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Facts
The assessee, a primary agricultural cooperative credit society, did not file its return for AY 2019-20. The AO reopened assessment and added Rs.2,38,88,559/- as unexplained cash deposits. The CIT(A) dismissed the assessee's appeal, but the assessee contended that the deposits were loan repayments by members and that the CIT(A) did not provide proper opportunity.
Held
The Tribunal found merit in the assessee's argument that the CIT(A) failed to provide a reasonable opportunity. Therefore, the matter was remitted back to the AO for fresh adjudication, with directions to grant the assessee proper opportunity to present its case and furnish complete details.
Key Issues
Whether cash deposits made by a primary agricultural cooperative credit society constitute unexplained income; whether the CIT(A) erred by not providing the assessee a reasonable opportunity to explain the source of these deposits.
Sections Cited
147, 144B
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2019-20 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 05.02.2025 in the matter of assessment framed by the Assessing Officer [AO] u/s. 147 r.w.s 144B of the Income-tax Act,1961 (hereinafter “the Act”) on 16.02.2024.
The assessee is a primary agricultural cooperative credit society and has not filed its return of income for the relevant assessment year.
The A.O reopened the assessment for the reason that the assessee had made a cash deposit of Rs.2,38,88,559/- and has not filled the return. The A.O in assessment order passed u/s. 147 r.w.s 144B of the Act, has made the addition of Rs.2,38,88,559/- as the assessee has not furnished any details regarding the source of the cash deposits made into its bank account. On appeal, the Ld. CIT(A) dismissed the appeal on the ground that the assessee failed to file any documentary evidence to substantiate the nature and source of the said cash deposits.
Before us, the Ld. Authorized Representative (A.R) of the assessee has submitted that the assessee is a cooperative primary agriculture cooperative credit society and the main business of the society is to lend loan to its members. The Ld AR submitted that the cash deposits are the loan repayment by the members of the society through the cash made along with interest and principles. Further, the Ld. AR has submitted that the Ld. CIT(A) has issued only one notice and has decided the matter without providing proper opportunity and requested for one more opportunity to explain the source of cash deposits.
The Ld. Departmental Representative (DR), has relied on the orders of lower authorities.
We have heard the rival submissions, and perused the materials available on record. The assessee is a primary agricultural cooperative credit society and addition of cash deposit has been made by the A.O as assessee has not explained the source. The assessee has explained that these cash deposits are repayments of loan by members. The Ld. A.R has submitted that the Ld. CIT(A) has decided the matter without affording them proper opportunity to present their case. We find merit in the submission of Ld AR, therefore remit the matter back to the file of the A.O for fresh adjudication after providing a reasonable opportunity to the assessee to present its case. The assessee is also directed to appear before the A.O on the date of hearing without fail and furnish complete details for fresh consideration. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 17th day of June, 2025 at Chennai.