ITO Vs Rajivgandhi Grameen Bigarsheti Path Sanstha Marydit (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT) Pune Bench has set aside an order passed by the Commissioner of Income Tax (Appeals) [CIT(A)]/NFAC for the assessment year 2017-18 in the case of ITO Vs Rajivgandhi Grameen Bigarsheti Path Sanstha Marydit. The Revenue had filed an appeal against the CIT(A)’s decision to delete an addition of ₹2,02,56,693 under Section 69A of the Income Tax Act, 1961, which was made by the Assessing Officer (AO) as unexplained money. The primary ground for the Revenue’s appeal was that the CIT(A) had accepted fresh evidence from the assessee during the appellate proceedings without allowing the AO an opportunity to examine this additional evidence, thereby violating the procedure outlined in Rule 46A(3) of the Income Tax Rules, 1962.
The assessee, a co-operative society providing credit facilities, had not filed its return of income, leading to a scrutiny assessment based on cash deposits during the demonetization period. The AO completed the assessment ex-parte under Section 144, adding ₹10,69,000 as unexplained demonetization deposits and ₹1,91,87,693 as unexplained cash deposits during the financial year. In the first appeal, the CIT(A)/NFAC deleted these additions after considering the assessee’s reply and accepting documents like the audit report, cash books, and bank account details, which were not presented to the AO. The Revenue argued before the ITAT that the CIT(A)’s action of admitting fresh evidence and granting relief without a remand report from the AO for verification contravened Rule 46A(3). The assessee contended that the ex-parte assessment was based on an old, inactive PAN, while the return and audit report on the new PAN contained details of the transactions, and another assessment order under Section 143(3) was also passed on the new PAN by a different officer.
