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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
आदेश / O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by appeal-order dated 15.03.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [CIT(A)”] which in turn arises out of assessment-order dated 11.12.2019 passed by learned ITO, Neemuch [“AO”] u/s 144 of Income-tax Act, 1961 [“the Act”] for Assessment- Year [“AY”] 2017-18, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).
The background facts leading to present appeal are such that the assessee is a registered society. The AO, on the basis of information
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Shri Swarnakar Samaj Samiti, Neemuch ITA No. 334/Ind/2024 – AY 2017-18 available in AIMS Module of ITBA, found that the assessee had made cash
deposits of Rs. 20,32,700/- in an a/c with Allahabad Bank during
demonetization period. The AO also found that the assessee had not filed
return u/s 139. Accordingly, the AO issued notice u/s 142(1) calling
assessee to file return, still the assessee did not file any return in response
to AO’s notice. The AO issued notices u/s 142(1)/144 which also remained
uncompiled with by assessee. The AO then issued a summon dated
09.09.2019 u/s 131 to Shri Bhagat Verma, Secretary of assessee-society
who attended summon-proceedings. The AO recorded statements of Shri
Bhagat Verma on 13.09.2019, who explained that the assessee-society had
incomes from membership fee, rent from dharmashala, interest from bank
accounts and rent from shops. He further stated that the impugned deposits
in bank a/c during demonetization period were made from shop rent,
security-deposits (amanat), fee (namantan shulk) and advances against
booking of dharmsala. However, as per AO, he did not submit supporting
documentary evidences. The AO, therefore, issued show-cause notice dated
21.09.2019 calling the assessee to submit documentary evidences of
sources explained by its Secretary and also making a proposal to finalise ex-
parte assessment u/s 144 after making addition in case of failure to comply
with such notice. Finding no response to show-cause notice, the AO
ultimately made addition of Rs. 39,43,619/- in respect of cash deposits as
well as non-cash deposits credited in assessee’s two bank a/cs during the
financial year 2016-17 relevant to AY 2017-18 under consideration.
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Shri Swarnakar Samaj Samiti, Neemuch ITA No. 334/Ind/2024 – AY 2017-18 Aggrieved, the assessee carried matter in first-appeal. During first-appeal,
the assessee filed supporting evidences as required by AO by way of
additional evidences but the CIT(A) rejected assessee’s evidences on the
footing that sufficient cause is not shown in terms of Rule 46A. Ultimately,
the CIT(A) approved AO’s order and upheld addition.
Before us, Ld. AR for assessee submitted that the AO has made
addition only on the basis of statements of Secretary of assessee-society.
She submitted that the assessee filed apt evidences to CIT(A) but the CIT(A)
has wrongly rejected. Ld. AR submitted that the assessee made meticulous
submission to CIT(A) which are re-produced by CIT(A) on Page 8 to 20 of his
order. In the submissions so filed, it was clearly explained by assessee that
it is a society located in a small city and its office bearers are honorary and
generally do not look the income-tax portal. However, when the summon
u/s 131 was issued in physical mode, the assessee’s Secretary instantly
attended the proceedings and in statements recorded by AO, the Secretary
clearly explained the sources of deposits in bank a/cs which were correct
and credible sources. The subsequent non-submission of supporting
evidences occurred only because of non-checking of income-tax portal
otherwise the assessee would have no reservation or hesitation in
submitting supporting evidences for the satisfaction of AO. Ld. AR
submitted that the evidences filed by assessee to CIT(A) are also placed in
Paper-Book.
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Shri Swarnakar Samaj Samiti, Neemuch ITA No. 334/Ind/2024 – AY 2017-18 4. Per contra, Ld. DR contended that the assessee could not show
“sufficient cause” to CIT(A) in terms of Rule 46A for admission of additional
evidences. Ld. DR also submitted that the statements of Secretary were
recorded on 13.09.2019 and in reply to Q.No. 7, the Secretary agreed to
produce supporting evidence on 16.09.2019 but, however, the evidences
were not filed. Thereafter, the AO issued show-cause notice dated
21.09.2019 which again remained uncomplied with. Ld. DR went on
submitting that the case involves deposits in bank a/c, part of which related
to demonetization period, and the evidences filed by assessee are additional
evidences which need to be verified by AO. Therefore, according to him, the
case can at best be sent back to AO for consideration and assessment afresh
after examination of evidences.
We have heard learned Representatives of both sides and perused the
case-record including the orders of lower-authorities and considered
submissions of parties. Admittedly, the controversy in present case relates
to the addition made by AO of Rs. 39,43,619/- on account of unexplained
deposits in assessee’s bank a/c. It is, however, discernible from assessment-
order that the AO proceeded against assessee on the basis of cash-deposits
of Rs. 20,32,700/- in Allahabad Bank A/c during ‘demonetization period’
but ultimately made addition of Rs. 39,43,619/- in respect of credits in
assessee’s two bank a/cs (Allahabad Bank and Jila Sahakari Bank) on
account of cash-deposits and non-cash deposits during the entire financial
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Shri Swarnakar Samaj Samiti, Neemuch ITA No. 334/Ind/2024 – AY 2017-18 year 2016-17. It is also manifest from records that the assessee’s Secretary
responded to AO’s summon u/s 131 and in reply to Q.No. 7 of the
statements, clearly explained the sources of deposits having been made in
bank a/c during ‘demonetization period’. What remained pending was only
submission of supporting evidences to AO which were not filed. But then it
is also discernible that the AO has made addition for all deposits, cash as
well as non-cash, for the entire financial year. The assessee has also
explained that the summon u/s 131 was physically served and therefore the
assessee’s Secretary immediately attended but the notices/show-cause
notice were sent by AO through email which remained unattended because
of non-logging of income-tax portal by assessee’s office-bearers who work on
honorary basis. Considering all these aspects, we feel it appropriate to give
one more opportunity to assessee to file evidences before AO. That would
also enable the AO to take a better decision in the matter of assessee in
accordance with law. Therefore and also keeping in view the principle of
natural justice and fair play, we are inclined to remand this matter to the
file of AO for a fresh adjudication after giving necessary hearings to
assessee. The assessee is also directed to participate in the hearing to be
fixed by AO without seeking adjournments unless required due to any
exception, failing which the AO shall be at liberty to pass a fit order in
accordance with law.
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Shri Swarnakar Samaj Samiti, Neemuch ITA No. 334/Ind/2024 – AY 2017-18
Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court on 09.09.2024
Sd/- sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक /Dated : 09.09.2024 CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore
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