Municipal Council Dongargarh Vs ITO (ITAT Raipur)
This appeal for Assessment Year 2018-19 was filed against the order dated 26.08.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi under section 250 of the Income Tax Act, 1961.
The assessee challenged the confirmation of additions of ₹3,57,12,724 treated as unexplained investment under section 69 read with section 115BBE and ₹42,83,870 treated as interest income under section 69 read with section 115BBE. These additions arose from deposits in time deposits and interest received from State Bank of India and Chhattisgarh State Power Distribution Company Limited.
The assessee, a local body, had its PAN mistakenly allotted in the status of a Partnership Firm and did not file its income tax return within the prescribed time under section 139(1). Based on available information regarding investments in time deposits and interest income, the Assessing Officer initiated proceedings under section 148 after recording reasons. During reassessment proceedings, the assessee failed to comply despite several opportunities. The Assessing Officer completed the assessment by treating the time deposit amount as unexplained investment and taxing the interest income under “Income from Other Sources,” assessing total income of ₹3,99,96,590 and charging tax under section 115BBE. The CIT(A) dismissed the appeal.
