Rajya Rakhiv Police Karmachari Sahakari Patsanstha Maryadit Vs ITO (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT) in Pune has quashed a tax demand against a cooperative society for the assessment year 2012-13, ruling that the reassessment proceedings initiated by the Income Tax Department were invalid. The case, involving the Rajya Rakhiv Police Karmachari Sahakari Patsanstha Maryadit, centered on a procedural challenge to the reassessment and a substantive dispute over the society’s entitlement to a tax deduction. The tribunal’s decision provides clarity on the scope of reassessment powers and the conditions under which cooperative societies can claim deductions under the Income-tax Act, 1961.
The Origin of the Dispute
The saga began when the cooperative society, which primarily provides credit and loans to its members, failed to file a return of income for the assessment year 2012-13 and did not have a Permanent Account Number (PAN). The Income Tax Department’s Assessing Officer (AO) received information about a cash deposit of ₹35,00,821 in the society’s bank account. Based on this information, the AO, with the necessary approval from a competent authority, initiated reassessment proceedings under Section 147 of the Income-tax Act. The primary reason for reopening the case was the belief that income had escaped assessment due to this unexplained cash deposit.
