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Income Tax Appellate Tribunal, PANAJI BENCH, PANAJI
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI G. D. PADMAHSHALI
॥ आयकर अपीलीय न्यायाधिकरण, पणजी न्यायपीठ, पणजी में॥ IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH, PANAJI BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER (Through Virtual Hearing from Pune) आयकर अपऩल सं. / ITA No. 84/PAN/2022 निर्धारण वषा / Assessment Year : 2017-18 The Omkar Urban Co-op. Cr. Society Ltd. A/p. : Kangral (Bk.), Belagavi. PAN: AAAAT3508P . . . . . . . अपीलार्थी / Appellant
बनाम / Vs Income Tax Officer Ward-1, Belagavi (Karnataka) . . . . . . .प्रत्यर्थी / Respondent द्वधरध / Represented Assessee by : Mr Chetan Chougule [‘Ld. AR’] Revenue by : Mr N. Shrikanth [‘Ld. DR’] सुनवाई की तारीख / Date of conclusive Hearing : 14/08/2023 घोषणा की तारीख / Date of Pronouncement : 01/09/2023 आदेश / ORDER PER G. D. PADMAHSHALI; This appeal of the assessee instituted u/s 253(1) of the Income-tax Act, 1961 [‘the Act’ hereinafter] is directed against DIN & order No. ITBA/NFAC/S/250/2022-23/1043826990(1) dt. 13/07/2022 of National Faceless Appeal Centre [‘NFAC’ hereinafter] passed u/s 250 of the Act for assessment year 2017-18 [‘AY’ hereinafter]
Briefly stated facts of the case are; 2.1. The assessee is a credit co-operative society engaged in providing credit facilities to its member and in the first instance was identified as non- filer for the AY 2017-18 under adjudication.
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2.2. Pursuant to notice u/s 142(1) of the Act, the assessee filed its return on 20/09/2019 declaring NIL income after claiming a deduction ₹15,02,301/- u/s 80P(2)(i) of Act, however failed to substantiate sources against cash deposits made during demonetisation, consequently the Ld. AO by an order dt. 18/11/2019 framed an assessment to the best of his judgment u/s 144 of the Act, by treating entire cash deposits as unexplained income u/s 68 of the Act and further denied a claim of 80P deduction for not complying with the time lines prescribed by section 139(1) of the Act.
2.3. Aggrieved assessee unsuccessfully challenged the best judgement assessment in an appeal before first appellate authority, for the reason by present appeal the assessee is before Tribunal with following grounds; 1. Because, the learned Commissioner of Income Tax (Appeals) denied the deduction claimed under section 80P(2) of the Income Tax Act, despite giving the detailed written submission on eligibility of the claim under chapter VIA of the Income Tax Act.
Because, the learned Commissioner of Income Tax (Appeals) upheld the additions under section 68 of the Income Tax Act, without giving proper opportunity to the Appellant and without asking for the documents which are necessary for the conclusion of the Appeal, thereby deprived the natural justice.
Because, the learned Assessing Officer has passed the best judgement assessment under section 144 of the Income Tax Act, without giving proper opportunity to the Appellant, the said order of the Assessing Officer is bad in law and needs to be set aside
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The Appellant has filed the return of income in pursuance of section 142(1) of the Income Tax Act, 1961 on 20-09-2019 but the same was overlooked by the Assessing Officer and made best judgement order u/s 144(1)(b) of the Income Tax Act.
Because, the Assessing Officer made additions wrongly under section 68 of the Income Tax Act, for cash credits based on deposits in bank, without going through the books of accounts maintained by the Appellant
Because, the Assessing Officer has wrongly disallowed the deduction claimed under section 80P(2)(a)(i) of the Income Tax Act, despite Appellant being Cooperative Credit society.
The appellant craves leave to add and or alter any of the ground of appeal before or at the time of hearing.
After hearing to rival contentions; subject to provisions of rule 18 of Income Tax Appellate Tribunal Rules, 1963 [‘ITAT-Rules’ hereinafter] perused material placed on record, and duly considered the facts of the case in the light of settled legal position which are forewarned to parties present.
