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Facts
The assessee, a Cooperative Society, filed its return declaring 'NIL' income. The AO denied exemption under Section 80P(2), disallowed a claim for provision for NPA, and added demonetized cash as unexplained money under Section 69A. The CIT(Appeals) dismissed the appeal, questioning the assessee's status as a cooperative society.
Held
The Tribunal found that the Assessing Officer had not disputed the assessee's status as a cooperative society and had acknowledged the submission of relevant documents like audited accounts and registration. Therefore, the CIT(Appeals)'s decision was considered incorrect.
Key Issues
Whether the assessee is a cooperative society and eligible for exemptions and deductions, and if the lower authorities properly adjudicated the issues without proper verification of evidence.
Sections Cited
80P(2), 69A, 142(1)
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Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 13th September, 2024 passed for Assessment Year 2017-18.
(A.Y. 2017-2018) Jaugram Gopalpur Skus Limited 2. Brief facts of the case are that the assessee is a Cooperative Society and filed its return of income for the assessment year 2017-18 declaring total income as ‘NIL’. The return was selected for scrutiny. During the scrutiny proceedings, ld. Assessing Officer denied the exemption claimed by the assessee under section 80P(2) of the Act. The ld. Assessing Officer also denied the claim of deduction of Rs.1,97,027/- under the head ‘provision for NPA’. The ld. Assessing Officer also made an addition of Rs.26,04,000/-, which was deposited in ICICI Bank during demonetization period by treating the said amount as unexplained money under section 69A of the Act.
On being aggrieved by the order of ld. Assessing Officer, the assessee preferred an appeal before the ld. CIT(Appeals).
After considering the written submission filed by the assessee, the ld. CIT(Appeals) dismissed the appeal of the assessee saying that “in absence of correct status of appellant and absence of audit by registrar of cooperative societies also points to the fact that the appellant is not a cooperative society”.
On being aggrieved, the assessee preferred an appeal before the Tribunal and raised the following issues:- (1) The CIT(Appeals), NFAC erred in confirming the addition as made by AO on account of addition of excess interest received by the assessee of Rs.2,21,823/- from fixed deposits in the year under consideration, which are eligible for deduction u/s 80P of the Income Tax Act, 1961 but the both the AO and CIT(Appeals) denied such deduction to the assessee and it is bad in law and therefore deserves to be deleted.
(A.Y. 2017-2018) Jaugram Gopalpur Skus Limited (2) The CIT(Appeals), NFAC erred in confirming the addition as made by AO on account of provision for NPA of Rs.1,97,027/-. (3) The CIT(Appeals), NFAC erred in confirming the addition as made by AO on account of cash deposit u/s 69A when there was no cash deposit at all but disbursement of loan and there was lack of observation on behalf of both the AO and the CIT(A), NFAC. (4) The CIT(A), NFAC passed a non-speaking order without going in the details of the matter and therefore, the appellate proceeding lacks proper adjudication.
I have heard both the sides. The assessee by filing the written submission, inter-alia submitted that the ld. CIT(Appeals) while passing the order made a comment that the assessee’s correct status cannot be figured out despite the fact that the ld. Assessing Officer, who is the first fact-finding authority, did not make any adverse inference regarding the legal status of the assessee and this tantamount to the fact that the ld. CIT(Appeals) while passing the order did not go through the assessment order properly, but made his comments. Therefore, the order passed by the ld. CIT(Appeals) is absolutely wrong, illegal and untenable. It was the further submission of the assessee that para 5 of page 2 of the assessment order, the ld. Assessing Officer has categorically said that the details of documents were furnished before the ld. Assessing Officer at the assessment stage which also includes audited accounts, Certificate of Registration under Societies Act, Bye-laws of the assessee-Society. It was the further submission of the assessee that the assessee has once again filed all the details before the Tribunal by way of paper book and he pleaded to remit the matter back to the file of ld. Assessing Officer to examine this (A.Y. 2017-2018) Jaugram Gopalpur Skus Limited issue afresh and pass the order on merit, since the ld. Assessing Officer has not looked into the evidences filed by the assessee.
On the other hand, ld. D.R. submitted that ld. Assessing Officer has considered all the evidences filed by the assessee and opined that there is no satisfactory evidence to substantiate the claim of the assessee-Society. Therefore, there is no infirmity in the order passed by the ld. Assessing Officer as well as ld. CIT(Appeals). He pleaded to uphold the orders passed by the revenue authorities.
I have perused the entire material available on record including the details filed by the assessee by way of paper book. It is an admitted fact that the assessee is a Cooperative Society and ld. Assessing Officer has not disputed the said fact. I have gone through the para 5 of page 2 of the assessment order, wherein ld. Assessing Officer has categorically mentioned that “in response to notice under section 142(1) dated 18.09.2019, the assessee submitted audited balance-sheet and profit & loss account, computation of income, bank account statement of current account no. 1131510200000135 held with Burdwan Central Cooperative Bank, Jamlapur Branch, Certificate of Registration under Societies Act, Bye-laws of the Society for the financial year 2016-17 related to assessment year 2017-18. Therefore, I am of the view that the order passed by the ld. CIT(Appeals) is not correct as assessee is a Society and there is no material to show that the assessee-Society is not a Registered Society.
(A.Y. 2017-2018) Jaugram Gopalpur Skus Limited 8.1. So far as the merits of the case is concerned, the assessee has filed the paper book regarding details of members and non- members of the Society, source of cash deposits and all other evidences.
I have also perused the above said details but I am of the view that it needs detailed verification and verification should be done by the ld. Assessing Officer. Hence, I am of the view that it is a fit case to remit the matter back to the file of ld. Assessing Officer to examine these issues afresh after providing opportunity of being heard to the assessee. At the same breath, I also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. Assessing Officer failing which the Ld. Assessing Officer shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 18/03/2025.