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Facts
The assessee, a Co-operative Credit Society, did not file an ITR for AY 2018-19. The AO initiated reassessment under section 147 based on information regarding cash and time deposits, assessing income at Rs. 1.90 Crores. On appeal, the CIT(A) deleted major additions related to cash deposits of Rs. 1.52 Crores and time deposits of Rs. 30 Lakhs, based on additional evidence (cashbook, FD details) submitted by the assessee during appellate proceedings.
Held
The ITAT observed that the CIT(A) admitted additional evidence without following the mandatory procedure under Rule 46A of the Income Tax Rules, which requires recording satisfaction and providing an opportunity to the Assessing Officer. Therefore, the ITAT set aside the CIT(A)'s order and remanded the case back to the CIT(A) for de novo adjudication, allowing both the assessee and the AO to present necessary documents and arguments.
Key Issues
Whether the CIT(A) erred in admitting additional evidence without adhering to the procedure outlined in Rule 46A of the Income Tax Rules, thus necessitating a remand for de novo adjudication.
Sections Cited
Section 250, Section 147, Section 144B, Section 139(1), Section 80P(2)(a)(i), Section 69, Rule 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
In this case, Revenue has filed an appeal against the order of ld.Commissioner of Income Tax(Appeal)[NFAC] passed under C.O.No.18/PUN/2025 [A] section 250 of the Act, for A.Y.2018-19 dated 23.01.2025 emanating from the Assessment Order under section 147 r.w.s. 144B dated 17.03.2023. The Assessee has also filed the Cross Objection Appeal in C.O.No.18/PUN/2025. The Revenue has raised the following grounds of appeal : “1 The Ld. CIT(A) has erred in deleting the addition made by AO on account of cash deposit in bank account of Rs. 1,52,00,000/-.
2 The Ld. CIT(A) has erred in deleting the addition made by AO on account of time deposit of Rs. 30,00,000/- with Saraswat Cooperative Bank for want of documentary evidences.
The Ld. CIT(A) has erred in deleting the addition made by AO regarding the interest received of Rs. 8,18,128/- from the investments made with Deogiri Nagari Sahakari Bank Limited, Aurangabad.
4 The Ld. CIT(A) has erred in deleting the additions on the basis of the assessee's submission which was not produced before AO during the assessment proceedings and for which no remand report was called for from the AO during the appellate proceedings.
5 The appellant craves leave for addition, alteration, modification, rectification, deletion and withdrawal of the grounds of appeal as and when required.”
Findings & Analysis :
We have heard both the parties and perused the records. In this case, Assessee is a Co-operative Credit Society. Assessee has not filed Return of Income u/s.139(1) for A.Y.2018-19. Assessing Officer issued notice u/s.148 of the Act, as Assessing Officer has received information regarding cash deposits by assessee and time deposits. Assessee filed Return of Income on 02.03.2023 declaring total income at Rs.NIL and claiming deduction u/s.80P(2)(a)(i) of Rs.29,80,886/-. During the assessment proceedings, Assessee failed to reply to the notices issued by Assessing Officer. Therefore, Assessing Officer assessed the income at Rs.1,90,18,128/-. Aggrieved by the assessment order, assessee filed appeal before the ld.CIT(A).
3. The relevant paragraphs of the ld.CIT(A) order are reproduced here as under : “5.5 The 1st addition made is with respect to cash deposit of Rs.1,52,00,000/-. The assessing officer has noted in the assessment order that the appellant has not substantiated cash deposit with necessary documentary evidence and hence has made the additions. During the course of the appellate proceedings the appellant has submitted complete cashbook which gives complete details of source of the cash. Appellant being a Cooperative Credit Society it is but natural that cash will be deposited by various persons. Now since the cashbook 3
5.6 The 2nd addition made is regarding time deposit of Rs. 13 Lakh. The appellant has submitted that there was an old FD of Rs. 13 Lakhs with the Yavatmal Urban Cooperative Bank which got matured on 19.06.2017 and got withdrawn on 23.06.2017. The necessary documentary evidence has been produced this respect. New FD of Rs. 15 Lakhs each was made in Saraswat Cooperative Bank on 23.06.2017 (amount was transferred from Yavatmal Urban Cooperative Bank to Saraswat Cooperative Bank and FD was made). FD certificates and related ledgers in the appellant's book were produced. In view of the above the addition made of Rs. 30 Lakh on the issue of time deposit U/s 69 is deleted.”
3.1 The ld.CIT(A) partly allowed the assessee’s appeal. Aggrieved by the order of the ld.CIT(A), Revenue filed appeal and Assessee field Cross Objection.
Ld.Departmental Representative(ld.DR) for the Revenue submitted that in this case, ld.CIT(A) had admitted additional evidence in the form of Cash Book and other documents filed by Assessee before the ld.CIT(A). Ld.DR for the Revenue submitted that no remand report was called as per Rule 46A of the Income Tax Rules.
Ld.AR for the Assessee has filed these documents before us also.
Ld.AR admitted that these documents were not filed before Assessing Officer during Assessment Proceedings. Therefore, ld.AR admitted that case may be set-aside to ld.CIT(A) for deonovo adjudication with liberty to the assessee to raise legal grounds.
Ld.Departmental Representative(ld.DR) for the Revenue also accepted that the order of ld.CIT(A) may be set-aside to ld.CIT(A) for denovo adjudication.
In this case, admittedly, ld.CIT(A) has admitted additional evidences without following the procedure laid down in Rule 46A of Income Tax Rules. It is mandatory for ld.CIT(A) to record his satisfaction and provide opportunity to the Assessing Officer. In these facts and circumstances of the case, in the interest of the justice, we set-aside the order of the ld.CIT(A) to ld.CIT(A) for denovo adjudication. Ld.CIT(A) shall provide opportunity to the Assessee and Assessing Officer. Assessee shall be at liberty to file necessary documents and raise legal grounds before ld.CIT(A). 5
Accordingly, Revenue’s Appeal and Assessee’s Cross Objection appeal are allowed for statistical purpose. Order pronounced in the open Court on 27 January, 2026.