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Facts
The assessee, a Primary Agricultural Credit Society, filed its return of income disclosing interest income and claiming deduction u/s.80P, resulting in 'NIL' income. The AO noted significant cash deposits, treated them as unexplained money u/s.69A, and disallowed the deduction u/s.80P due to lack of registration certificate. The assessee appealed to the Ld.CIT(A), but the appeal was dismissed on grounds of delay.
Held
The Tribunal held that the Ld.CIT(A) was not justified in dismissing the appeal solely on the ground of delay without considering the sufficient cause explained by the assessee. The Tribunal condoned the delay and set aside the order of the Ld.CIT(A) to restore the appeal to the file of the AO for de novo assessment.
Key Issues
Whether the Ld.CIT(A) erred in dismissing the appeal on the ground of delay without condoning it, and whether the assessee was provided with adequate opportunity by the AO.
Sections Cited
148, 80P, 69A, 144, 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER ABY T. VARKEY, JM:
1. This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, dated 08.08.2024 for the Assessment Year (hereinafter referred to as "AY”) 2015-16.
The main grievance of the assessee is against the action of the Ld.CIT(A) passing the impugned order without going into the merits of the grounds of appeal raised by the assessee and not admitting the appeal assigning the reason that the appeal was belatedly filed after ‘86’ days delay. Therefore, the Ld CIT(A) didn’t condone the delay and didn’t admit the appeal.
The Ld.AR also brought to our notice that the assessee is a Primary Agricultural Credit Society registered under the Tamil Nadu Co-operative Societies Act, 1983 and in response to the notice u/s.148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) filed its return of income (RoI) on 12.12.2023, by disclosing interest income of Rs.13,01,615/- and claimed deduction u/s.80P of the Act, thereby disclosed ‘NIL’ income. The AO further noted that the assessee during the year has deposited a sum of Rs.6,10,64,830/- and failed to submit any information regarding the source of cash deposits as well as didn’t file copy of the certificate of registration of the society. Therefore, the AO treated the entire cash deposits in its accounts as unexplained money u/s.69A of the Act and made an addition of Rs.6,10,64,830/-. Thereafter, the AO disallowed the deduction claimed u/s.80P to the tune of Rs.
Rs.13,01,615/- on the ground that the assessee failed to submit the copy of the certificate of registration of the society and proposed addition of both the aforesaid additions by issuing notice dated 09.03.2024; and pursuant thereto, assessee replied that the society borrow funds and the cash deposits made in its accounts were out of cash balance of the society. But the AO repelled the same by stating that assessee didn’t furnish any relevant documentary evidence to show the cash balance available as on 31.03.2015 and the details of funds borrowed, etc. The AO acknowledged that the assessee filed counterfoils of cash deposits, but according to him, assessee couldn’t explain the source of cash deposits.
Therefore, being not satisfied about the nature and source of cash deposits, he added Rs.6,10,64,830/- u/s.69A of the Act as well as denied deduction u/s.80P of the Act since assessee failed to furnish the certificate of registration of the society and disallowed Rs.13,01,615/- and thus made total addition of Rs.6,23,66,445/- by framing the assessment order dated 19.03.2024.
Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) who was pleased to dismiss the same only on the ground of delay of ‘86’ days in filing of the appeal and held it as barred by limitation and thus didn’t admit the appeal. Aggrieved, the assessee-society is before us.
Heard both the parties and perused the records. We don’t countenance the impugned action of Ld CIT(A) not admitting the appeal, merely because assessee filed belatedly appeal by 86 days. The assessee society represented by the Ld.AR explained the delay in filing of appeal before Ld CIT(A), and taking note of the cause which prevented the assessee from filing the appeal within the time prescribed, we are of the view that there exists sufficient cause for condoning the delay of ‘86’ days in filing of the appeal before the First Appellate Authority. Therefore, we condone the delay of ‘86’ days. Having said so, we note that the AO has made huge additions of Rs.6,23,66,445/-. In this regard, it is noted that the assessee is a Primary Agricultural Cooperative Credit Society and its activities are monitored by the Registrar of Co-operative Societies and the statutory audit is carried out by the Tamil Nadu Cooperative Department auditors. According to the AO, he has issued several notices (7 notices) which he acknowledges that the assessee has not received [refer Page No.2 of the assessment order]. However, the AO notes that two notices i.e. show cause notice u/s.144 of the Act dated 24.01.2024 and show cause notice dated 09.03.2024 were received by the assessee and the assessee has responded partly to it and the AO has passed the order within ‘10’ days of the last show cause notice. Considering the overall facts of the case and taking note that only two notices could be served upon the assessee and the entire deposits have been brought to tax u/s.69 of the Act, we are of the view that the assessee didn’t get proper opportunity before the AO and therefore relying on the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC), we are inclined to set aside the impugned order (AY 2015-16) AA 252 Byannapuram PACCS Ltd. of the Ld.CIT(A) and restore the assessment back to the file of the AO for de novo assessment; and assessee is imposed cost of Rs.10,000/- which the assessee should remit to the State Legal Aid Authority, Hon’ble Madras High Court, and produce necessary proof of depositing of the same before the AO; and the Ld.AR undertakes to file written submissions/relevant documents before the AO to substantiate the nature and source of cash deposits; and also file relevant documents for claiming deduction u/s.80P of the Act; and the AO to pass order in accordance to law after hearing the assessee.
In the result, appeal filed by the assessee is allowed for statistical purposes.