THE MUTHALAMADA EAST KSHEERA VYAVASAYA COOP SOCIETY LTD NOP4D,MUTHALAMADA vs. INCOME TAX OFFICE,WARD-2, AAYKAR BHAVAN

The present appeal preferred by the Assessee is directed against the order, dated 13/06/2025, passed by National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 20/02/2024, passed under Section 147 read with Section 144B of the Act for the Assessment Year 2014- 2015. The present appeal is within limitation.

The Assessee has raised following grounds of appeal :

The relevant facts in brief are that Assessee is a federal co-operative society engaged in the business of supplying milk and related business activities located at Muthalamada, Palakkad, Kerala. The Assessee filed return of income for Assessment Year 2016-2017 on 16/03/2023. The case of the Assessee was selected for scrutiny and assessment was completed vide Assessment Order, dated 20/02/2024. The Assessing Officer made addition of INR.50,03,215/- in the hands of the Assessee under Section 69A r.w.s. 115BBE of the Act.

Being aggrieved, the Assessee preferred appeal before the CIT(A). During the appellate proceeding, the Ld. CIT(A) noted that Assessment Order was passed on 20/02/2024. However, the appeal before the Ld. CIT(A) was instituted on 27/05/2025. In the Memorandum of Appeal filed before the Ld. CIT(A) in Form No. 35, the Assessee had stated that there was no delay in filing the appeal. However, the Learned CIT(A) was of the view that appeal was filed after the expiry of specified period of 30 days from the date of passing of the assessment order. Since the Assessee had not moved any application seeking condonation of delay in filing the appeal, the CIT(A) dismissed the appeal has being barred by limitation. The Ld. CIT(A) also observed that the Assessee has not been able to substantiate the claim/submission seeking deletion of addition of 2 Assessment Year 2016-2017 INR.50,03,215/- on merit and therefore, dismissed the ground raised by the Assessee on merits as well.

Being aggrieved the Assessee has preferred the present appeal before the Tribunal.

The Ld. Authorised Representative for the Assessee submitted that the Assessee did not receive the copy of Assessment Order and therefore, the appeal was filed soon after getting the knowledge of the Assessment Order has been passed. Relying on Ground No. 2 raised in appeal the before the Tribunal, the Ld. Authorized Representative before the Assessee submitted that, in any case, the Assessee should have been granted an opportunity to explain the delay in filing the appeal. It was submitted that Assessee had sufficient material to establish that the source of cash deposited in the bank account of the Assessee was cash generated from its operation and the withdrawals made from another bank account held by the Assessee that State Bank of India, Muthalamada Branch.

Per contra, the Ld. Departmental Representative placed reliance on the order passed by the Ld. CIT(A) and submitted that the Assessee had not filed any application seeking condonation of delay and also failed to substantiate the claim/submission on merits during the assessment as well as appellate proceedings. Therefore, the order passed by the Ld. CIT(A) should be sustain.

Having given thoughtful consideration to the rival submission, we find merit in the contention advance on behalf of the Assessee that before dismissing the appeal preferred by the Assessee as being barred by limitation, the Assessee should have been granted an opportunity to explain the delay in filing appeal as computed by the Ld. CIT(A) and more so in view of the fact that in appeal memorandum in Form No. 35 filed before the Ld. CIT(A) the Assessee had stated that there was no delay in filing appeal before

Since the delay is not condoned, the appeal is not required to be adjudicated on merits. However, on examining the case on the basis of Grounds of Appeal, statement of facts and submissions made by the appellant during the course of Appellate…………..”

On perusal of above we find that Ld. CIT(A) had recorded that since the delay in filing the appeal was had not condoned, the appeal was not required to be adjudicated on merits. However, thereafter, the Ld. CIT(A) proceeded to adjudicate the appeal merits as well. In this reagrd, we find that before the Assessing Officer the Assessee had contended that the source of cash deposit INR 50,03219/- made in bank account of the Assessee was the cash income earned from the sale of milk to the milkmen/customers which formed the regular business operation of the Assessee. Further we note that by way of Ground No. 2 raised in the present appeal, the Assessee has submitted that the Assessee had withdrawn INR.34,00,000/- and INR.40,00,000/- on 22/12/2015 & 30/03/2016, respectively from it's own bank account numbered 00280000004 maintained with State Bank Of India, Muthalamada Branch and had deposited cash of INR.10,00,000/- and INR.40,00,000/- on 22/12/2015 and 30/03/2016, respectively, in it's other bank account numbered 0740101005746 maintained with Canara Bank, Muthalamada Branch. Therefore, in our view, even on merits, the Assessee has provided reasonable explanation which requires considered. Accordingly, we set-aside the Order dated, 13/06/2025, passed by the Ld. CIT(A) with the direction to adjudicate (a) the issue of the appeal being barred by limitation and (b) the ground raised by the Assessee on merits afresh after granting the Assessee a reasonable opportunity of being heard. In terms of aforesaid Ground No. 1 to 3 raised by the Assessee are allowed for statistical purpose.

In result, the present appeal preferred by the Assessee is treated as allowed for statistical purposes.

"धान आयकर आयु"त / Pr.CIT

"वभागीय ""त"न"ध ,आयकर अपील"य अ"धकरण ,मुंबई / DR,

ITAT, Mumbai गाड" फाईल 6. / Guard file.