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Facts
The assessee, a credit cooperative society, made cash deposits in FY 2016-17. The AO made an addition of Rs. 12,00,000/- u/s 68 for unexplained cash deposits and denied a deduction of Rs. 4,06,475/- u/s 80P for AY 2015-16, citing non-filing of return u/s 139(1) and non-compliance with Section 80AC. The CIT(A) upheld the AO's order, leading the assessee to appeal before the Tribunal.
Held
The Tribunal remanded the issue of addition u/s 68 back to the AO, directing re-verification and an opportunity for the assessee to present evidence, noting the CIT(A) had overlooked submissions. For the denial of u/s 80P deduction, the Tribunal, relying on judicial precedents, ruled that Section 80AC and Section 80A(5) were not applicable for AY 2017-18 and earlier, allowing the deduction even if the return was filed late. It set aside the CIT(A)'s order on this point and directed the AO to allow the 80P claim.
Key Issues
1. Whether the addition u/s 68 for unexplained cash deposits was sustainable given the assessee's submissions and lack of proper opportunity. 2. Whether the denial of deduction u/s 80P was valid under provisions of section 80AC and section 80A(5) for the impugned assessment year.
Sections Cited
u/sec 250, u/sec 68, section 80P, section 80AC, u/sec 142(1), u/sec 139(1), u/sec 144, section 80A(5)
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Income Tax Appellate Tribunal, “SMC” BENCH PANAJI
Before: SHRI PAVAN KUMAR GADALEShri Basaveswar Co_Op Credit
ORDER
PER PAVAN KUMAR GADALE, JM:
The appeal is filed by the assesse against the order of the ADDL/JCIT(A)-3 Chennai passed u/sec 250 of the Act. The assesse has raised the grounds of appeal
challenging the order of the NFAC/ CIT(A) sustaining addition u/sec68 of the Act and the denial of claim of deduction under section 80P of the Act applying the provisions of section 80AC of the Act.
2. The brief facts of the case are that, the assessee is a credit cooperative society engaged in providing the credit facilities to member s. The Assessing Officer (AO) based on the information and data analytics/ cash transactions data Shri Basaveswar Co Op Credit Society Niyamit. found that the assesse has made cash deposits in the Axis bank account in the F.Y 2016-17 and the assesse has not filed the return of income. Subsequently the case was selected for scrutiny and the A.O has issued notice u/sec 142(1) of the Act on various dates and there was a partial compliance. Whereas the A.O find that the assesse has made the cash deposits in the F.Y.2016-17 and explanations were called to substantiate the cash deposits and the assesse has furnished the clarifications and details in lieu of show cause on 26.08.2019 and the A.O was not satisfied with the explanations and observed that the assessee has failed to establish the source of cash deposits during the demonization period and made addition of Rs.12,00,000/- as unexplained cash deposits u/sec68 of the Act. Further the A.O found that for the A.Y.2015-16 the assessee has not filed the return of income u/sec 139(1) of the Act and the conditions stipulated under section 80AC of the Act are not complied by the assessee and the A.O has denied the claim of deduction u/sec80P of the Act of Rs.4,06,475/- and assessed the total income of Rs.16,06,475/- and passed the order u/sec144 of the Act dated 31.10.2019.
3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and has issued notices of hearing and the assessee has filed the details and submissions. But the CIT(A) has Shri Basaveswar Co Op Credit Society Niyamit. confirmed the action of the A.O and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon'ble Tribunal.
4. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer overlooking the information of the assessment proceedings.The assesse was asked to explain the sources of deposits and the assesee has filed the financial statements and supporting information in respect of deposits along with bank statement and members list but the addition of cash deposits u/sec68 of the Act was sustained by the CIT(A). Further the provisions of section 80AC of the Act are applicable to the cooperative societies from A.Y.2018-19 to claim deduction u/sec80P of the Act provided the return of income is filed within the due date u/sec139(1) of the Act and whereas the impugned assessment year is A.Y.2017-18. The Ld.AR supported the submissions with the factual paper book and judicial decisions. Per Contra, the Ld.DR supported the order of the CIT(A) and submissions.
Heard the rival submissions and perused the material on record. The crux of the disputed issues envisaged by the Ld.AR that the CIT(A) has erred in sustaining the addition of unexplained cash deposits made by the Assessing Officer without providing proper opportunity and overlooking the facts and material evidences. The assesse has filed the details before the lower authorities Shri Basaveswar Co Op Credit Society Niyamit. and the CIT(A) has not considered the documents and information supporting the claim of the assesse. The Ld.AR highlighted on the submissions made in the proceedings with Aadhar card and PAN card of members of society establishing the identity and source of cash deposits placed at page 22 to 116 of the paper book and the assesee has a good case on merits. Prima-facie, the CIT(A) has dealt on the findings of the AO and has not considered the submissions/evidences of the assesse filed in the proceedings referred and has not allowed the grounds of appeal
. Therefore, considering the facts, circumstances and principles of natural justice shall provide with one more opportunity of hearing and accordingly restore the disputed issue along with the evidences for limited purpose to the file of the Assessing Officer for verification and examination and to adjudicate on merits and the assessing officer shall provide adequate opportunity of being heard to the assessee and the assessee should also cooperate in submitting the information. And these grounds of appeal of the assessee are allowed for statistical purpose.
6. On the second disputed issue, the provisions of section 80A(5) of the Act are not applicable as the deduction under section 80P of the Act was not included in the proviso till A.Y.2017-18 and therefore deduction u/sec80P of the Act can be claimed even after the due date u/sec139(1) of the Act. The Ld.AR relied on the decision of the Honble Shri Basaveswar Co Op Credit Society Niyamit. Tribunal Bangalore Bench –Prathamika krishi patina sahakara sangha ltd(2022)142 taxmann.com405. Similarly Honble Tribunal Panaji bench- ITA..No.84/PAN/2022 -The Omkar urban cooperative credit society Ltd Vs ITO Belagavi.A.Y.2017-18 were the Honble Tribunal in Para 5.4 of the order had dealt on the similar issue were the assessee has filed the return of income disclosing total income Rs.Nil after claiming the deduction u/sec80P of the Act in pursuance to notice issued u/sec142(1) of the Act in the assessment proceedings and the Honble Tribunal concluded that the provisions of section 80AC of the Act shall not be applicable and the assessee is entitled deduction u/sec80P of the Act. Hence considering, the facts, circumstances and follow the judicial precedence and set aside the order of the CIT (A) on this disputed issue and direct the Assessing officer to allow the claim of deduction u/sec80P of the Act. And these grounds of appeal of the assesse are allowed in favour of the assesse.
7. In the result, the appeal filed by the assesse is partly allowed for statistical purposes. Order pronounced on 10/11/2025 as per rule 34(5) of the ITAT Rules 1963. SD/- (PAVAN KUMAR GADALE) JUDICIAL MEMBER Panaji Dated: 10/11/2025 Copy of the Order forwarded to: 1. The Appellant, 2. The Respondent 3. The CIT(A)- 4. CIT 5. DR, ITAT, 6. Guard file. //True Copy// BY ORDER, (Asstt. Registrar)ITAT, Panaji Initial Date 1. Draft dictated on PS 2. Draft placed before author PS
Draft proposed & placed before PS the second member 4. Draft discussed/approved by PS Second Member. 5. Approved Draft comes to the PS Sr.PS/PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Dictation Pad is enclosed