THE MULLANA AGRICULTURE COOP SOCIETY LIMITED,AMBALA CITY vs. ITO, WARD-5, AMBALA

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

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).

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.

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).

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.

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

Vagish Sharma, C.A. Thereafter, the assessee Society

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.

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

statistical purposes.

Order pronounced in the Open Court on 8th

January,2024.

Sd/- Sd/-

(VIKRAM SINGH YADAV) (A.D.JAIN ) VICE PRESIDENT ACCOUNTANTMEMBER “Poonam” आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. .��यथ�/ The Respondent 3. आयकर आयु�/ CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar