APMC SHIMOGA ,SHIMOGA vs. INCOME TAX OFFICER, WARD-1 & TPS, SHIMOGA

आयकर अपीलीय अधिकरण, बेंगलुरू पीठें, बेंगलुरू INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCHES, BANGALORE BENCH: A BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA 2909/Bang/2025 (निर्धारण वर्ा/Assessment Year : 2014-15) APMC SHIMOGA INCOME TAX OFFICER, 1, SAGAR ROAD, WARD-1 & TPS MARKETYARD APMC, SHIMOGA, KARNATAKA Vs. SHIMOGA S. O, SHIMOGA, KARNATAKA - 577204 अपीलधर्थी Appellant प्रत्यर्थी Respondent

Permanent Account Number of Assessee: AAJFA8437G

अपीलधर्थी द्वारा/Appellant represented by: Shri Narendra Sharma Advocate प्रत्यर्थी द्वारा/Respondent represented by: Sri. Venkatesh V, Addl CIT DR सुनवाई की तारीख / Date of conclusion of hearing: 05-Aug-2026 घोषणा की तारीख / Date of pronouncement: 21-Oct-2026 आदेश / ORDER PER SHRI PRASHANT MAHARISHI, VICE PRESIDENT 1) This appeal has been filed by the Agricultural Produce Market Committee, Shimoga (the “assessee” or “appellant”), for Assessment Year 2014–15, against the appellate order dated 31 July 2025 passed by the National Faceless Appeal Centre, Delhi (the learned CIT(A)). By that order, the learned CIT(A) dismissed the assessee’s appeal against the reassessment order dated 10 May 2023, passed under secton 147 of the Income-tax Act, 1961 (the “Act”) by the Assessment Unit of the Income Tax Department, stating that assessee could not represent its case or furnish any information to deviate from the order of the learning officer.

2) The Assessee has raised the following grounds of appeal:

4.1 The learned CIT[A] failed to appreciate that the addition made u/s. 69A of the Act is opposed to law and facts of the appellant’s case in as much as the cash deposits made by the appellant are from out of the known and explainable sources which are verifiable i.e., from out of the market fees, fines and other related charges and hence, the impugned addition made deserves to be deleted.

4.2 The addition made is purely on suspicion and surmise, assumptions and presumptions and without appreciating the material on record under the facts and in the circumstances of the appellant’s case.

3) The brief facts are that the assessee deposited ₹1,46,93,626 in cash into its bank accounts but failed to file its return of income for the relevant previous year and assessment year. In the absence of a return, the source of the cash deposits remained unexplained. Accordingly, a notice under section 142(1) was issued on 12 January 2023, requiring the assessee to explain the deposits. During the assessment proceedings, the assessee submitted that it was a regulatory body established by the State Government to prevent the exploitation of farmers; that agricultural produce was traded at its market yards, where it acted as an intermediary between farmers and buyers; that it collected cess and fees for providing infrastructure and related facilities; and that its income was exempt. The learned Assessing Officer observed that the assessee had explained its status rather than substantiating the source of the cash deposits and had not furnished adequate documentary evidence regarding either the deposits or its constitution. The claim of exemption was therefore not accepted. Consequently, the cash deposits of ₹1,46,93,626 were added under section 69A of the Income-tax Act, 1961, and the total income was assessed at ₹1,46,93,626 by an order dated 10 May 2023 passed under section 147 read with sections 144 and 144B of the Act.

4) Aggrieved, the assessee appealed to the learned CIT(A). Despite several notices, the assessee did not respond. The learned CIT(A) therefore dismissed the appeal, holding that the Assessing Officer had correctly assessed the cash deposited in the assessee’s bank accounts as income.

5) Thereafter, the assessee filed the present appeal. Its learned authorised representative, Shri Narendra Sharma, Advocate, submitted that the appeal was delayed by 71 days and filed an affidavit explaining the delay, together with an application for condonation. It was explained that the assessee was unaware of the appellate order because the authorised representative handling the matter had died on 22 July 2024. Owing to his death, the assessee could not attend to the departmental notices and related requirements, resulting in the delay in filing the appeal.

