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Facts
The assessee, a large co-operative society, faced reassessment proceedings for AYs 2015-16, 2016-17, and 2018-19 following large cash deposits in its bank account. The Assessing Officer added 8% of the total receipts as business income, and the CIT(A) dismissed the assessee's appeals ex-parte due to non-appearance. The assessee filed an affidavit explaining delays and difficulties due to an inquiry into the society's affairs and a personal health issue of the Secretary.
Held
The Tribunal condoned the delay in filing the appeals, acknowledging that the assessee was not given a proper opportunity of being heard by the CIT(A). The appeals were remitted back to the CIT(A) for fresh adjudication on merits, with a directive to grant the assessee a fair hearing. The assessee was cautioned to cooperate in the proceedings, failing which the CIT(A) could pass orders based on available records.
Key Issues
Whether the CIT(A) erred in passing ex-parte orders without providing proper opportunity of being heard; challenges to the validity and limitation of reassessment notices; procedural irregularities in the issuance and approval of notices; estimation of profits from petrol bunk operations; and the levy of interest under Section 234A.
Sections Cited
147, 148, 148A(b), 148A(d), 149(1)(b), 144, 144B, 80P, 234A, 151(ii)
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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आयकर अपीऱीयअधिकरण, विशाखापटणम पीठ, विशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री दुव्िूरु आर एऱ रेड्डी, उपाध्यक्ष एिं श्री एस बाऱाकृष्णन, ऱेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE VICE PRESIDENT & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अऩीऱ सं./ 419 & 420/Viz/2025 (ननधधारण वषा / Assessment Years: 2015-16, 2016-17 & 2018-19) The Large Size Co-op Society Ltd, Vs. Income Tax Officer, Kamavarapukota. Ward-1, PAN: AADAT0456D Eluru. (अऩीऱधथी/ Appellant) (प्रत्यथी/ Respondent) अऩीऱधथी की ओर से/ Appellant by : Sri I. Kama Sastry, CA प्रत्यधथी की ओर से / Respondent by : Dr. Aparna Villuri, Sr. Ar सुनवधई की तधरीख / Date of Hearing : 11/08/2025 घोषणध की तधरीख/Date of : 14/08/2025 Pronouncement O R D E R PER DUVVURU RL REDDY, Vice President:
The captioned appeals are filed by the assessee directed against the orders of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“Ld. CIT(A)- NFAC”] vide DIN & Order No. as under:
419 & 420/Viz/2025 The Large Site Coop Society Ltd Sl DIN & Order No. Order date AY Arising out of the No order
ITBA/NFAC/S/250/2024- 10/01/2025 2015-16 U/s. 147, dated 25/1072056697(1) 23/01/2024 2. ITBA/NFAC/S/250/2024- 17/01/2025 2016-17 U/s. 147 r.w.s 144, 25/1072268857(1) dated 12/01/2024 3. ITBA/NFAC/S/250/2024- 20/01/2025 2018-19 U/s. 147 r.w.s 144, 25/1072324002(1) dated 16/01/2024 Since these three appeals pertain to the same assessee and the issues involved in these appeals are identical, for the sake of convenience, they are clubbed, heard together and disposed of in this consolidated order. Appeal wise adjudication is given in following graphs.
At the outset, it is noticed from the record that there is a delay of 91 days in filing the present three appeals before the Tribunal and the assessee has filed an affidavit explaining the reasons, similar to the three appeals, which are extracted herein below:
419 & 420/Viz/2025 The Large Site Coop Society Ltd 3. On a perusal of the above, we are of the considered view that there is a sufficient and reasonable cause ie., due to allegation on the assessee-society and the consequent enquiry by the Cooperative Department officials, that prevented the assessee in filing the appeals for the AYs 2015-16, 2016-17 and 2018-19. Therefore, we hereby condone the delay in filing the appeal and proceed to adjudicate the appeals on merits.
Firstly, we shall take up the (AY: 2015-16).
