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Income Tax Appellate Tribunal, Hyderabad ‘A ‘ Bench, Hyderabad
Before: Shri R.K. Panda, Vice- & Shri Laliet Kumar
आदेश/ORDER PER LALIET KUMAR, J.M This appeal filed by the assessee is directed against the order dated 11.10.2023 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2017-18.
ITA 611 of 2023 NDDP and TEC Society Ltd
Although a number of grounds have been raised by the assessee, however, these all relate to the order of the learned CIT (A) NFAC in confirming the addition of Rs.10,25,132/- made u/s 69A and Rs.1,33,80,460/- made by the Assessing Officer u/s 80P of the I.T. Act.
Facts of the case, in brief, are that assessee being a Trust was issued Notice u/s 142(1) of the Act on 23-03-2018 calling to prepare a true and correct return of income under the Income tax Act, 1961 (Act) during the previous year relevant to assessment year 2017-18. As per provisions of Section 142(1) of the Act, the assessee was required to furnish the said return of income as required to be furnished as per the conditions and manner prescribed in Rule 12 of the Income Tax Rules, 1962, on or before 31/03/2018. The assessee has failed to furnish return of income for A Y 2017-18 either u/s 139 (on or before 31/03/2018) and failed to furnish Income Tax Return (ITR) in response to notice issued u/s 142(1) of the Act.
On the basis of data analytics and information gathered during the phase of online verification under ‘Operation Clean Money’, the Income Tax Department gathered a list of eminent persons, who had deposited substantial Cash in bank account(s) during the demonetization period but have not filed Income tax Return for A Y 2017-18. The data reveals that the ITA 611 of 2023 NDDP and TEC Society Ltd assessee has deposited by Cash of Rs.14,64,832/- in its bank accounts during the demonetization period in old currency notes.
The assessee was given sufficient opportunities by issuing several statutory notices, but the assessee has failed to comply with the notices and failed to furnish details as called for. Thereafter, a final show-cause notice dated 06-11-2019 was issued and served by e-mail, which was also remained un- complied with. As per e-filing portal of Income Tax Department, the assessee has filed its ITRs for the earlier years and even though material available in record through bank statement show that the assessee has conducted its activities beyond the period A.Y 2016-17 also, but has not filed ITR for the AY 2017-18, and not offered Income for taxation and has not paid taxes due thereon.
The assessee has failed to furnish any details relating to business activities undertaken by it such as nature of Income earned, details of bank accounts, details of cash deposits made in the bank accounts etc. A final show-cause notice dated 06-11- 2019 was issued and served by e-mail, the assessee proposing to pass best judgment assessment u/s 144 of the Act and determine the sum payable by the assessee on the basis of material evidences collected during the course of assessment proceedings. The case was finally fixed for a hearing on 12-11-2019. On the appointed date no details were furnished through E-Proceedings. The Assessing Officer was left with no option but to complete the best judgment assessment on the basis of material evidence
ITA 611 of 2023 NDDP and TEC Society Ltd gathered during the assessment proceedings. Thus, the Assessing Officer completed the assessment u/s 144 of the Act and made a demand of at Rs.1,44,13,592/- and also initiated penalty proceedings separately.
Feeling aggrieved with the assessment order, assessee filed appeal before the ld.CIT(A), who upheld the action of the Assessing Officer by observing as under:
“5.2.1 I have considered the order of Assessing Officer, facts and circumstances of the case and also perused the material available on record. The appellant is a cooperative society engaged in the business of providing credit facilities to its members. The society is registered as “The Nellore District Departmental Posts & Page 27 of 29 AACTT5322J- THE N.D.D. P&T E.C.C. SOCIETY LTD A.Y. 2017-18 ITBA/NFAC/S/250/2023-24/1056964246(1) Telegraphs Employees Cooperative Credit Society Ltd.”, Nellore vide Registration No. L. 1105, Nellore. The area of its operations is the entire Nellore District. The assessee is registered as a Co-operative Credit Society registered under the Andhra Pradesh Societies Act. The assessee is engaged in the activity of providing services to its own members, by providing credit facilities to its members from whom it charges maintenance and also receives contribution from its members.
5.2.2 On perusal of the A.O’s order, it is noted that the A.O. had information in possession that the assessee had deposited Rs. 14,64,832/- in IDBI Bank, Nellore A/c No. 033710400032285 during demonetization period but no return of income was filed by the assessee. Accordingly, the A.O. issued notice u/s 142(1) of the Income Tax Act, 1961 on 23.03.2018. But, the appellant had not filed return of income for the year consideration. During the assessment proceedings, the A.O. has provided numerous opportunities to the assessee for furnishing return of income or submission but the appellant has not filed any submission. Accordingly, the A.O. concluded the assessment u/s 144 of the Income Tax Act, 1961 by making following addition:- (i) Unexplained Cash deposited of Rs. 10,25,132/- u/s 69A (ii) Addition of Rs. 1,33,88,460/- on account of net profit of the society due to non-filing of return of income.
