Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, CHANDIGARH
Before: SHRI A.D.JAIN & SHRI VIKRAM SINGH YADAV
आदेश/ORDER
PER A.D.JAIN, VICE PRESIDENT
This is assessee's appeal for assessment year 2017-18 against the order dated 15.07.2022 passed by the ld. CIT(A)
NFAC, Delhi. The following grounds have been taken :
1. That the learned AO has erred in law and facts in initiating and completing assessment u/s 143(3) because the order passed is both against facts and erroneous in law because the income of the society is exempt.
2. On the facts and circumstances of the case the Ld. AO has erred in having made an addition of Rs. 1,64,33,133/-treating the same as unexplained cash credit u/s 68 of the Income Tax Act.
ITA 274/CHD/2023 A.Y. 2017-18 2
2. At the outset, it is noted that there is a delay in filing the present appeal of 233 days. In this regard, the assessee has filed an application dated 28.12.2023 explaining the reasons/circumstances for occurring the delay in filing of the appeal. An affidavit of Mr. Deepak Kumar seeking condonation of delay has also been filed, the contents of the same are reproduced hereunder :
Affidavit of Mr. Deepak Kumar on behalf of The Mullana Primary Agriculture Cooperative Society Limited, Ambala City (Person responsible).
That the appeal filed by Assessee society before the Deputy Commissioner (Appeals) was disposed of by Order dated 15.07.2022 passed by Dy. Commissioner (Appeals), Panchkula.
That the deponent is person responsible for and on behalf of the behalf of The Mullana Primary Agriculture Cooperative Society Limited, Ambala City. 3. That the time for filing of the appeal before the Tribunal was to expire on 30.09.2022. 4. That the mail id and mobile number provided in the appeal was given by the Manager appointed at that time but the Manager of the Cooperative Society was transferred to another society so he did not give any message to the old PACS about the notice of reply to the appeal coming to this PACS and as the appeal is now online , no notice was received manually by PACS and the new Manager had no idea about it and when the department put a lien on the Bank Account, the new Manager came to know about it. 5. Keeping in view the above facts, please allow condonation of delay in submitting reply. Please allow me to represent my case again.
After considering the application of the assessee for condonation of delay and affidavit on behalf of the assessee, we find that the delay of 233 days in filing the appeal is ITA 274/CHD/2023 A.Y. 2017-18 3 inadvertent and bonafide and the assessee was prevented by sufficient cause from filing the appeal in time.
The ld. DR did not raise any specific objection.
Accordingly, we condone the delay and the appeal is taken to be decided on merits. working for its members only. The case was selected for scrutiny u/s 148 of Income Tax Act, 1961 for the A.Y. 2017- accepted an aggregate amount of Rs.1,64,33,133/- in Specified Bank Notes during the demonetization period from its members which was deposited in the account in Ambala Central Cooperative Bank Ltd. In its reply, the assessee explained that the society is a primary agriculture co- operative society registered with Registrar, Co-operative Societies, Ambala. Farmers, Labour workers, Small Shopkeepers and Rehri/Fadi owners of the nearby villages are members of the society. The society maintains account with the Ambala Central Cooperative Bank Ltd. The society is controlled by the said bank as per the scheme of the Haryana Government and is part and parcel of the said bank.
ITA 274/CHD/2023 A.Y. 2017-18 4 The nature of business of the society is to take deposit from its members in the form of its share capital or deposit and also give loans to the members for agriculture purposes. The society then takes loan from the said bank and also makes deposit with the bank as share capital and deposit. The sole aim is to encourage thrift and cooperation among the members by pooling financial resources and using the same to help the needy members. The assessee provided the details of cash deposited during the demonetization period before the Assessing Officer in reply to the notices issued.
From such reply filed by the assessee, forming part of the paper book, we find that assessee had provided name and address of the members who had deposited cash with the assessee during the year under consideration. The assessee had also provided the PAN number of some of its members.
However, the Assessing Officer was not satisfied with the reply and he made the addition of Rs.1,64,33,133 treating the same as unexplained cash credit u/s 68 of the Act, against which the assessee went in appeal before ld. CIT(A).
Before the ld. CIT(A), the assessee was provided many opportunities but the assessee remained non-compliant. No material facts were brought on record to rebut the finding of ITA 274/CHD/2023 A.Y. 2017-18 5 the Assessing Officer. The assessee failed to explain the nature and source of cash deposits for the assessment year under consideration. Accordingly, the ld. CIT(A) dismissed the appeal of the assessee and confirmed the addition of Rs.1,64,33,130/- made by the Assessing Officer.