Brief facts of the case are that the assessee is a cooperative society engaged in the business of supplying Fertilizers, seeds and PDS items to its members and also conducting the activity of granting loans and advances in the line of banking. As per the order passed U/s. 148A(d), dated 27/03/2022, the case of the assessee has been reopened on the basis of information that the assessee had deposited Rs. 17,01,22,910/- in its bank account maintained with Andhra Bank (now merged with Union Bank). The assessee did not file regular return of income and therefore, the sources of the said cash deposits remained unexplained. Accordingly, notice U/s. 148 of the Act was issued to the assessee on 05/04/2022. In response, the assessee filed the 419 & 420/Viz/2025 The Large Site Coop Society Ltd return of income but did not verify the same. Further, the Ld. AO also observed that the assessee did not respond to the various notices issued by the assessee. Thereafter, the Ld. AO considering the nature of the transactions in the bank account and material available on record, the receipts amounting to Rs 18,74,22,666/- are considered as business receipts. Accordingly, the Ld. AO issued a show cause notice dated 12/01/2024 and the assessee was asked to explain as to why 8% of the total receipts of Rs. 18,74,22,666/- which worked out to Rs. 1,49,93,813/- should not be treated as business income and added to the total income of the asseseee. However, there was not compliance from the assessee with respect to the show cause notice issued. Therefore, the Ld. AO added the amount of Rs. 1,49,93,813/- towards variation in respect of undisclosed business receipts and determined the total income of the assessee at Rs. 1,49,93,813/- and passed the order U/s. 147 r.w.s 144 r.w.s 144B of the Act, dated 23/01/2024. Aggrieved by the order of the Ld. AO, the assessee carried the matter in appeal before the Ld. CIT(A).
On appeal, the Ld.CIT(A) passed ex-parte order and dismissed the appeal of the assessee. Aggrieved by the order of 419 & 420/Viz/2025 The Large Site Coop Society Ltd 7. At the outset, the Ld. AR submitted before us that the Ld. CIT (A) has passed ex-parte order without providing proper opportunity to the assessee of being heard. It was therefore pleaded that the matter may be remitted back to the file of the Ld CIT (A) in order to provide one more opportunity to the assessee of being heard.
Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that several opportunities had been provided to the assessee however, on the given dates of hearing, neither the assessee has appeared before the Ld. CIT (A) nor responded to the hearing notices issued. It was further submitted that the Ld. CIT (A) had no other option but to pass ex-parte order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(A) does not call for any interference.
We have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, we find that the Ld. CIT (A) had posted the case on three occasions. However, none appeared on behalf of the assessee before the CIT(A) on the dates of hearing nor filed any details with regard to the grounds agitated before the Ld. CIT(A). Therefore, the Ld. CIT (A) was left with no other option except to adjudicate the appeal ex-parte. In this situation, considering 419 & 420/Viz/2025 The Large Site Coop Society Ltd the prayer of the Ld. AR for one more opportunity before the Ld. CIT(A), and in the interest of justice, we hereby remit the matter back to the file of Ld. CIT (A) in order to consider the appeal afresh and decide the case on merits by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. CIT (A) in the proceedings failing which the Ld. CIT (A) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly.
In the result, appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove.
ITA No. 419/Viz/2025 (AY: 2016-17)
In this appeal the assessee has raised the following grounds of appeal:
12. The core issue contested by the Ld. AR before us is that the Ld. CIT(A) did not provide proper opprtunity of being heard to the 419 & 420/Viz/2025 The Large Site Coop Society Ltd assessee and therefore, the case may be remitted back to the file fo the Ld. CIT(A).
13. After hearing both the sides, we are fo the considered view that since there is no change in the facts and circumstances of the case for the AY 2015-16 and 2016-17, considering the prayer of the Ld. AR for one more opportunity before the Ld. CIT(A), and in the interest of justice, we hereby remit the matter back to the file of Ld. CIT (A) in order to consider the appeal afresh and decide the case on merits by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. CIT (A) in the proceedings failing which the Ld. CIT (A) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly.
In the result, appeal filed by the assessee is allowed for statistical purposes as indicated herein above. (AY: 2018-19)
In this appeal the assessee has raised the following grounds of appeal:
419 & 420/Viz/2025 The Large Site Coop Society Ltd 16. The core issue contested by the Ld. AR before us is that the Ld. CIT(A) did not provide proper opprtunity of being heard to the assessee and therefore, the case may be remitted back to the file fo the Ld. CIT(A).
After hearing both the sides, we are fo the considered view that since there is no change in the facts and circumstances of the case for the AY 2015-16 and 2016-17, considering the prayer of the Ld. AR for one more opportunity before the Ld. CIT(A), and in the interest of justice, we hereby remit the matter back to the file of Ld. CIT (A) in order to consider the appeal afresh and decide the case on merits by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. CIT (A) in the proceedings failing which the Ld. CIT (A) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly.
In the result, appeal filed by the assessee is allowed for statistical purposes as indicated herein above.
Ex-consequenti, all the three appeals filed by the assessee are allowed for statistical purposes as indicated herein above.