VEPPUR MILK PRODUCERS CO-OP. SOCIETY LTD.,CUDDALORE vs. ITO, WARD-4,, CUDDALORE

Society against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, dated 24.07.2024 for the Assessment Year (hereinafter referred to as "AY”)

At the outset, it is noted that there is a delay of ‘56’ days in filing of appeal. According to the assessee, it is a Society of Milk Producers; and mainly, the office bearers are also farmers and therefore, they were not aware of the passing of the impugned order and came to know only when the AO initiated recovery proceedings. Immediately, then the assessee filed an appeal belatedly with ‘56’ days delay. Having gone through the affidavit, we find that the notice issued by the Ld.CIT(A) had gone to the ‘SPAM’ account of the assessee and therefore, the assessee was in the dark about the proceedings going on before the appellate authority/Ld.CIT(A) which led to passing of the impugned order, wherein the Ld.CIT(A) refused to admit the relevant evidences filed by the assessee to prove the cash deposits in its bank account to the tune of Rs.1,03,19,000/-.

Further, it was brought to our notice that the AO had passed best judgment assessment u/s.144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘), since the assessee didn’t receive any notices which led to the AO passing the ex parte order adding the entire cash deposits in its Canara bank account. Being aggrieved by the action of the AO, the assessee preferred an appeal before the Ld.CIT(A), wherein, the assessee filed relevant evidences to prove the nature and source of cash deposits. However, the Ld.CIT(A) refused to admit the evidences on the specious plea that the assessee didn’t file any application under Rule 46A(1) of the of the Income Tax Rules, 1962 and thereafter, the Ld.CIT(A) confirmed the ex parte order of AO. We don’t countenance the action of the Ld.CIT(A). Undisputedly, the AO has passed ex parte order making addition of the entire cash deposit in the Canara bank to the tune of Rs.1,03,19,000/- since assessee didn’t respond to the notices issued by the AO on several dates. On appeal, it is noted that the assessee had filed the relevant evidences to substantiate the nature and source of the cash deposits. However, the Ld.CIT(A) has refused to admit the evidences merely on the ground that the assessee didn’t prefer/file any application for admission of evidences. Such an action of the Ld.CIT(A) can’t be accepted. It must be borne in mind that justice should not only be done, but it must be seem to be done. In this context, we take note of the Hon’ble Supreme Court decision in the case of United Bank of India v.