Case Law Details
Shramik Nagri Vs ITO (ITAT Pune)
In the matter abovementioned ITAT allowed appeal of the assessee for statistical purpose by way of remand after considering that assessee was unable to submit details before CIT (A) due to unfortunate accident of CA.
Assessee had not filed Return for AY 2015-16. Case was reopened and assessment in the matter is completed ex-parte at Rs. 5,03,03, 556/- u/s. 144 r.w.s. 147 on account of of time deposits treating the same as unexplained income u/s. 69A. While completing assessment AO collected statement of accounts u/s 133(6) from various banks and mentioned chart showing time deposits. CIT (A) dismissed appeal ex-parte.
It is submitted that assessee could not file the details before CIT(A) as CA had met with an accident and was admitted in a hospital for a long period. AO himself has mentioned name of the Depositors, Dates and Amounts in the Chart produced by AO in the assessment order. Hence, it is requested to set-aside the matter to CIT (A) for de-novo adjudication. Revenue relied upon the orders of lower authorities.
After considering the submissions ITAT observed that AO himself had mentioned the names of the individuals against each account number and the amounts in the chart. It is clear from the chart that the Individuals have deposited those amounts in the Time Deposits with the bank. This fact was not rebutted by revenue. Hence, amount cannot be taxed in the hands of assessee under section 69A. As assessee unable to file requisite information before CIT (A) due to unfortunate accident of his CA hence matter is remanded back to CIT (A).
FULL TEXT OF THE ORDER OF ITAT PUNE
This is an appeal filed by the Assessee against the order of ld.Commissioner of Income Tax(Appeals)[NFAC] passed under section 250 of the Income-tax Act, 1961, for the A.Y.2015-16 dated 28.09.2024. The Assessee has raised the following grounds of appeal :
“1] The Ld. CIT(A)/NFAC has erred in confirming an ex-parte assessment order u/s. 144 r.w.s. 147 of the Act determining income at Rs. 5,03,03,556/- without considering the fact of the case which is completely unjustified and devoid of merits.
2] The Ld. CIT(A)/NFAC has erred in dismissing the case ex-parte without waiting for the appellant to furnish the submission and evidences. The Ld. CIT(A)/NFAC ought to have appreciated the appellant could not respond to notices as its consultant recently had major accident and was therefore unable to furnish the submission within stipulated time.
2.1] The Ld. CIT(A)/NFAC erred in dismissing the contention of the appellant only on the ground that no submission was made without appreciating the facts explained in statement of facts. The matter may therefore please be set aside at appropriate level as it involves verification of evidences etc.
31 The reopening of the case u/s. 148A r.w.s. 149 of the Act is bad in law/time barred and consequently, assessment order passed is also void ab-initio.
4] The Ld. AO has erred in making addition of Rs. 1,44,89,390/- on account of cash deposits and Rs. 3,53,47,331/- on account of time deposits treating the same as unexplained income u/s. 69A of the act without appreciating facts of the case & without appreciating that the said provisions were not applicable in this case.
4.1) The Ld. AO failed to appreciate that the appellant has maintained proper books of account and got the same audited wherein all the cash deposits & time deposit transactions were duly accounted for and accordingly, no addition was warranted in this case.
4.2] The Ld. AO ought to have appreciated that cash deposits & time deposits were sourced out of daily deposits collection from members accepted during the year in the course of its banking business.
4.3] The Ld. AO has further erred in not considering the fact that income of the co-operative society is eligible for deduction u/s 80P(2)(a)(i) and accordingly no income is chargeable to tax.
5] The Ld. AO further erred in making addition of Rs. 4,66,835/- on account of interest income earned on these time deposits alleging that the same is unaccounted income.
5.1] The Ld. AO failed to appreciate that the appellant has maintained proper books of account and got the same audited wherein all the interest income on all the time deposits were duly accounted for. In fact the appellant has offered higher amount of interest income in its Income & Expenditure A/c. Thus, no separate addition is warranted.
6] The Ld. AO has erred in relying upon the incorrect information. The Ld. AO ought to haverelied upon the correct information which is related to the appellant and the addition made is therefore not correct and justified.
