ITO Vs Kochin Co-Operative Society Ltd. (ITAT Cochin)
In a recent judgment, the Income Tax Appellate Tribunal (ITAT) Cochin bench addressed appeals filed by the Revenue concerning the assessment years 2013-14 and 2014-15 against the Kochin Co-operative Society Ltd. The crux of the case pertained to unexplained cash deposits amounting to Rs. 2.39 crores, which had not been reported through an income tax return under section 139(1) of the Income Tax Act, 1961. The society had also failed to comply with notices issued under section 148, leading the Assessing Officer (AO) to make a best judgment assessment under section 144. The AO classified the cash deposits as unexplained income and denied deductions under section 80P.
The Co-operative Society contested the AO’s decision before the Commissioner of Income Tax (Appeals) [CIT(A)], who upheld the denial of the section 80P deduction due to non-filing of returns but accepted the society’s explanation regarding the source of the deposits. The CIT(A) attributed the funds to the society’s business operations, such as a gas agency, medical store, and member-based credit services. However, this acceptance was made based on documents and accounts presented for the first time at the appellate stage, without involving the AO in reviewing these new submissions.
