Keezhuparamba Service Co-operative Bank Ltd. Vs Assessment Unit (ITAT Cochin)
Assessee, a primary agricultural co-operative society registered under the Kerala Co-operative Societies Act, filed revised return of income for AY 2022-23 declaring Nil income after claiming deduction u/s 80P on entire income. Case was selected for scrutiny to verify genuineness of deposits & share capital. AO observed a differential increase of ₹35.05 crore in share capital, treating it as unexplained cash credit u/s 68 & passed order u/s 143(3) r.w.s. 144B on 22.03.2024. CIT(A)/NFAC confirmed the addition, holding that the Assessee failed to furnish “bare minimum documents.”
Before Tribunal, Assessee argued that AO had wrongly clubbed members’ deposits with share capital, leading to incorrect inference. It was submitted that financial statements, return, computation & registration certificate had been filed.
Tribunal noted that AO himself recorded receipt of such documents, hence CIT(A)’s observation was contrary to record. Tribunal further held that the issue of increase in share capital & members’ deposits required fresh examination on correct appreciation of facts. Accordingly, Tribunal set aside CIT(A)’s order & remanded matter to AO for de novo adjudication, directing verification of share capital & deposits strictly with reference to financial statements & allowing Assessee to furnish supporting evidence. Since AY 2020-21 involved identical issue, Tribunal applied same reasoning & restored that year also for fresh adjudication. Thus, both appeals were allowed for statistical purposes.
