INCOME TAX OFFICER, WARD-DHUBRI, DHUBRI vs. VINAY KUMAR HARLALKA, GUWAHATI

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ITA 111/GTY/2026Status: DisposedITAT Guwahati24 April 2026AY 2022-236 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found the CIT(A)'s order to be casually and improperly passed, lacking consideration of the assessee's actual facts and grounds. The order was set aside, and the appeal was restored to the CIT(A) for a fresh decision.

What were the facts?

The Revenue appealed against the CIT(A)'s order which allowed the assessee's appeal. The CIT(A) had erroneously decided the case based on facts and grounds pertaining to a cooperative society, not the individual assessee. The assessee had not claimed deduction under Section 80P, but the CIT(A) allowed it.

What were the issues?

Whether the CIT(A) erred in passing an order based on incorrect facts and grounds, leading to a misdecision on the assessee's appeal.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 144B,Section 37(1),Section 80P

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, GUWAHATI ‘DB’ BENCH AT KOLKATA

Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

This appeal filed by the Revenue is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2022-23 dated 10.12.2025. 2. The Revenue is in appeal before the Tribunal raising the following grounds of appeal:

“1. Whether on the facts and circumstances of the case, the Ld. CIT (A), NFAC, New Delhi has erred in depicting the facts and reference made in the passed order under section 250 of the Income tax Act, 1961 date 10.12.2025. 2. Whether on the facts and circumstances of the case, the Ld. CIT (A), NFAC, New Delhi has erred in mentioning the grounds of appeal as submitted by appellant during the course of appeal proceedings and also to mentioning of grounds for condonation of delay. Since, the assessee has filed the appeal with in due time and there was no delay in filing appeal.

3.

Whether on the facts and circumstances of the case, the Ld. CIT (A), NFAC, New Delhi has erred in mentioning the Brief facts and Findings and determination given in the appellant case. The mentioned facts and findings which never matched nor relate to the case of the assessee, Sri Vinay Kumar Harlalka, PAN-ABHPH3382C, A.Y-2022-23. 4. Whether on the facts and circumstances of the case, the Ld. CIT (A), NFAC, New Delhi has erred in referring the case law Madras High Court in CIT v. Tamil Nadu Co-operative Marketing Federation Ltd. 144 ITR 74 (Mad), and Mavilayi Service Cooperative Bank Limited and Others v. Commissioner of Income Tax, Calicut and Another, which does not match the fact and circumstances of the case of the assessee for A.Y 2022-23. 5. Whether on the facts and circumstances of the case, the Ld. CIT (A), NFAC, New Delhi has erred in mentioning all facts stated and reference made to the assessment order which do not relate to the assessee, Sri Vinay Kumar Harlalka, PAN-ABHPH3382C, A.Y 2022-23. It seems to be like typographical error occurred while generating the order under section 250 of the Income tax Act, 1961 date 10.12.2025. 6. The appellant craves the leave to add/modify/alter any or on all the grounds during the course of hearing/pendency of appeal.”

3.

Brief facts of the case are that the assessee had filed his return of income for AY 2022-23 declaring total income of ₹40,18,060/-. The case was selected for scrutiny assessment under the Faceless Assessment Scheme on the issues of Compulsory Scrutiny i.e. (i) High liabilities as compared to low income/receipts and (ii) The assessee had made substantial purchases from suppliers who were Non-Filer(s). The Assessing Officer (hereinafter referred to as Ld. 'AO') noticed that the assessee had transactions with some parties which were consistently non-filers. To verify the genuineness of the transaction, the notices u/s 133(6) of the Act were issued to these parties, however, in reply only one party i.e. M/s. Vaishno Devi Traders Pvt. Ltd. submitted the copy of ledger but no bills, vouchers and other details as per notice u/s 133(6) of the Act were submitted. The assessee was asked to provide the details of purchases and expenses shown to have been incurred by him during the year under consideration; however, no details were provided.

Accordingly, the amount of ₹20,08,50,472/- was disallowed which was added to the total income of the assessee u/s 37(1) of the Act. The Ld. AO completed the assessment u/s 143(3) r.w.s. 144B of the Act determining the total income of the assessee at ₹20,48,68,532/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who, vide order dated 10.12.2025 allowed the appeal of the assessee, by giving his finding as under: “The appellant has claimed deduction under section 80P of the Income tax Act. 1961 of Rs.46,67,587/-. The Assessing Officer completed the assessment under section 143(3) vide order dated 08.09.2022 by making the following additions and denying the claim of 80P. The appellant has claimed that G.1254 SAIDAPETA APCMS is an agricultural producers marketing society registered under the Tamil Nadu Co-Operative Societies Act, 1983. The appellant has submitted that the whole of the amount of profits attributable to the marketing of agricultural produce grown by the members of society is deductible under section 80P (2)(a)(iii) of Income tax Act, 1961, hence, the same has been claimed as deduction under chapter-VI-A of Rs. 46,67,587/-. In this regard, the reliance is placed on Madras High Court in CIT v. Tamil Nadu Cooperative Marketing Federation Ltd. 144 ITR 74 (Mad), wherein it has been held that agricultural cooperative societies can claim tax exemptions under Section 80P(2)(a)(iv) for profits derived from sales to their member societies (e.g., fertilizers), provided the conditions are met.

