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Facts
The assessee, a cooperative society, failed to file its income tax return for AY 2015-16. An assessment order was passed adding Rs. 2,26,38,386/- on account of cash deposits. The assessee did not comply with notices issued during the assessment and appellate proceedings. The CIT(A) dismissed the appeal.
Held
The Tribunal noted that both the assessment order and the CIT(A) order were ex-parte and not adjudicated on merits. The Tribunal set aside the "impugned order" and remanded the case back to the AO for a fresh adjudication on merits, subject to payment of cost by the assessee.
Key Issues
Whether the cash deposits in bank accounts are unexplained money or represent repayment of loans by farmers, and if the orders passed ex-parte without proper adjudication on merits are sustainable.
Sections Cited
Section 253, Section 147, Section 144, Section 144B, Section 133(6), Section 69A, Section 246A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M JOSHI
The Assessee is aggrieved by the order bearing Number:-
ITBA/NFAC/S/250/2025-26/1076311901(1) passed by the Ld. CIT(A) u/s 250 of the Act, which is herein after referred to as the “Impugned order”. The Relevant Assessment year
Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 is 2015-16 and the corresponding previous year period is from 01.04.2015 to 31.03.2016.
2. Factual Matrix 2.1 That as and by way of an Assessment order made u/s 147rws144/144B of the Act, the total income of the Assessee was computed & assessed at Rs. 2,26,38,386/-.
The original return of income was not filed. Income as per the ROI filed u/s 148 was NIL. The addition of Rs. 2,26,38,386/- was made on account of cash deposit with Jila Sahakari Kendriya Bank Maryadit as per Para 3.4 of the aforesaid assessment order. The aforesaid assessment order bears no:- ITBA/AST/S/147/2023-24/1058322765(1) and that the same is dated 29/11/2023, which is herein after referred to as the “impugned assessment order”.
2.2 The assessee is a cooperative society and had not filed its return of income for AY 2015-16. Subsequently the information was received by the income tax dept. that during the year under consideration the assessee had entered into the following transactions:-
Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17
S.No. Details of transactions Amount involved (in Rs.) 1 Cash deposited in bank account 2,03,41,206/- maintained with Jila Sahakari Kendriya Bank Maryadit Total 2,03,41,206/- 2.3 In the “impugned assessment order” it is also recorded that the notice u/s 148 of the Act was issued on 08/04/2022. In- compliance to the said notice the assessee filed its return of income for AY, 2015-16 on 30/04/2022 declaring total income at NIL.
2.4 It is recorded in the “impugned assessment order” that several opportunities were given to the assessee as and by way of the notices u/s 143(2) and 142(1) of the act. The letters and show cause notices were issued to the assessee. The assessee however has not complied with any of the notices. The relevant details are as under:-
Page 3 of 17 Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 Page 4 of 17
Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 2.5 In the “impugned assessment order” it is recorded as under:-
Page 5 of 17 Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 Page 6 of 17 Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 Page 7 of 17 Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 Page 8 of 17 Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 Page 9 of 17 Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 Page 10 of 17
Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 2.6 The Assessee was issued a show cause under section 144 rws 144B (1)(xii)(6) on 10/11/2023 asking them to show cause as to why the amount of Rs. 2,26,38,386/- should not be added to its income. The assessee, however has neither submitted any reply nor submitted the source of cash deposit of Rs.
2,26,38,386/-. The assessee has failed to explain the nature and source of cash deposits in its bank accounts. Ultimately by the Page 11 of 17
Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 “impugned assessment order” the Ld. AO has treated the amount of cash deposit of Rs. 2,26,38,386/- as an unexplained money u/s 69A of the Act.
2.7 That the assessee being aggrieved by the aforesaid “impugned assessment order” prefers the first appeal u/s 246A of the Act before the Ld. CIT (A) who by the “impugned order” has dismissed the first appeal of the assessee on the grounds and reasons stated therein. The core grounds and reasons for the dismissal of the first appeal were as under:-
“5. The appellant’s appeal was fixed for hearing on the following dates: S.No. Hearing notice dated Hearing date Remarks 1. 25.11.2024 02.12.2024 No compliance
10.12.2024 16.12.2024 No compliance
3. 25.02.2025 6.3.2025 No compliance
5.1 There were no compliance to notices which were sent on the email id i.e. pacssironj@gmail.com mentioned in Form No.35 filed by the appellant. Notices were also uploaded on the web portal of the department during the appellate proceedings, login rights whereof were available to the appellant. Despite given repeated opportunities of being heard, there has been no compliance to the notices. It is apparent that the appellant is not interested in pursuing his appeal. In the absence of any submission from the appellant, the grounds of appeal are decided on merits on the basis of facts available on record. In result appeal of the assessee is dismissed.
Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 2.8 The assessee being aggrieved by the “impugned order” has preferred the instant second appeal before this tribunal and has raised the following grounds of appeal in the form no. 36 against the “impugned order” which are as under:-
“1. That the order of the NFAC is perverse, erroneous and is not tenable on facts and in law and also in breach of principle of natural justice.
