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Facts
The assessee, engaged in mini banking, failed to file an Income Tax Return for AY 2015-16. Based on information about significant financial transactions, the AO assessed income by making additions for unexplained cash credits and investments. The CIT(A) dismissed the assessee's appeal, citing a lack of evidence for the source of cash deposits.
Held
The Tribunal remitted the case back to the Assessing Officer for fresh adjudication. This decision was made to provide the assessee with an opportunity to furnish documentary evidence regarding its business, the sources of cash deposits, and its claims for deduction under Section 80P, which it had failed to provide to the lower authorities.
Key Issues
Whether the additions made by the AO for unexplained cash credits and investments were justified, and whether the denial of deduction under Section 80P was appropriate, given the assessee's claims and newly presented documentation.
Sections Cited
69A, 69, 80P, 148, 139(1), 44AB, 44AA, 220(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH: KOLKATA
Before: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]
ORDER / आदेश Per Pradip Kumar Choubey, JM: This is the appeal preferred by the assessee against the order of Commissioner of Income Tax (Appeals)- NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)] dated 03.09.2024 for AY 2015-16. 2. Brief facts of the case of the assessee is that the assessee has been given a show cause notice on the basis of information available on record that the assessee has carried out significant financial transaction during the FY 2014-15 relevant to AY 2015-16.
Assessment Year: 2015-16 Tethibari Samabay Krishi Unnayan Samity limited However, the assessee did not file return of income for the relevant period. The assessee did not make any response with notice as well as show cause notice and failed to disclose income in its return of income. The AO has assessed income at Rs. 1,26,30,378/- on the following grounds: i) Variation of unexplained cash credit u/s 69A in saving bank account of Rs. 48,64,205/-. ii) Variation of unexplained investment u/s 69 in TDR at Rs. 9,05,000/- iii) Variation of unexplained cash deposit u/s 69A in banking company Rs. 65,91,000/-
3. Aggrieved by the said order, the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed.
Being aggrieved and dissatisfied the assessee preferred an appeal before us.
The Ld. Counsel has submitted before the Tribunal that the assessee is engaged in the business of mini banking and registered under West Bengal Society Act and its main activity is mobilization of fund. The Ld. Counsel submits that the assessee has to be given an opportunity to place its case before the AO as in course of proceedings the assessee failed to comply with the query made by the AO. The Ld. Counsel submits that the assessee possess documentary evidences that will establish the case of the assessee regarding its business and queries made by the AO. The Ld. Counsel further submits that the Ld. CIT(A) has also dismissed the appeal of the assessee by observing that the assessee did not file any evidence for the nature of sources of cash deposit made during the financial year under consideration. The Ld. Counsel has also filed paper before this Tribunal.
The ld. D.R supports the impugned order.
In the light of submission made by the assessee we have perused the order of AO as well as Ld. CIT(A), and find that the AO on the information available on the record regarding the transaction carried out by the assessee, sent notices and show cause notice Assessment Year: 2015-16 Tethibari Samabay Krishi Unnayan Samity limited but assessee did not furnish any certificate of registration. The AO declined the relief to the assessee u/s 80P by stating following reasons: i) The assessee is a co-operative society but certificate of registration has not been furnished and in the absence of the same, the validity up to which period is not ascertained. ii) As per reply, the version of the assessee is that the assessee engaged in carrying activity of mini banking business but it should not have a banking business. iii) the interest and dividend income is to be derived from another co-operative society only but no supporting evidence in this regard has been furnished. iv) The list and details of members have also not been furnished as to ascertain that the activity is primarily for only its members which fails to do so. v) The ITR should be correctly filed but not claimed in the return filed u/s 148 and also fails to file the ITR u/s 139(1) of the I. T. Act, 1961. vi) No financial books of accounts are got audited u/s 44AB by the Chartered Accountants as required to be maintained as per provisions of section u/s 44AA as the gross receipts shown at Rs. 5,48,13,694/- in the I & E A/c. vii) No ledger of loan provided and loan repaid has been provided.
Going over the reasons it appears to us that the assessee did not file any certificate of registration, no financial documents are got audited and further no ledger of loan provided. We have also gone through the order of Ld. CIT(A) and find that the Ld. CIT(A) has also held that in the present case the assessee did not file any evidence in the nature of source of cash deposits, the assessee fails to prove or repay with cogent evidence against such facts and findings. Before us, the assessee has filed following papers:
i) Certificate of Registration ii) Bye-laws iii) Minutes of Meeting held for loan to farmers iv) Audit Accounts with Audit report v) List of Deposit interest and loan interest as on 31.03.2015 vi) ITR Acknowledge from Assessment year 2015-16 to 2024-25 vii) Compliance letter dated 17.03.2016 viii) An application u/s 220(6) of I. T. Act, 1961 before the I.T.O. Ward-27(1), Haldia.
Assessment Year: 2015-16 Tethibari Samabay Krishi Unnayan Samity limited 8. Going over the order passed by the lower authorities and considering the submission made by the assessee, and for the interest of justice we are inclined to restore the appeal of the assessee to the file of AO for fresh adjudication and proper verification of the documents if any filed by the assessee. Accordingly, the appeal of the assessee is remitted back to the file of AO for fresh adjudication. The assessee is directed to co- operate in the proceedings. the order passed by the AO confirmed by the Ld. CIT(A) are hereby set aside.
In the result, the appeal filed by the assessee allowed for statistical purposes.
Order is pronounced in the open court on 2nd April, 2025
Sd/- Sd/- (Rajesh Kumar/राजेश कुमार) (Pradip Kumar Choubey /�द�प कुमार चौबे) Accountant Member/लेखा सद�य Judicial Member/�या�यक सद�य Dated: 2nd April, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Tethibari Samabay Krishi Unnayan Samity limited, Tethibari Kismat Bajkul, Kismat, Bajkul, S.O. East Midnapore, West Bengal-721655 2. Respondent – ITO, Ward-27(1), Haldia, East Midnapore 3. Ld. CIT(A)- NFAC, Delhi 4. Ld. PCIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail)