed by the Assessee directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], dated 26.02.2026 passed u/s.250 of the Income Tax Act, 1961 for the Assessment Year 2019-20. 2. Briefly, the facts of the case are that appellant society is a Primary Agricultural Cooperative Society. It is formed with an object of providing credits

facilities and accepting deposits from its members. No regular return of income was filed by the appellant society under the provisions of section 139(1) of the Income Tax Act for the Assessment Year 2019-20. 3. However, based on the information that the appellant had made cash deposits of Rs.22,88,401/- and made cash withdrawals of Rs.1,08,81,342/- in the bank account maintained with Cuddalore District Central Co-op Bank during the previous year relevant to assessment year under consideration, the Assessing Officer formed an opinion that the income got escaped assessment from tax. Accordingly, a notice u/s.148 of the Act was issued on 28.03.2023, after duly complying with the procedure laid down u/s.148A of the Act. In response to notice u/s.148 of the Act, the appellant filed return of income on 01.05.2023 disclosing Nil income after claiming deduction u/s.80P of the Act. Against the said return of income, the assessment was completed by e-Assessment Unit of the Department (hereinafter called ‘AO’) vide order dated 12.02.2024 passed u/s.147 r.w.s 144 read with section 144B of the Act at a total income of Rs.22,88,401/-. While doing so, the Assessing Officer made addition of Rs.22,88,401/- being cash deposits in the bank account for the failure of the appellant to substantiate the sources of cash deposits made in the bank account.

Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn.

Therefore, it would be noticed that the powers of the CIT(A) is coterminous with that of the Assessing Officer i.e. he can do all that Assessing Officer could do.

Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open

to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.” Unquote.

आदेश क" "ितिलिप अ"ेिषत / Copy of the Order forwarded to : अपीलाथ" / The Appellant.

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