6) The learned Departmental Representative, Shri Venkatesh V., Additional Commissioner of Income Tax, strongly opposed the application for condonation of delay, contending that the assessee had not shown sufficient cause. Having carefully considered the request, we find that the delay arose from the death of the assessee’s counsel. As the assessee is an Agricultural Produce Market Committee, it could not file the appeal because, in the absence of its deceased consultant, the order of the learned CIT(A) and the related notices were not attended to. We therefore hold that the 71-day delay was supported by sufficient cause, condone the delay, and admit the appeal.

7) Before us, the learned authorised representative, Shri Narendra Sharma, Advocate, contended that the notice under section 148 of the Income-tax Act reopening the assessment for Assessment Year 2014–15 had been issued by the jurisdictional Assessing Officer. Pursuant to the Hon’ble Supreme Court’s decision in Union of India v. Ashish Agarwal [2022] 444 ITR 1 (SC), the original notice dated 29 June 2021, issued under the old regime, was treated as a show-cause notice under the new regime. The jurisdictional Assessing Officer thereafter issued a notice under section 148A(b) on 18 May 2022, allowing the assessee 15 days, until 2 June 2022, to respond. Although the assessee sought a further 15 days, it filed no objection. The jurisdictional Assessing Officer consequently passed an order under section 148A(d), with the approval of the learned Principal Chief Commissioner of Income Tax, Bangalore, under section 151. A fresh notice under section 148 was issued on 30 June 2022, followed by a letter dated 1 July 2022 communicating its document identification number. The learned authorised representative submitted that the notice dated 30 June 2022 was barred by limitation and that the assessment order should therefore be quashed.

8) The learned Departmental Representative, Shri Venkatesh V., Additional Commissioner of Income Tax, strongly supported the orders of the lower authorities. He submitted that the assessment had been reopened within the prescribed time, so those orders were not vitiated. He further contended that the assessee relied on legal and technical objections despite failing to explain to the lower authorities the substantial cash deposits made into its bank accounts.

9) We have carefully considered the rival contentions and perused the orders of the lower authorities. Ground No. 3 challenges the jurisdiction assumed for reopening the assessment. The assessee had not filed its return of income for Assessment Year 2014–15, although substantial cash deposits were found in its bank account. The Assessing Officer therefore issued a notice under section 148 of the Act on 29 June 2021. Pursuant to the Hon’ble Supreme Court’s decision in Union of India v. Ashish Agarwal (supra), that notice was treated as a notice under section 148A(b), and a further notice under that provision was issued on 18 May 2022. The assessee did not respond. Accordingly, the jurisdictional Assessing Officer passed an order under section 148A(d) on 30 June 2022, after obtaining the approval required under section 151 from the Principal Chief Commissioner of Income Tax, and issued a fresh notice under section 148 on the same date. The time allowed for responding to the notice under section 148A(b), including the further 15 days sought by the assessee, expired on 17 June 2022. Only two days of the original limitation period then remained. The order under section 148A(d) was therefore required to be passed by 19 June 2022. As it was passed only on 30 June 2022, and the fresh notice under section 148 was also issued on that date, both were barred by limitation. Respectfully following the Hon’ble Supreme Court’s decision in Union of India v. Rajeev Bansal [2024] 469 ITR 46 (SC) and the decisions of various coordinate benches, we quash the impugned order as time-barred.

10) Accordingly, Ground No. 3 of the assessee’s appeal is allowed. The remaining grounds are academic and require no adjudication. The appeal is therefore allowed on this basis.

11) In the result, the assessee’s appeal is allowed. Order pronounced in the open court on 21st October, 2026.

Sd/- Sd/- SOUNDARARAJAN K. PRASHANT MAHARISHI JUDICIAL MEMBER VICE PRESIDENT Bangalore Dated: 21.10.2026 *TNTS* Copy to: APMC SHIMOGA 1, SAGAR ROAD, MARKETYARD APMC, 1 SHIMOGA S. O, SHIMOGA-577204, KARNATAKA INCOME TAX OFFICER, 2 WARD-1 & TPS SHIMOGA, KARNATAKA 3 THE PCIT / CIT, 4 THE CIT(APPEALS) 5 THE D.R., ITAT, BANGALORE BENCH BY ORDER

ASSISTANT REGISTRAR I.T.A.T., BANGALORE P G Digitally signed by P G RAJANI RAJANI Date: 2026.10.30 16:34:02 +05'30'