SHUBH SHAKH SAHAKARI SOCIETY MARYADIT,RATLAM vs. ITO WARD - 2, RATLAM
Facts
The assessee, a cooperative society engaged in banking, appealed against the CIT(A)'s order which dismissed its appeal against the assessment order. The lower authorities had dismissed the appeal for non-compliance and failure to provide necessary documents.
Held
The Tribunal found that neither the AO nor the CIT(A) had conducted a meaningful discussion on the merits of the case. The dismissal was primarily due to the assessee's non-compliance, exacerbated by the death of its accountant.
Key Issues
Whether the lower authorities properly adjudicated the appeal on merits, or if the dismissal due to non-compliance and the death of the accountant warrants a de novo consideration.
Sections Cited
253, 144, 246A, 115BBE, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: B.M. BIYANI & SHRI PARESH M JOSHI
Per Paresh M Joshi, J.M:
This is an appeal filed by the assessee Under Section 253 of
the Income Tax Act, 1961 (hereinafter referred to as the “Act” for
sake of brevity) before this Tribunal. The assessee is aggrieved by
the order bearing Number ITBA/APL/S/250/2024-
25/1070446492(1) dated 19.11.2024 passed by the Ld. CIT(A)
u/s 250 of the Act which is hereinafter referred to as the
“Impugned order”. The relevant Assessment Year is 2017-18
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and the corresponding previous year period is from 01.04.2016 to
31.03.2017.
FACTUAL MATRIX
2.1 That as and by way of an assessment order bearing No.
ITBA/AST/S/143(3)/2019-20/1019233097(1) dated 22.10.2019
total income of the assessee was computed and assessed at
Rs.5,56,460/- u/s 144 of the Act. The assessee had e-filed its
return of income declaring total income at Rs.24,960/- on
22.12.2017. The assessee is a cooperative society and is engaged
in the banking business with its members. The aforesaid order is
hereinafter referred to as “impugned assessment order”.
2.2 That the assessee being aggrieved by the aforesaid
“impugned assessment order” prefers first appeal u/s 246A of
the Act before Ld. CIT(A) who by the “impugned order” has
dismissed the appeal of the assessee on grounds stated therein.
The core ground and reason for the dismissal of first appeal
under the Act were as follows:-
“4.10 In this proceeding, the appellant was provided with sufficient opportunities to substantiate the contentions raised in its ground of appeal. However, despite lapse of considerable amount of time and even after number of notices issued, the appellant has failed to furnish any reply/explanation/ documents. The onus is on the appellant to establish the nature and source of such cash deposited in its bank account which
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was required to be discharged by furnishing the details and documentary evidences. However, the said onus is not discharged by the appellant neither during the course of assessment proceedings nor in appellate proceedings. Considering the facts and circumstances of the case and given the fact that no reply/explanation has been furnished by the appellant, the undersigned is of the opinion that the order of the Ld. AO does not require any interference. Therefore, the grounds of appeal are dismissed”
2.3 That the assessee being aggrieved by the “impugned order”
has preferred the instant second appeal before this Tribunal and
has raised following grounds of appeal in Form No.36 against
the “impugned order” which are as under:-
“ The Assessee accepts deposits and gives loan only to its members. In the previous correspondences provided by the ssessee it is accepted that total cash deposits were made amounting to Rs. 27,32,620/- during demonetization period. Out of the given sum Rs. 5,31,500/- were deposited in bank account on 11.11.2016 in old discontinued currency. The Assessee had provided detailed bank statements and details of loans and statements were recorded on 24.05.2017.
The Representative being the accountant of the Assessee (AOP) at that time stated to provided details of those members of society who deposited cash in old currency during the Demonetization Period but due to shocking and sudden demise of the accountant no information could be sought by the society during that period which being the reason that the society was unable to provide the requisite details.
The Assessee Society only acted as an intermediary for depositing the old currency notes of the members in the bank and the same were not unexplained source of money earned by the society and even the same were not deposited by a single individual in the Bank Account of the society. It was a collection of funds from a number of members who were unable to deposit the funds during
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demonetization period and the society provided just a facility to park deposit of members in the bank account. All the necessary documentary evidences had been provided along with this appeal for your perusal.
Considering the same it can be observed that the income earned by the Assessee (AOP) is from genuine sources and no funds are obtained from illegal sources. Thus Sections 115BBE and 69A regarding undisclosed income shall not be imposed on the Assessee.”
Record of Hearing
3.1 The hearing in the matter took place before this Tribunal on
23.07.2025 when the Ld. AR for and on behalf of the assessee
appeared before us and interalia contended that the “impugned
order” is an ex-parte one and that the same should be set aside.
It was contended that there was a death of a responsible person
who was working for the assessee society. In brief he
contended that the “impugned order” should be set aside being
violative of the principles of natural justice and that there is no
effective disposal of the 1st appeal on merits. Per contra the Ld.
DR fairly submitted that both the orders of the lower authorities
below are not on merits and are ex-parte in nature. At the fag end
of the hearing there was near unanimity between the Ld. AR for
the assessee and Ld. DR for the revenue that the “impugned
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order” should be set aside and matter be remitted back to Ld.
A.O.
Observations,findings & conclusions.
4.1 We now have to decide the legality, validity and the
proprietary of the “Impugned Order” basis records of the case
and rival contentions canvassed before us.
4.2 We have carefully perused the records of the case.
4.3 We basis records of the case and after hearing and upon
examining the contentions are of the considered opinion that the
“impugned order” has simply dismissed the 1st appeal due to
the fact that assessee has remained non compliant despite
several opportunities to the assessee. However we observe that
though many opportunities were given to the assessee to submit
reply/submission etc. however in one of the reply only in the
response to notice dated 14.12.2023, the assessee vide their
reply dated 11.02.2024 had conveyed to the Ld. CIT(A) about
death of the Accountant of assessee society. Be that as it may
we are of the considered view that both the orders of the lower
authorities i.e. Ld. A.O & Ld. CIT(A) are not on merits and we
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observe and notice that neither at the original stage of the
assessment nor even at the 1st appeal stage there is any
meaningful discussion and debate on aspect of real computation
of income of the assessee society. This tribunal desires both at
the original stage of the assessment as well as at the 1st appeal
stage the meritorious disposal so that the real income exigible to
tax is computed and assessed. The responsibility is equally of
the assessee to participate in the proceedings and to cooperate
with the department. While it is true that Accountant of the
assessee society who was a responsible officer had died but
nevertheless in future some other competent officer who is well
acquainted with the affairs of the assessee society should be
deployed so that on merits revenue can take appropriate
decision according to law.
4.4 In the premises drawn up by us as aforesaid, we set aside
the “impugned order” as and by way of remand back to the file
of Ld. A.O on denovo basis.
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Order
5.1 In view of aforesaid “impugned order” is set aside as and
by way of remand to Ld. A.O on denovo basis.
5.2 In the result, the appeal of the assessee is allowed for
statistical purpose.
Order pronounced in open court on 28.07.2025.
Sd/- Sd/-
(B.M. BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER
Indore िदनांक / Dated : 28/07/2025 Dev/Sr. PS
Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File
By order COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore
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