The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”
Submission of Ld.AR :
2. Ld.Authorised Representative for the assessee submitted a paper book with a petition for admission of additional evidence. Ld.AR submitted that ld.CIT(A) dismissed the appeal of the assessee on account of non-compliance. Ld.AR further submitted that assessee could not file the details before the ld.CIT(A) as Assessee’s Chartered Accountant had met with an accident and was admitted in a hospital for a long period. Ld.AR filed copy of the Affidavit filed by the Chartered Accountant i.e. Kshma S. Gundi. Ld.AR also filed copy of the Certificate issued by Shushrut Hospital and copies of the discharge summary along with case records of Sushrut Hospital. Ld.AR submitted that for this reason, assessee could not file details before the ld.CIT(A). Therefore, ld.AR pleaded that case may be set-aside to ld.CIT(A) for denovo adjudication and assessee may be allowed to file documents before ld.CIT(A). Ld.AR filed a paper book containing 92 pages. As per the Index of the paper book, assessee has filed following documents :
> Audited Financials for the FY 2014-15
> Copy of Bank Statement of the appellant with Janaseva Sahakari Bank for FY 2014-15
> Extract from Day Book showing details of cash deposits with Janseva Sahakari Bank Ltd. & source of such cash deposits
> Ledger extracts of Fixed Deposits Accounts kept by the customers (account holders) with the appellant as mentioned in the assessment order
> Copies of the KYCs of customers (account holders) of the appellant making Fixed Deposits with the appellant
> Extract of Day Book showing receipt of cash towards the Fixed Deposits made by customers (account holders) with the appellant and deposit thereof into the Janseva Sahakari Bank
> Extract of Day Book showing Fixed Deposits made by the appellant with Janseva Sahakari Bank & sources thereof
> Submission made at the time of Assessment proceedings.
2.1 Ld.AR also invited our attention to the Page 4 of the assessment order. Ld.AR submitted that the Assessing Officer himself has mentioned name of the Depositors, Dates and Amounts in the Chart produced by Assessing Officer in the assessment order. The said chart has a heading “The Lokseva Sahakari Bank Limited, Pune” has furnished Time Deposits Account statements which are as under :
2.2 The table contains 56 names. Ld.AR submitted that Assessing Officer in the assessment order has admitted that the Deposits pertains to names mentioned in the table, therefore, ld.AO erred in adding the amount of Rs.3,53,47,331/- as time deposits of the assessee, whereas names of some other individuals appeared in the table produced by the Assessing Officer.
Submission of ld.DR :
3. Ld.DR for the Revenue relied on the order of Assessing Officer and ld.CIT(A). We specifically asked ld.DR regarding the table of deposits produced by Assessing Officer from page 4 to 9 of the assessment order having specific names of individuals. We asked ld.DR to explain, when specific names are mentioned by AO himself, how will it be deposits of the Assessee Society! Ld.DR could not answer.
Findings & Analysis:
4. We have heard both the parties and perused the records. It is observed that Assessee has not filed Return of Income for A.Y.2015-16. The Assessing Officer received the information on “insight portal of the Income Tax Department” regarding Time Deposits made by Assessee. The Assessing Officer issued noticed under section 148 of the Act. Since assessee failed to comply, the Assessing Officer passed an ex-parte assessment order. Assessing Officer collected statement of accounts under section 133(6) of the Act from “Janaseva Sahakari Bank Limited, Hadapsar, Pune” and “Lokseva Sahakari Bank Limited, Pune”. In the assessment order, Assessing Officer has stated that Lokseva Sahakari Bank Limited, Pune has furnished Time Deposits, Account Statements which is as under :
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4.1 The total of the said Time Deposits as per the Assessing Officer is Rs.3,53,47,331/-. The Assessing Officer held that Rs.3,53,47,331/- to be income of the assessee and accordingly made addition under section 69A of the Act. However, we have already reproduced the entire chart given by Assessing Officer in the assessment order. The Assessing Officer himself has mentioned that name of the some individuals against each account number and the amounts, thus, it is clear from the chart that the Individuals have deposited those amounts in the Time Deposits with Lokseva Sahakari Bank Limited, Pune. In these facts, which has not been rebutted by ld.DR for the Revenue, we are of the considered opinion that those amounts cannot be taxed in the hands of assessee under section 69A of the Act, as there are some individuals names mentioned against those amounts. It means, those amounts does not belong to the assessee but belongs to those very individuals.
5. We have perused the Affidavit filed by assessee. Assessee’s Chartered Accountant had met with an accident and was admitted in Sushrutha Hospital. We have perused discharged summary of the same. In these facts and circumstances of the case, we find that there is sufficient cause for non-compliance before the ld.CIT(A). Accordingly, we set-aside the order of the ld.CIT(A) to ld.CIT(A) for denovo adjudication. Ld.CIT(A) shall provide opportunity to the assessee. Assessee shall file all the necessary documents before the ld.CIT(A). Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.
6. In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open Court on 31st December, 2024.
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