Respectfully following the Supreme Court in the case of Mavilayi Service Cooperative Bank Limited and Others v. Commissioner Of Income Tax, Calicut And Another, granted special leave to appeal, thereby allowing IAs Nos. 192273 and 192277 of 2019, which addressed the core issue revolved around whether the cooperative societies were entitled to the deductions under Section 80-P(2)(a)(i) of the Income Tax Act, especially after the enactment of Section 80-P(4) by the Finance Act, 2006. In the instant case also the appellant is a PACS registered under Tamil Nadu Co-Operative Societies Act, 1983. The principal objective of the society is the marketing of agricultural produce grown by the members of society. In view of various judgments including the Supreme Court in the case of Mavilayi Service Cooperative Bank Limited and Others v. Commissioner of Income Tax, and Madras High Court in CIT v. Tamil Nadu Co-operative Marketing Federation Ltd. 144 ITR 74 (Mad), the income of Rs. 46,67,587/- has also ITA No(s). 111/GTY/2026 Assessment Year(s) 2022-23 been earned during the course of various activities relating to purpose of the society and reported under the head of income from business, since it is attributable to the business carried out by the appellant, it is also exempt under section 80P. Hence, grounds of appeal number 2 is allowed. Regarding, addition of Rs.99,03,693 to the total income as unexplained creditors/liabilities made by AO as the same remained unverified, it is held that these liabilities arose during the course of business activity of the society. As per the appellant the society place important role in implementation of the public distribution system and involves in purchase and sale of agricultural produce. In view of the role of the Primary Agricultural Co-operative Society registered under Tamil Nadu Co-Operative Societies Act, 1983, subjected to various State Government audits, held exempted u/s 80P of the IT Act in above para, the addition of Rs.99,03,693 to the total income as unexplained creditors/liabilities made by AO is deleted. Hence, grounds of appeal number 3 is allowed.

6.

In result, the appeal is allowed.”

4.

Aggrieved with the order of the Ld. CIT(A), the Revenue has filed the appeal before the Tribunal.

5.

None appeared on behalf of the assessee and the case was heard with the assistance of the Ld. DR.

6.

The Ld. DR drew our attention to the fact that the Ld. CIT(A) has not considered the facts of the case, but the facts as well as the findings of some other case have been mentioned in the appeal order. In fact the assessee had filed the appeal in time and there was no condonation of delay yet in the order the delay has been condoned. It was requested that the order of the Ld. CIT(A) may be set aside and that of the Ld. AO may be restored.

7.

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). It is a matter of concern that the appellate order has been passed in a very casual and lackadaisical and absurd manner without considering even the basic details of the facts of the case and the grounds of appeal of the assessee and the facts and the grounds of appeal of some other case of a society have been mentioned. The assessee is an individual and had not claimed any deduction under section 80P of the Act, yet the appeal has been decided on the issue of the deduction under section 80P of the Act. The Bench was of the view that no proper finding has been given on the legal issue raised by the assessee. Therefore, the order of the Ld. CIT(A) is set aside and the appeal is restored to him to be decided afresh by passing a speaking order on the issues raised by the assessee. Needless to say, the assessee as well as the Ld. AO both shall be given a reasonable opportunity of being heard to make any further submission they want to make and they shall not seek unnecessary adjournments and rule 46A of the I.T. Rules, 1962 shall also be followed. Accordingly, Ground Nos. 1 to 5 of the appeal filed by the Revenue are allowed for statistical purposes while Ground No. 6 is general in nature and does not require any separate adjudication.

7.

In the result, the appeal filed by the Revenue is allowed for statistical purposes. Order pronounced in the open Court on 24th April, 2026. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 24.04.2026 Bidhan (Sr. P.S.)

Copy of the order forwarded to:

1.

ITO, Ward-Dhubri.

2.

Vinay Kumar Harlalka, 2nd Floor, Saraf Building Annex, A.T. Road, Paltan Bazar, Guwahati, Assam, 781001. 3. CIT(A)-NFAC, Delhi.

4.

CIT-

5.

CIT(DR), Guwahati Benches, Guwahati.

6.

Guard File. //// By order

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