INCOME TAX OFFICER, WARD 1(5), KOLHAPUR, KOLHAPUR vs. RAJIVGANDHI GRAMEEN BIGARSHETI PATH SANSTHA MARYDIT, KUDNUR, KUDNUR, KOLHAPUR

Facts of the case, in brief, are that the assessee is a co-operative society engaged in the activity of providing credit facilities to its members. The return of income was not filed by the assessee and the case was selected for scrutiny on the basis of cash deposited during demonetization period. Notices u/s 142(1) were issued to the assessee. The assessee neither attended nor any submission was filed before the Assessing Officer. Therefore, the assessment was completed u/s 144 of the IT Act by determining total income of Rs.2,02,56,693/- against the income returned by the assessee at Rs.Nil. The above assessed income includes addition of Rs.10,69,000/- as unexplained money deposited during demonetisation u/s 69A of the IT Act and also Rs.1,91,87,693/- unexplained money u/s 69A cash deposited during whole of the financial year. 4. In first appeal, after considering the reply of the assessee, Ld. CIT(A)/NFAC deleted both the above additions and allowed the appeal of the assessee by observing as under :- 3

Observation and Decision:

It is this order against which the Revenue is in appeal before this Tribunal. 6. Ld. DR appearing from the side of the Revenue submitted before us that the order passed by Ld. CIT(A)/NFAC is not justified. It was submitted by Ld. DR that Ld. CIT(A)/NFAC has accepted fresh evidences from the assessee and did not allowed the Assessing Officer to examine the additional evidences admitted by him during the appellate proceedings and therefore, the provisions under Rule 46A(3) of the IT Rules were not followed. In this regard, it was further submitted that during the course of appellate proceedings, the assessee has furnished various documents which includes audit report in Form 3CA/3CD, copy of cash books and copy of various bank accounts & details of deposit during demonetisation. Accordingly, Ld. DR submitted before the Bench that Ld. CIT(A)/NFAC has contravened the Rule 46A(3) of the IT rules and erred in not calling for any remand report from the 5 Assessing Officer and therefore it was requested before the Bench to set-aside the order passed by Ld. CIT(A)/NFAC and restore the assessment order. 7. Ld. AR appearing from the side of the assessee submitted before us that earlier the assessee co-operative society was allotted PAN No.AAABR1249J in the capacity of body of individuals but Income Tax portal was not permitting to file return or audit report with this PAN. Therefore, the assessee obtained a new PAN No.AACAR8831P on 08.10.2016 and all the transactions were carried on through this new PAN, even the return for the assessment year under consideration i.e. for A.Y. 2017-18 was also filed under this new PAN. Subsequently, the Assessing Officer issued 142(1) notice on earlier PAN and the assessee society could not respond to the above 142(1) notice, consequently the assessment order was passed ex-parte and the whole of the cash deposits and also the cash deposited during the demonetization period was added as total income of the assessee. In first appeal, these facts were brought in the knowledge of the Ld. CIT(A)/NFAC that the ex-parte assessment order was passed on earlier PAN of the assessee which was not in use, however the audit report and income tax return was filed on new PAN. The copy of audit report in Form 3CA/3CD and 6 copy of ITR-V and even the copy of assessment order which was passed on the basis of return filed on new PAN & copy of various bank account statements were furnished before Ld. CIT(A)/NFAC. Apart from above documents, list of persons who have deposited cash of Rs.10,69,000/- during demonetization was also furnished before Ld. CIT(A)/NFAC. It was contended before the Bench that Ld. CIT(A)/NFAC has accepted the fact that the ex-parte assessment order was passed on earlier/inactive PAN of the assessee society and the assessee society has already furnished audit report and income tax return on new PAN wherein all the impugned transactions were incorporated in the regular books of accounts. It was submitted before the Bench that after considering all the documents and the fact that the assessee society has obtained another PAN and return was filed on the new PAN and even the assessment order u/s 143(3) was also passed on the basis of return of income filed on new PAN, Ld. CIT(A)/NFAC allowed the appeal of the assessee which is justified. It was also submitted by Ld. AR that the assessment order was passed by an officer of the Department for the same assessment year and there was no new documents which were required to be verified from the Assessing Officer. Therefore, even if the documents furnished by the assessee 7 were not sent to the Assessing Officer who passed ex-parte assessment order there cannot be said to be any error. On the basis of all the above facts, Ld. AR requested before the Bench to dismiss the appeal filed by the Revenue. 8. We have heard Ld. Counsels from both the sides and perused the material available on record. It is an admitted fact that the assessee society was allotted two PAN Nos. one was in the capacity of body of individual and subsequently another was in the capacity of co-operative society/AOP. The assessee society was not using the earlier PAN No.AAABR1249J but has filed return of income and audit report on new PAN No.AACAR8831P. It was the sole contention of Ld. DR that the procedure envisaged in Rule 46A(3) was not followed by Ld. CIT(A)/NFAC and without forwarding these documents to the Assessing Officer for verification, the relief has been granted which is unjustified. We find that Ld. AR has furnished copy of ITR- V which was furnished on new PAN & copy of its assessment order passed u/s 143(3) of the IT Act for the period under consideration. We also find that the return of income for the period under consideration furnished on new PAN was selected for scrutiny through CASS for verification of huge deduction claimed u/s 80P of the IT Act. Whereas the impugned 8 ex-parte assessment order was passed on the basis of information of huge cash deposited during demonetisation period & also during whole of the year on old PAN. It is therefore apparent that the assessee has not informed the new PAN to the bank authorities & the old PAN was being utilised in the bank accounts & therefore the information of cash deposit during demonetisation & also during whole of the year was forwarded on the basis of old PAN. We also find that the Assessing Officer who passed assessment order on new PAN has neither verified the cash deposited during demonetisation period nor the cash deposited during whole of the financial year. The Assessing Officer has only verified the deduction claimed under Chapter VI-A and passed the assessment order. Considering the totality of the facts of the case, we find some force in the arguments of Ld. DR that Ld. CIT(A)/NFAC should have had called the remand report from the Assessing Officer on additional evidences furnished before him before allowing the relief to the assessee. Accordingly, we deem it fit to set-aside the order passed by Ld. CIT(A)/NFAC & remand the matter back to his file to decide the appeal afresh after providing an opportunity to the Assessing Officer under rule 46A(3) to verify the additional evidences 9 furnished before Ld. CIT(A)/NFAC. Thus, the grounds of appeal raised by the Revenue are partly allowed. 9. In the result, the appeal filed by the Revenue is allowed for statistical purposes. Order pronounced on 17th day of January, 2025. (MANISH BORAD) JUDICIAL MEMBER

गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER,