KUNIAMUTHUR CO-OPERATIVE STORES LIMITED,COIMBATORE vs. INCOME TAX OFFICER NON CORP WARD 4(1), COIMBATORE

Briefly stated facts of the case are that the appellant is a co-operative society, registered under The Tamilnadu Co-operative Societies Act, 1983. The appellant Co-operative Society. The appellant society filed return of income for the Assessment Year 2017-18 on 06.10.2017 disclosing NIL Income. No scrutiny assessment was made. Based on the information that the appellant made cash deposits during the Demonetization Period of Rs.19,23,500/-. The Assessing Officer formed an opinion that income got escaped assessment from tax. Accordingly, a notice u/s.148 of the Act on 31.03.2021 calling upon the appellant to file the Return of Income. The appellant neither filed the Return of Income in response to notice u/s.148 of the Act nor responded to the notice u/s.142(1) of the Act. In the circumstances, the e-Assessment Unit of the Department (hereinafter called ‘AO’) proceeded with making best judgment assessment order vide order dated 30.03.2022 passed u/s.147 r.w.s 144 read with section 144B of the Act at a total income of Rs.19,23,500/-. While doing so, the Assessing Officer treated the cash deposits in specified bank notes during the Demonetization Period of Rs.19,23,500/- as unexplained money of the appellant as the appellant failed to explain the sources of the said cash deposits.

Being aggrieved by the above assessment order, the appellant preferred an appeal before ld.CIT(A) with a delay of 854 days. The appellant also filed a petition seeking for condonation of delay on the ground that delay had occurred on account of negligence of Chartered Accountant, who was handling the tax matters of the appellant society. However, the Learned Commissioner of Income Tax(Appeal) had refused to condone the delay and dismissed the appeal in limine on the grounds of delay.

Being aggrieved by the order of ld.CIT(A), the appellant is in appeal before us in the present appeal. The Learned Counsel submits that the ld.CIT(A) ought to have condoned the delay in presenting the appeal before the ld.CIT(A) having record to the explanation offered by the appellant explaining the reasons for the delay in filing of appeal. He further submits that the part of that period is covered Covid-19 Pandemic.

On the other hand, ld.Sr.DR vehemently opposed the above submissions.

We heard rival submissions and perused the material available on record. The issue that arises for our consideration is whether the ld.CIT(A) was justified in dismissing the appeal on the grounds of delay by refusing the condonation of delay. Admittedly, there is a delay of 854 days(out of which part period is covered under Covid-19 Pandemic) in presenting the appeal before the ld.CIT(A). The appellant filed a petition seeking the condonation of delay on the ground that the delay in filing of appeal had occurred on account of negligence of Chartered Accountant, who was handling the tax matters of the appellant society, as a result, appellant was not able to file the appeal within the stipulated time. However, ld.CIT(A) had refused to condone the delay by stating that no sufficient cause was shown for the delay. On careful perusal of the findings of ld.CIT(A), it would be clear that the ld.CIT(A) had not given findings as to how the explanation offered by the appellant for delay does not constitute a reasonable cause. The averments made in the affidavit remain uncontroverted by the learned Sr.DR.

In M.Kalappa Sethi Vs. M.V.Laxmi Narain Rao AIR 1973 SC 627, it was held that an uncontroverted affidavit shall be taken as an affidavit on fact. The averments made in the Affidavit seeking the condonation of delay in filing appeal before the ld.CIT(A), remain uncontroverted by the learned ld.CIT(A). In the absence of any material to the contrary, the averments made in the affidavit cannot be brushed aside. Therefore, we are of considered opinion that the ld.CIT(A) ought to have condoned the delay in filing the appeal and admitted the appeal for adjudication on merits. In the circumstances, we direct ld.CIT(A) to admit the appeal for adjudication on merits.

In the result, appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open court on 21st May, 2026.