GAFARIYA ALPA SANKHYATAR SAHAKARI PATTIN SANGH NI KOLHAR,VIJAYAPUR vs. INCOME TAX WARD (1) AND TPS, VIJAYAPUR

PDF · subscribers
ITA 2752/BANG/2025Status: DisposedITAT Bangalore18 May 2026AY 2023-245 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that cash deposits could be from members' deposits or loan repayments, and withdrawals could be properly recorded. Since the assessee claimed not to have received notices and was not given a reasonable opportunity, the orders of the AO and CIT(A) were set aside for de novo consideration.

What were the facts?

The assessee, a Credit Co-operative Society, claimed nil income and a loss. The AO treated cash deposits and withdrawals as unexplained money under Section 69A and interest income as income from other sources under Section 56, as the assessee did not provide details. The CIT(A) dismissed the appeals ex-parte due to non-compliance.

What were the issues?

Whether cash deposits and withdrawals by a co-operative society can be treated as unexplained money without proper verification, and whether the assessee was denied a reasonable opportunity to present its case.

Which sections of the Income-tax Act were involved?

Section 69A,Section 56

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH : BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI SOUNDARARAJAN K

For Respondent: Shri. N. Balusamy, JCIT(DR)(ITAT), Bengaluru
Hearing: 25.02.2026Pronounced: 18.05.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI SOUNDARARAJAN K, JUDICIAL MEMBER

ITA Nos.2752, 2753-Bang-2025 Assessment Years : 2023-24, 2017-18 M/s. Gafariya Alpa Sankhyatar Vs. ITO, Sahakari Pattin Sangh Ni Kolhar, 00 Ward – (1) & TPS, At Post Kolkhar, Taluka Kohar, Dist Vijaypur. Vijayapur, Vijayapur – 586 210. PAN : AACAG 4903 B APPELLANT RESPONDENT Assessee by : None Revenue by : Shri. N. Balusamy, JCIT(DR)(ITAT), Bengaluru. Date of hearing : 25.02.2026 Date of Pronouncement : 18.05.2026 O R D E R Per Soundararajan K, Judicial Member : These appeals are filed by the assessee against Orders of NFAC, Delhi, dated 23.09.2025 for the Assessment Years 2023-24 and 2017-18.

2.

The appeals are taken up for hearing simultaneously since the issues are common and the appeal in ITA 2752/Bang/2025 is taken as a lead case and the decision arrived in the appeal would mutatis mutandis applies to the other appeal.

3.

The brief facts of the case are that assessee is a Credit Co-operative Society registered under the provisions of Karnataka Co-operative Societies

ITA Nos.2752, 2753-Bang-2025 Page 2 of 5

Act. The case of the assessee was selected for compulsory scrutiny and notices under sections 143(2) as well as 142(1) of the Act were issued. The assessee filed its return of income on 30.09.2023 in which assessee had claimed Nil income and claimed a loss of Rs.58,83,639/-. The AO, based on the information available with him that the assessee had made the cash deposits into their bank account and also the cash withdrawals made from their bank account, had sought for the details about the said deposits and withdrawals. Similarly, the AO had also found that the assessee had term deposits with the said bank and also received interest on securities based on Form 26. The assessee had not responded and submitted documentary evidences to the above said notices. Therefore, the AO had treated the cash deposits as well as the cash withdrawals as unexplained money under section 69A of the Act. The AO had also treated the interest income received on various securities as income from other sources. Thereafter, the AO had also issued a notice under section 133(6) of the Act to the said banks and the AO had based on the details available with him and also on the basis of the details furnished by the said banks had treated the cash deposits as unexplained money. Similarly, the interest income was also added as income from other sources under section 56 of the Act.

4.

As against the said orders, the assessee filed appeals before the learned CIT(A). During the appellate proceedings, the learned CIT(A) had issued 3 hearing notices on various dates but the assessee had not responded to any of the said notices and therefore the learned CIT(A) had dismissed the appeals on the ground that the assessee had not furnished any evidence during the appellate proceedings to disprove the finding of the AO. The present appeals have been filed by the assessee challenging the said ex-parte orders of the learned CIT(A).

ITA Nos.2752, 2753-Bang-2025 Page 3 of 5

5.

At the time of hearing, the learned AR not appeared and therefore the appeals are taken up for hearing based on the available materials and after hearing the arguments of the Ld DR.From the records we found that the cash deposits are nothing but the members’ cash deposits into their saving bank account and loan account held with the assessee and therefore the said deposits should not be treated as unexplained money under section 69A of the Act. Similarly, it was submitted that the withdrawal of the cash from their bank accounts are properly recorded in the books of accounts and thereafter the same should not be treated as unexplained money under section 69A of the Act. It was further averred that the assessee being a Co- operative Society is subject to the audit of the Co-operative Audit Wing of the Government and therefore there could not be an unexplained money in the hands of the assessee. It was their contention that the assessee had not received any notice and therefore they are not able to participate in the assessment as well as appellate proceedings. It was also a fact that the learned CIT(A) had issued 3 hearing notices and therefore submitted that the assessee was not provided reasonable opportunity to represent its case before him and therefore prayed that the opportunity may be granted to the assessee to place the material facts before the AO.

6.

The learned DR relied on the orders of the lower authorities and submitted that the assessee even though a Co-operative Society had not co- operated with the Department and therefore the order of the lower authorities may be sustained.

7.

We heard the arguments of the ld.DR.. It is the case of the assessee that they have not received the hearing notices from the AO and therefore were not able to appear before the AO. The fact remains that assessee is a

ITA Nos.2752, 2753-Bang-2025 Page 4 of 5

Co-operative Society offering credit facilities to its members. In such circumstances, we cannot ignore the fact that the members could have deposited their money into the SB Account maintained with the assessee and also the members could have repaid the loan amount by cash and in that circumstances, the normal presumption would be that the deposits made by the assessee into their bank account is having source and therefore it could not be treated as unexplained money under section 69A of the Act. Even though the facts are like this, they neither appeared before the AO nor before the learned CIT(A) and also before us and in that circumstances, the authorities below had no opportunity to look into the submissions made by the assessee. The submissions made by the assessee may be true but it was not verified by the authorities.

8.

Considering the fact that the learned CIT(A) had also granted the 3 hearing dates within a period of 2 months, we are inclined to set aside the order of the learned CIT(A) as well as the order of the AO for denovo consideration. The AO may send the notices to the email ID mentioned in Form 36 i.e., mgprofessionls10@gmail.com and thereafter proceed to complete the assessment in accordance with law. We also make it clear that if the assessee did not respond to the notice issued by the AO, it is open to the AO to pass orders afresh in accordance with law.

ITA Nos.2752, 2753-Bang-2025 Page 5 of 5

9.

In the result, both the appeals filed by the assessee are allowed for statistical purposes.

Pronounced in the open court on the date smentioned on the caption page.

Sd/- Sd/- (PRASHANT MAHARISHI) (SOUNDARARAJAN K) Vice President Judicial Member Bangalore, Dated : 18.05.2026. /NS/* Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order

Assistant Registrar ITAT, Bangalore.

More judgments on Section 69A

All 15,297 judgments and leading authorities on Section 69A →

Recent GST High Court judgments

Search GST case law →