HUBLI SARAKU SAGANIKENDRARA PATTINA SANGHA NIYAMITA,HUBBALI vs. INCOME TAX OFFICER, WARD - 2(1), HUBLI, HUBLI

At the outset, it is observed that in the zimini/daily order dated 13.08.2025 it is mentioned that delay in filing of appeal is rejected, which appears to be inadvertent mistake in the order sheet and having no effect in the instant case, as the impugned M/s. Hubli Saraku Saganikendrara Pattina Sangha Niyamita order was passed on 13.12.2024 and admittedly the Assessee had filed its appeal through e-filing on dated 13.01.2025 and therefore no delay is involved.

Coming to the merits of the case, we observe that the Assessing Officer (AO) vide assessment order dated 12.12.2019 u/s 143(3) of the Act has made the addition of Rs.63,87,500/- being unexplained cash credits in the books of account u/s 68 of the Act, to be taxed at the special rate as provided u/s 115BE of the Act.

The Assessee, being aggrieved, challenged the said addition by filing first appeal before the Ld. Commissioner, however, despite of affording various opportunities, eventually made no compliance and/or filed no submissions or documents and therefore in the constrained circumstances, the Ld. Commissioner, though affirmed the aforesaid addition of Rs.63,87,500/- by holding that “the appellant has not submitted list of customers/members who had deposited such SBNs after 08.11.2016 with the appellant society. Therefore, the appellant society has failed to discharge its onus of such SBNs. Hence, AO is justified in treating the cash deposit of Rs.63,87,500/- in the form of SBNs as unexplained income of the appellant society”, however, he directed the AO to allow the deduction u/s 80P of the Act on the interest income received from amount kept in co-operative banks, if such amount was not due to its members and was part of profits and gains.

Thus, the Assessee, being aggrieved against the decision of the Ld. Commissioner in affirmation of addition of Rs.63,87,500/- has preferred the instant appeal.

We have heard the parties and perused the material available on record. Admittedly, the Assessee had filed first appeal on dated 09.01.2020 against the assessment order dated 12.12.2019 u/s M/s. Hubli Saraku Saganikendrara Pattina Sangha Niyamita 143(3) of the Act, which was taken into consideration initially during Covid-19 period and thereafter in August 2023 and thereafter after a gap of 10 months and subsequently in 2024 and therefore the Assessee has claimed that because of huge gaps in hearings of the appeal and thus the Assessee could not represent its case in appropriate manner and therefore in the interest of justice and by remanding the case, one opportunity may be given to the Assessee to substantiate its claim.

On the contrary, the Ld. D.R. refuted the claim of the Assessee.

Having heard the parties and perused the material available on record, though contention raised by the Assessee appears to be non-convincing, however, it is a fact that the issue involved in the instant case also remained to be adjudicated by the Ld. Commissioner in its right perspective and proper manner, specifically in the absence of non-submitting the list of customers/members, who had deposited such SBNs after 08.11.2016 with the Assessee society, as observed by the Ld. Commissioner in the concluding part of the impugned order. Thus, for just and proper decision of the case, equitable relief, fairplay and substantial justice, we are inclined to remand the instant issue relating to the addition of Rs.63,87,500/- only to the file of the Ld. Commissioner for decision afresh, suffice to say by affording reasonable opportunity of being heard to the Assessee.

We also deem it appropriate to direct the Assessee to co- operate in the appellate proceedings before the Ld. Commissioner and file the relevant submissions and documents. We clarify that in case of subsequent default, the Assessee shall not be entitled for any leniency.

Thus, the case is accordingly remanded to the file of the Ld. Commissioner for decision afresh.

In the result, the Assessee’s appeal is allowed for statistical purposes.