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Facts
The assessee, a primary agricultural co-operative credit society, filed appeals against the Ld. CIT(A)'s orders for AY 2015-16 and 2016-17. The Assessing Officer initiated reassessment proceedings for AY 2015-16 after noting significant cash deposits and non-filing of the return, treating the unexplained difference as undisclosed income under Section 69A and disallowing a deduction claimed under Section 80P. The Ld. CIT(A) dismissed the assessee's appeal due to non-compliance and enhanced the assessment.
Held
The Tribunal condoned the 144-day delay in filing the appeal, considering the non-compliance before Ld. CIT(A) was not willful and partly due to the Covid-19 pandemic. Recognizing the Ld. CIT(A)'s enhancement and the need for the assessee's cooperation on additions under Sections 69A and 80P, the Tribunal remanded the matter for both assessment years back to the Assessing Officer for fresh consideration, granting the assessee another opportunity to submit evidence.
Key Issues
1. Justification of disallowance under Section 80P(2) and additions under Section 69A due to unexplained cash deposits. 2. Whether the Ld. CIT(A) was justified in dismissing the appeal and enhancing the assessment without providing sufficient opportunity to the assessee. 3. Condonation of delay in filing the appeal.
Sections Cited
139(1), 148, 143(2), 142(1), 69A, 115BBE, 80P(2), 147, 144B
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Before: Shri S.S. Viswanethra Ravi&
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
Both the appeals filed by the assessee are directed against separate orders dated 29.08.2024 and 18.02.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment years 20015-16 and 2016-17 respectively.
Since, the issues raised in both the appeals are similar based on the same identical facts, with the consent of both the parties, we proceed to hear both the appeals together and pass consolidated order for the sake of convenience.
First, we shall take appeal in - AY 2015-16 for adjudication.
We find that this appeal is filed with a delay of 144 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication.
The assessee raised 5 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the disallowance made by the Assessing Officer under section 80P(2) of the Income Tax Act, 1961 [“Act” in short] by passing exparte order.
We note that according to the Assessing Officer, the assessee made cash deposits of ₹.2,15,92,860/- in its bank account during FY 2014-15 relevant to AY 2015-16 and received insurance commission of ₹.293/- and did not file return of income for AY 2015-16 under section 3 & 829/Chny/25 139(1) of the Act. Thus, the Assessing Officer issued notice under section 148 of the Act dated 25.03.2021 requiring the assessee to file return of income. The assessee filed e-return on 28.04.2021 declaring total income to NIL, but, however, the return was not marked as filed in response to notice under section 148 of the Act and thus, the Assessing Officer held the return is invalid and thereby, notice under section 143(2) of the Act could not be generated. Thereafter, the Assessing Officer issued notice under section 142(1) of the Act and in response to the notice, the assessee filed copy of computation of income, P & L account, balance sheet, etc. From the details furnished by the assessee, the Assessing Officer noted that the assessee is doing trading of goods and shown trade income of ₹.62,71,120/-, receipt of interest income of ₹.30,71,339/- and miscellaneous receipt of ₹.1,70,031/- totalling to ₹.95,13,185/-. However, as per the data available with the Department, the Assessing Officer noted that the assessee made cash deposit of ₹.2,15,92,860/- and since the assessee could not furnish ledger extract or any other details for the difference amount of ₹.1,20,79,675/- [₹.2,15,92,860 – ₹.95,13,185/-], the same was considered as income from undisclosed sources under section 69A r.w.s. 115BBE of the Act.
The Assessing Officer further noted that the assessee has shown gross total income at ₹.7,56,308/- and claimed entire income as 4 & 829/Chny/25 deduction under section 80P of the Act on the ground that the assessee is in the business of loan to its members for agricultural purchases and did not furnish any evidence in support of allowability of deduction claimed under section 80P of the Act. Since the assessee has declared trade income in the computation of income, the Assessing officer disallowed the claim of deduction of ₹.7,56,308/- under section 80P of the Act and added to the total income of the assessee and completed the assessment under section 147 r.w.s. 144B of the Act dated 30.03.2022. On appeal, besides dismissing the appeal filed by the assessee since the assessee did not comply with the hearing notices or filed any documentary evidences in support of grounds of appeal, the ld. CIT(A) enhanced the assessment.
The ld. AR Shri S. Sridhar, Advocate submits that non-compliance to the hearing notices issued by the ld. CIT(A) is neither wilful nor deliberate but due to circumstances beyond assessee’s control. He further submits that the underlying reassessment proceeding commenced and a substantial part of it was also conducted during the Covid-19 pandemic period, owing to which the assessee was prevented from filing particulars to the level seemingly expected during reassessment. Moreover, the ld. CIT(A) has enhanced the assessment. The ld. AR brought on record an affidavit, wherein, the assessee undertakes to provide full and utmost cooperation before the Assessing Officer and prayed that, one more opportunity may be afforded to the assessee to substantiate its claim before the Assessing Officer.
The ld. DR Ms. R. Anita, Addl. CIT opposed the same and drew our attention to para 5 of the impugned order and argued that the ld. CIT(A) afforded ample opportunities to the assessee, but, it was not availed.
Heard both the parties and perused the material on record. We note that the assessment was completed under section 147 r.w.s. 144B of the Act dated 30.03.2022. On perusal of the impugned order, we note that there was no assistance from the assessee to the hearing notices issued by the ld. CIT(A). We find the assistance of assessee is necessary in terms of additions involves under section 69A as well as under section 80P of the Act, when the ld. CIT(A) has enhanced the assessment. We also note that the ld. AR brought on record an affidavit, wherein, the assessee undertakes to extend full and utmost cooperation before the Assessing Officer and prayed for affording one more opportunity to the assessee. Taking into consideration of the submissions of the ld. AR and the ld. DR and in the interest of justice, we deem it proper to afford one more opportunity and remand the matter to the file of the Assessing Officer to decide the issue afresh after considering the written submissions / documentary evidences as may be filed by the assessee to substantiate its claim. Thus, the grounds raised
by the assessee are allowed for statistical purposes. AY: 2016-17
11. We find the issue in AY 2016-17 are similar to the facts and circumstances relevant to AY 2015-16 in wherein, we have remanded the matter to the file of the Assessing Officer for fresh consideration and, therefore, we hold our findings would be equally applicable to the assessment year under consideration. Thus, the grounds raised by the assessee for AY 2016-17 are allowed for statistical purposes.