PRATHAMIKA KRUSHI PATTINA SAHAKAR SANGHA NIYAMIT SAVANAHALLI,VIJAYAPURA vs. INCOME TAX OFFICER, WARD-1 AND TPS, VIJAYAPURA

ITA 1722/BANG/2025Status: DisposedITAT Bangalore30 September 2026AY 2016-176 pages
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What did the Tribunal hold?

The Tribunal admitted the additional grounds of appeal, noting they were purely legal and critical for fair adjudication, with all facts already on record. The Tribunal condoned the delay of 111 days in filing the appeal before the NFAC, finding the explanation offered by the assessee to be plausible and a sufficient cause for the delay. The Tribunal reasoned that the assessee society's limited education and unawareness of tax provisions constituted a practical problem preventing timely filing. Having condoned the delay, the Tribunal deemed it fit to remit the entire issue in dispute back to the Assessing Officer (AO) for a fresh decision in accordance with law. The assessee was directed to produce all necessary documents and evidence, and granted a reasonable opportunity of being heard. The Tribunal did not decide the merits of the addition under Section 69A or the procedural issues related to the assessment proceedings, as these were to be addressed by the AO upon remand.

What were the facts?

The assessee, Prathamika Krushi Pattina Sahakar Sangha Niyamit, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging an order passed by the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2016-17. The original assessment order was passed ex-parte by the Assessing Officer (AO) on January 11, 2024, treating cash deposits of Rs. 91,96,344/- in Vijayapura District Central Co-operative Bank Ltd. as unexplained money under Section 69A of the Income Tax Act, 1961. The NFAC dismissed the assessee's appeal due to a delay of 111 days in filing, without adjudicating on the merits of the case. The assessee contended that the delay was due to the limited education of its board members and CEO, who were agriculturists and unaware of income tax provisions.

What were the issues?

1. Whether the initiation of reassessment/assessment proceedings and the issuance of notice under Section 148 of the Income Tax Act, 1961, were in accordance with law, particularly the Faceless Assessment Scheme, 2021, and whether the AO had the jurisdiction to initiate such proceedings (turning on Section 148 and the Faceless Assessment Scheme, 2021). 2. Whether the addition of Rs. 91,96,344/- by invoking Section 69A of the Act is bad in law, considering the assessee is a Credit Co-operative Society and the source of deposits are from its members, and whether such amounts can be treated as 'undisclosed source of income' (turning on Section 69A). 3. Whether the NFAC erred in dismissing the appeal on the ground of delay in filing the appeal and ought to have accepted the explanation and condoned the delay of 111 days (turning on principles of natural justice and condonation of delay). Assessee's Contentions: - The initiation of proceedings and notice under Section 148 were not in accordance with the Faceless Assessment Scheme, 2021, and the AO lacked jurisdiction. - The addition of Rs. 91,96,344/- under Section 69A is bad in law as the deposits are from members of a credit co-operative society and cannot be treated as undisclosed income. The AO/NFAC failed to appreciate that only 'real income' is taxable and failed to grant deductions for interest expenditure and cost of funds. - The delay of 111 days in filing the appeal before the NFAC was due to the limited education of the board members and CEO, who were agriculturists and unaware of tax laws, and therefore, the delay should have been condoned in the interest of natural justice. Revenue's Contentions: - The assessee has not given any sufficient cause for belatedly filing the appeal before the NFAC.

Which sections of the Income-tax Act were involved?

Section 148,Section 69A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B’’ BENCH: BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY

Hearing: 29.07.2026Pronounced: 30.09.2026

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC Delhi dated 10.06.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1076854694(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2016-17. 2. The assessee has raised the following grounds of appeal:- Prathamika Krushi Pattina Sahakar Sangha Niyamit, Savanahalli Tax effect relating to each ground Grounds of Appeal of appeal (see note below)

1.

The order of the Hon'ble National Faceless Appeal

The order continues below.

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