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Facts
The assessee, a housing co-operative society registered under the Karnataka State Co-operative Societies Act, 1959, has not filed any return of income for AY 2013-14 and 2017-18. The case was reopened under Section 147 of the IT Act, and the assessing officer made additions for disallowed interest income and bank credits.
Held
The Tribunal observed that the issue of entitlement to deduction under Section 80P needs to be considered by the lower authorities, and that bank credits cannot be presumed unexplained. Therefore, the matters were restored to the assessing officer for fresh decision.
Key Issues
Whether the assessee is entitled to deduction under Section 80P, and whether bank credits can be presumed unexplained without proper investigation.
Sections Cited
147, 80P, 80A(5)
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Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE
Before: SHRI WASEEM AHMED & SHRI PRAKASH CHAND YADAV
ORDER PER PRAKASH CHAND YADAV, JUDICIAL MEMBER Both appeals of the assessee are arising from the order of Ld.CIT(A) dated 23/09/2024 and relates to AY 2013-14 and 2017-18.
The brief facts of the case as coming out from the orders of the authorities below are that the assessee is a housing building co-operative society registered under the Karnataka State Co-operative Societies Act, 1959. It is pertinent to note here that as per the status of PAN data of the assessee, the status of the assessee is partnership firm. For the year under consideration, the assessee has not filed any return of income.
& 2254/Bang/2024 Thereafter on the basis of the information, revealing that the assessee was in the receipt of an income of Rs. 72,11,236/- from different banks. The case of the assessee has been reopened u/s. 147 of the IT Act. Thereafter, the proceedings of the present case have been transferred from NFAC to the jurisdictional assessing officer. Thereafter, so many notices were issued by the assessing officer. However, despite the issue of several notices, nobody appeared from the side of assessee. It is an admitted fact that the assessee has not filed any return of income for both the assessment years. Finally, the assessing officer assessed the income of the assessee by disallowing the interest income earned by the assessee to the tune of Rs. 1,21,34,479/- and the credits appearing in the bank account of the assessee amounting to Rs. 15,43,15,324/-.
Aggrieved with the order of the AO, the assessee filed appeals before the Ld.CIT(A). However, despite the issuance of so many notices from the officer of the Ld.CIT(A), no one appeared before the Ld.CIT(A) and hence the Ld.CIT(A) affirmed the additions made by the assessing officer.
Aggrieved with the order of the Ld.CIT(A), the assessee has come up in appeal before us and at the outset Ld. Counsel for the assessee prayed that one more opportunity before the AO may kindly be granted. When the Bench asked about the non-compliance of the notices of authorities below, the Ld.AR of the assessee submitted that the assessee was having two PAN Nos. and the assessee was pursuing the notices on the wrong PAN and hence could not be able to appear before the Ld.AO or the Ld.CIT(A).
The Ld.DR relied upon the orders of the authorities below.
We have heard the rival submissions and perused the materials available on record.
First of all, we would like to observe that it is a case where no return of income has been filed by the assessee for claiming the deduction of & 2254/Bang/2024 section 80P. Therefore, whether the assessee is entitled for deduction u/s. 80P or not in view of the provision of section 80A(5) as interpreted by the Hon’ble Kerala High Court in the case of Chirakara Service Co-Op Bank Ltd. vs. ITO reported in 384 ITR 490(Ker) and in the case of Nileshwar Range Kallu Chethu Vyavasaya Thozhilali Sahakarana Sangham v. CIT reported in 459 ITR 730(Ker) is a question which is to be considered by the lower authorities. Further it is also settled position of law that all credits appearing in the bank accounts cannot be presumed to be unexplained. Therefore, in the interest of justice, we restore these matters to the file of assessing officer for deciding it afresh subject to a cost of Rs. 20,000/- to be deposited by the assessee in the income tax department under the head “Others”. The assessee will deposit this amount and show the challan to the AO. Needless to say that the AO will grant sufficient opportunities to the assessee before passing any order.
In the result, both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on 27th March, 2025.