2. That the Order of the NFAC erred in confirming the Re-Assessment Order dated 20/05/2025 as same is barred by limitation and without jurisdiction 2.1 That the Ld. NFAC and the Ld. Assessing Officer erred in confirming the re-assessment order dated 29.11.2023 for A.Y. 2015-16, as the same is barred by limitation in view of the recent judgment of the Hon'ble Supreme Court in Union of India v. Rajiv Bansal [2024] 167 taxmann.com 70 (SC). 2.2 That the CIT(A) NEAC erred in confirming the addition of Rs 2,26,38,386/-11/s 69A. 2.3 That the CIT(A) NFAC has erred in confirming the addition of Rs. 1142500/- being cash deposited in bank accounts without appreciating that the said cash was qua the repayment of loan by farmers. 2.4 That the CIT (A) NFAC has erred in confirming the addition u/s 69A without appreciating that provision of Section 69A is not applicable in case of cash deposit duly recorded in the audited books of account and offered as income. that in the present case the assessee himself has declared the amount of cash deposited in the return of income after duly entering the same in the books of account. Thus the provision of section 69A is not applicable and has wrongly been invoked. 2.5 That the CIT (A) NFAC failed to note that Sec. 69A of the Act is applied when the assesse is found to be owner of any money which is not recorded in the books of account. However, in the case of the assessee, it has maintained books of accounts duly audited in accordance with section 44AB of the Income Tax Act which was also furnished with the return of income filed by the assessee. The assesse has demonstrated from the books of account that source of cash deposited was out of re-payment made by the Farmers against their loans.
3. The appellant craves permission to raise additional grounds and to amend or alter the foregoing ground before the appeal is finally decided."
Record of Hearing
Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 3.1 The hearing in the matter took place before this Tribunal on 19.01.2026 when the Ld. AR for & on behalf of the Assessee appeared before us & interalia contended that the “Impugned Order” is bad in law, illegal & not Proper. It is in the violation of the principles of natural justice. It therefore deserves to be set aside. It was submitted that even the “impugned assessment order” is ex-parte and bad in law.
No legitimate reason was given by the Ld. AR as to why both the orders of lower authorities are ex-parte despite service of notice(s) etc. The Ld. AR had nothing to reply. Per contra Ld. DR appearing for the revenue submitted that since the assessee is a society and deals with the agriculture, agriculture produce, farmers, at ground level the revenue has no objection if the impugned order is set aside and the matters is remanded back to the file of the Ld. AO on denovo basis with a cost of Rs. 5000/- in each appeal.
Observations Findings & conclusions 4.
4.1 We have to decide the legality, validity and proprietary of the “impugned order” basis records of the case & the rival submission canvassed before us.
Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 4.2 We have carefully perused the records of the case and have heard the submissions.
4.3 We basis records of the case & after hearing & upon examining the rival contentions of the Ld. AR & the Ld. DR canvassed before us, are of the considered opinion that both the “impugned assessment order” as well as the “impugned order” are ex-parte. The core issue has not been adjudicated and adjudged basis merits so this tribunal desires that total income of the assessee should be computed and assessed on the real time basis exigible to tax in accordance with law by following the due process of law under the Act. This tribunal also expects the assessee to be compliant as and when notices etc. are issued. In brief this tribunal desires the meritorious disposal of both the “impugned assessment order” as well as “impugned order”. The assessee cooperation in this regard assumes importance. The assessee cannot go in slumber mode. In the result we are of the considered opinion that the “impugned order” should be set aside and matter should be Page 15 of 17
Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 remanded back to the file of Ld. AO for passing a fresh order on merits of the case.
4.4 In the premises drawn up by us, we set aside the “impugned order” and remand the case back to the file of Ld. AO on denovo basis subject to the payment of cost of Rs.5000/- in each appeal as & by way of deterent measures & to ensures compliances on the part of the assessee. The cost of Rs.5000/- shall be paid as & by way of a challan under category “others” to income tax department & the Ld. AO shall take up the denovo adjudication only after necessary proof is shown to him. The assessee is directed not to take any credit of said cost against any taxes, penalty etc.
5 Order 5.1 In the result the “Impugned order” is set aside as and by way of remand back to the file of the Ld. AO with directions as aforesaid.
5.2. Appeal of the assessee is allowed for statistical purpose. (AY 2016-17)
Prathmik Krashi Sakh Sahakari Samiti & 633/Ind/2025 - A.Y.2015-16 & 2016-17 5.3 The facts and circumstances of the ITA No.- 633/Ind/2025 (AY 2016-17) are more or less similar and identical to ITA No.632/Ind/2025. This matter was heard too with consent of both the parties on 19/01/2026. Hence order made in ITA No- 632/Ind/2025 would apply mutatis mutandis to appeal no.
633/Ind/2025.
5.4 In result “impugned orders” in both appeals are set aside as and by way of remand to Ld. AO with directions as aforesaid.
5.5 Both appeals allowed for statistical purpose.
Pronounced in open court on 30.01.2026.