THOL SEVA SAHKARI MANDALI LIMITED,MEHSANA vs. THE ITO, MEHSANA WARD-5, KADI

1766/Ahd/2025 2017-18 Thol Seva Sahkari Mandli Ltd. Thol B.O. Thol Mehsana – 382 728 (Gujarat) PAN: AABAT 5977 B (Assessee) The ITO Ward-5 Kadi – 382 715

At the outset, the Ld. Counsel for the assessee, has brought our attention to the impugned assessment orders in both the quantum appeals to show that the same are ex-parte/best judgement assessment orders passed by the AO. The Ld. Counsel for the assessee has further brought our attention to the impugned orders of the CIT(A) to show that the same are also ex-parte orders. There is no representation of the assessee either before the AO or before the Ld. CIT(A). The Ld. Counsel has further submitted that the Ld. CIT(A) has dismissed the appeals of the assessee being barred by limitation as there was a considerable delay in filing the appeals before the Ld. CIT(A). The Ld. Counsel has further submitted that the assessee is a Co-operative Society of farmers and its main activity is to provide financial accommodation to its members for agricultural purposes or for the purposes connected with the agricultural activities including purchase of agricultural implements, seeds and other related articles. The Ld. Counsel has submitted that the members of the Society are farmers and are mostly uneducated or less educated. They were not aware of the nitty- gritties of the Income-tax proceedings. That the accounts of the Society were being audited through the Government Auditor and apart from that they had also appointed a Chartered Accountant (CA), namely Mr.Piyush S. Patel, who was supposed to look into the other government compliances account related issues, income-tax issues, etc. The Ld. Counsel has further submitted that the members of the assessee-society were told that the income of the assessee- society was exempt from taxation and, therefore, they need not to file any income-tax return, etc. and, therefore, no return of income was filed.

1. That when the notice for assessment proceedings were received by the assessee-society in the year 2019, immediately, they consulted CA Mr. Piyush Patel and paid him requisite fees and he assured the assessee-society that he will to look into the matter and do the needful. It has been pleaded that the members of the society being themselves not much educated and being farmers, were totally dependent upon the CA Mr. Piyush Patel for the Income-tax proceedings. However, the said CA neither put in appearance nor filed the requisite details before the Income-tax Authorities, resulting into passing of the impugned assessment orders and delay in filing the appeals before the Ld. CIT(A). It has been pleaded that the assessee-society is a co-operative agricultural society and that the income of the assessee-society is exempt from taxation and further that there was no intention to avoid any tax on the income of the assessee and that all the lapses had occurred due to the negligence of the CA appointed by the assessee-society. The Ld. Counsel for the assessee brought our attention to the application for condonation of delay that was filed before the Ld. CIT(A), wherein, each of the factual aspect has been explained in detail.

We, after considering the aforesaid submissions and going through the record, asked the Ld. Counsel for the assessee as to whether he can show that the assessee-society had engaged the CA for income-tax proceedings and had paid any fees to him. At this, the Ld. Counsel for the assessee had furnished before us the Profit & Loss Account for Financial Year (FY) 2019-20 ending on 31/03/2020, wherein, the expenditure of Rs.21,500/- has been shown as “INCOME TAX/SALE TAX VAKIL FEES”. This shows that the assessee- society had engaged a Counsel for Income-tax proceedings. Further we note that the first hearing in the assessment proceedings was fixed by the AO on 02/09/2019 and the impugned assessment order was passed on 25/12/2019. ITA Nos.1766 to 1771/Ahd/2025 Asst.Years : 2017-18 & 2018-19

So far as the penalty related captioned appeals are concerned, since we have set aside the impugned orders of the Ld. CIT(A) relating to quantum additions, therefore, at this stage, quantum additions have accordingly been also set aside. Therefore, the impugned penalties, at this stage, have no legs to stand and, therefore, the same are accordingly ordered to be deleted. However, it is made clear that if during or at the conclusion of assessment proceedings relating to quantum additions, the AO will be of the view that the penalties under the relevant provisions of the Act are also leviable, he will be at liberty to initiate and impose the same afresh in accordance with law.

With the above observations, all the appeals of the assessee are treated as allowed for statistical purposes.

अपीलाथ' / The Appellant 2. !(थ' / The Respondent. 3. संबंिधत आयकर आयु. / Concerned CIT 4. आयकर आयु. ) अपील ( / The CIT(A)- (NFAC), Delhi 5. िवभागीय !ितिनिध , अिधकरण