ITA 611 of 2023 NDDP and TEC Society Ltd
5.2.3 During the appellate proceedings, the notices of hearing were issued to the appellant on various dates. In response to the notices issued, the appellant filed written submission. On perusal of A.O.’s order and submission of the appellant, it is noticed that no return has been filed by the appellant for the year consideration. As the appellant has not filed return of income for the year under consideration, therefore, it is not eligible for deduction u/s 80P of the Income Tax’1961. The proper recourse for the appellant would be to file a condonation of delay application before the Pr. CIT/ CIT. Hence, unless the delay is condoned, no relief can be given by the CIT(A) on this ground.
The following case laws support the above view:- • The Hon’ble Calcutta High Court in the case of CIT v Shelcon Properties P Ltd [2014] 44 taxmann.com 170 (Calcutta)/[2014] 225 Taxman 165 (Calcutta)(Mag.)[2015] 370 ITR 305 (Calcutta)/[2015] 273 CTR 106 (Calcutta)
• The Hon’ble Calcutta High Court in the case of Suolificio Linea Italia (India)(P.) Ltd. V JCIT [2018] 93 taxmann.com 462 (Calcutta)/[2018] 255 Taxman 477 (Calcutta)/[2018] 407 ITR 16 (Calcutta) Page 28 of 29 AACTT5322J- THE N.D.D. P&T E.C.C. SOCIETY LTD A.Y. 2017-18 ITBA/NFAC/S/250/2023-24/1056964246(1)
• The Hon’ble Supreme Court in the case of Prakash Natth Khanna v CIT [2014] 135 Taxman 327 (SC)/[2014] 266 ITR 1(SC)/[2014] 187 CTR 97 (SC)
• The ITAT Rajkot Bench (SPECIAL BENCH) in the case of Saffire Garments v ITO [2012] 28 taxmann.com 27 (Rajkot) (SB)/[2012] 20 ITR(T) 623 (Rajkot) (SB)/[2013] 140 ITD 6 (Rajkot)(SB)/[2013] 151 TTJ 114 (Rajkot) (SB)
• The ITAT Mumbai Bench in the case of Dwarakadas G. Panchmatiya v ACIT 2015] 57 taxmann.com 2 (Mumbai)/[2015] 44 ITR(T) 74 (Mumbai)/[2015] 153 ITD 625 (Rajkot)/[2015] 172 TTJ 70 (Mumbai))
6.0 As a result, the appeal of the appellant is dismissed and the order of the A.O. is hereby confirmed.”
Aggrieved with such order of the learned CIT (A), the assessee is now in appeal before us.
ITA 611 of 2023 NDDP and TEC Society Ltd
The learned Counsel for the assessee submitted that the learned CIT (A) NFAC has issued only 3 notices for the hearing and in absence of any reply from the side of the assessee, learned CIT (A) NFAC dismissed the appeal of the assessee. He submitted that the learned CIT (A) NFAC has not decided the appeal on merit and has dismissed the appeal on account of non-appearance by relying on various decisions. The ld. AR further submitted that in the interest of justice, the assessee should be given a last opportunity to substantiate its case.
Per contra, ld. DR relied on the orders of lower authorities.
We have heard the rival arguments made by both the sides and perused the material available on record. We find due to non-submission of the requisite details despite number of notices issued by the learned CIT (A), the ld.CIT(A) in the ex-parte order passed by him dismissed the appeal. It is the submission of the learned Counsel for the assessee that given an opportunity, the assessee is in a position to offer explanation with all the supporting documents to the satisfaction of the learned CIT (A). In view of the above reasons, in our view, the ends of justice will be met if the matter is remanded back to the file of ld.CIT(A) with a direction to decide the issue after considering the documents available on record and affording the opportunities of hearing to the assessee in accordance with law.
ITA 611 of 2023 NDDP and TEC Society Ltd 12 The assessee shall be at liberty to file documents, if any, as required for proving its case and the ld.CIT(A) shall consider the evidences, if any, filed by the assessee. Needless to say the ld.CIT(A) shall examine those documents / evidence filed by the assessee and also the other documents available on record. After considering the documents filed by the assessee and the submissions made by the assessee, the ld.CIT(A) shall pass a detailed speaking order dealing with the contentions of the assessee. We have not adjudicated the other grounds on merits as we are setting aside the orders passed by the lower authorities to the file of ld.CIT(A) for fresh adjudication. Thus, the grounds of the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is treated as allowed for statistical purposes.
Order pronounced in the Open Court on 19th March, 2024.