Aggrieved the assessee is in appeal before the Tribunal.
We have heard the rival submissions and perused the material available on record. It has been submitted on behalf of the assessee in the Application for Condonation of Delay and such submissions have not been controverted on behalf of the Department that the Manager and staff of the assessee Society are from the nearby villages. They are not aware of the provisions and technicalities of the Income Tax Act.
They also have no knowledge as to how to operate Income Tax Portals. The Society changed its Chartered Accountant and engaged anther C.A. Mr. Vagish Sharma in February, 2020 for taxation purposes. He was provided user name and password of Income Tax Site. He was asked to keep a check on the portal and to e-mal any notice or order and to do the needful. He assured that the needful was being done. Shri Karam Singh, Manager of the assessee Society was transferred in March,2022. He, however, did not provide any ITA 274/CHD/2023 A.Y. 2017-18 6 password of the Income Tax Site or e-mail which was registered with the Income Tax Department, nor did he inform the assessee Society about any messages regarding any notice or order. In December,2022, Shri Vagish Sharma, C.A. informed the Manager of the assessee Society that the CIT(A) had rejected the first appeal filed in January,2020 and appeal had to be filed before the ITAT. He asked the Manager of the assessee Society to send him Rs.10,000/-, to be deposited on account of Appeal Fee in the Tribunal. The said amount was immediately paid to him. He deposited the Challan for the Appeal Fee before the ITAT on 05.01.2023 and a copy of the Challan Deposit Receipt was given to the Society. The assessee had no access to the e-mail registered with the Income Tax Department. As such, it was not aware of the order passed by the ld. CIT(A), till the time their C.A. informed them about the same, in December,2022. In April,2023, when all the bank accounts of the assessee Society, as running in the Ambala Central Co-operative Bank, Ambala were attached by the Income Tax Department, did it come to the notice of the assessee Society, that a huge demand was outstanding against the Society due to some orders passed in assessment years 2015-16 and 2017-18.
ITA 274/CHD/2023 A.Y. 2017-18 7 The assessee Society, immediately on receipt of notice in this regard, dated 25.04.2023, issued u/s 226(3) of the Income Tax Act that the assessee Society immediately contacted Mr. Vagish Sharma to do the needful. It was only after a lot of persuasion that he filed an appeal before the Tribunal against the CIT(A)’s order for assessment year 2017-18 on 04.05.2023. It was at that time only, that he informed the assessee Society that assessments for assessment year 2015- 16 and 2016-17 had also been made in March,2022 and that some penalty orders had also been passed in September,2022. The assessee Society was shocked to find that no appeals had been filed by him against these orders also, within the prescribed time. He was again requested to do the needful. However, again he kept the Society in the dark, stating that the needful had been done. It was in these circumstances, that the assessee contacted another C.A., Mr. Mukesh Jain in Ambala, to know the status of the cases. It came to knowledge that no appeals against the assessment orders and penalty orders for assessment year 2015-16 and 2016-17 had been filed and also that the appeal before the ITAT had not been attended on the date of hearing by Shri
ITA 274/CHD/2023 A.Y. 2017-18 8 engaged their present counsel on 28.10.2023 for conducting the appeal for assessment year 2017-18 before the Tribunal since Shri Vagish Sharma had failed to attend the dates of hearing before the Tribunal. The assessee Society lodged a complaint to the Director (Discipline), The Institute of Chartered Accountants of India, New Delhi, against Mr. Vagish Sharma, C.A. for gross negligence in his professional duties. A copy of the said complaint has been filed before us alongwith the application for condonation of delay.
In the above undisputed facts and circumstances, the assessee is found to have suffered for no fault of their own.
After considering all the facts and circumstances, we are of the considered opinion that in the interest of justice, the assessee should be given an opportunity of being heard and the assessee should not suffer for the mistake and negligence of the counsel. Accordingly, the file is restored to the file of ld. CIT(A) to decide the matter afresh in accordance with law after giving a reasonable opportunity of being heard to the assessee. The assessee, no doubt, shall cooperate in the fresh proceedings before the CIT(A).
ITA 274/CHD/2023 A.Y. 2017-18 9
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 8th January,2024.