Nanol Dudh Utpadak Sahkari Mandali Ltd. Vs ITO (ITAT Ahmedabad)
Non-Filing of Return Proves Costly:- Belated 148 Return & Afterthought Accounts—ITAT Sustains 1% NP Estimation
The Ahmedabad SMC Bench of the ITAT, in The Nanol Dudh Utpadak Sahakari Mandali Ltd. vs ITO (ITA No. 1749/Ahd/2025, AY 2020-21), dismissed the appeal and upheld estimation of net profit @ 1% of turnover where the Assessee, a primary milk co-operative society, failed to file return u/s 139(1) and filed a belated return only in response to notice u/s 148, just before limitation.
The AO reopened the assessment based on GST turnover of ₹6.32 crore and cash withdrawals of ₹2.38 crore. Though an initial show-cause proposed estimation @ 8%, the AO, considering the nature of milk co-operative activities and thin margins, restricted the estimation to 1%, determining income at ₹6.32 lakh. The CIT(A) confirmed the addition, observing total non-compliance, delayed filing, and that audited accounts produced at appellate stage were an afterthought.
The Tribunal held that where the Assessee neither filed original return nor complied during assessment, estimation u/s 144 was justified. It further held that even if audited accounts existed, failure to file return within due date disentitled the Assessee from any benefit under section 80P due to section 80AC, and therefore the plea for adopting lower profits could not be accepted. Finding no infirmity in estimation @ 1% of turnover, the ITAT confirmed the orders of AO and CIT(A) and dismissed the appeal.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal is filed by the Assessee as against appellate order dated 30-07-2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the reassessment order passed under section 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2020-21.