There arisen two issues for our consideration in the present case viz; (1) denial of 80P deduction claimed in the return of income filed beyond prescribed due date in response to notice u/s 142(1) of the Act. (2) addition towards unexplained cash credit owning to failure to substantiate the cash deposits made during the period of demonetisation. Insofar as later issue is concerned the appellant alleges violation of principle of natural justice for not
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calling necessary details before invoking section 68 of the Act and in relation to former issue the assessee denies the applicability of section 80AC in its case.
We note that, 5.1 In this case of appellant society an information under ‘Operation Clean Money’ [‘OCM’ hereinafter] was received reporting substantial deposit of ‘Special Bank Note’ [‘SBN’ hereinafter] into its bank accounts maintained with two banks viz; ‘BDCC Bank’ and ‘Syndicate bank’ (detailed at para 2 placed at page 2/13 of assessment order) during the declared period of demonetisation. Consequent to which the assessee by notice dt. 27/11/2017 u/s 142(1) of the Act was called upon to furnish ITR by 27/12/2017 and evidence explaining source of SBN deposits. Albeit assessee filed its ITR on 20/09/2019, however failed to substantiate with cogent evidence the very nature and source of ‘SBN’ deposits, for the reason entire deposits were held as unexplained and brought to tax u/s 68 of the Act. The failure of the assessee continued in first appellate proceedings too, which yielded the same result.
5.2 In present proceedings, the appellant filed a paper book containing 60 pages and by details placed at page no. 17 to 29 the assessee claimed to had an opening balance of 18,87,945/- ‘SBN’ as on 09/11/2016 and also claimed to have received balance ‘SBN’ from 74 members during first four days of demonetisation period i.e. 09/11/2016 to 12/112016. These details however
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were neither placed before Ld. AO nor before first appellate authority. The assessee also failed to showcase to us any good reason beyond its failure to adduce the same during any of the proceedings below, thus did the rights and liabilities of rival parties remain to be determined in accordance with law.
5.3 In these circumstances without offering any comment on merits of the case, we deem it fit to remand this issue to the file of Ld. NFAC with a direction to deal therewith in accordance with the applicable provisions of law and pass speaking order in terms of sub-section (6) of section 250 of the Act, of course after according reasonable opportunity of hearing to the assessee. Thus this issue and related grounds of addition made u/s 68 of the Act are allowed for statistical purposes and stands adjudicated accordingly.
5.4 Now coming to issue of denial of 80P deduction by the tax authorities below; it shall suffice to state that, the clause (ii) of section 80AC of the Act obligates filing of return within time allowed u/s 139(1) of the Act and failing to the assessee disentitles itself to all such deductions which are otherwise available to it u/c VI-A of the Act. It is worthy note that, this provision disentitling came into effect from AY 2018-19, therefore the tax authorities below ostensibly seems to have overlooked in applying provisions of section 80AC of the Act to the present case. Admittedly, the impugned AY involved in the present case is 2017-18; therefore the provisions of section 80AC cannot have any application to the case under adjudication, resultantly the claim must succeed on this score. Ergo all grounds relating the claim of
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deduction u/s 80P of the Act stands allowed and adjudicate in favour of the assessee.
In result, the appeal is ALLOWED FOR STATISTICAL PURPOSE in aforestated terms. U/r 34 of ITAT Rules, order is pronounced in open court on this Friday 01st day of September, 2023.
-S/d- -S/d- PARTHA SARATHI CHAUDHURY G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; ददनाांक / Dated : 01st day of September, 2023. आदेशकीप्रनिनलनपअग्रेनषि / Copy of the Order forwarded to : 1.अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The NFAC, New Delhi. 4. The Pr.CIT, Panaji 5. DR, ITAT, Bench, Panaji 6.गार्डफ़ाइल / Guard File.
* (Allotment 0:1) आदेशानुसार / By Order वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्यायादधकरण, पुणे / ITAT, Pune.
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