Sanjivani Mahila Gramin Bigar Sheti Sahakari Pat Sanstha Vs ITO (ITAT Nagpur)
Income Tax Appellate Tribunal (ITAT), Nagpur Bench, has set aside an order by the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre, Delhi, that had confirmed an arbitrary 10% addition to cash deposits of Sanjivani Mahila Gramin Bigar Sheti Sahakari Pat Sanstha Maryadit, a co-operative society. The ITAT ruled that once an assessee’s explanation regarding the source of cash is found to be substantially correct and not disproved, no addition under Section 69A of the Income Tax Act, 1961, can be made merely on suspicion or to ‘safeguard revenue interests’.
The appeal, filed by the assessee for the assessment year 2019-20, primarily challenged the addition of ₹14,57,208, representing 10% of total cash deposits amounting to ₹1,45,72,081, deemed as unexplained money under Section 69A.
Case Background
Sanjivani Mahila Gramin Bigar Sheti Sahakari Pat Sanstha Maryadit, a co-operative society registered under the Maharashtra State Co-operative Societies Act, 1960, filed its income tax return on August 29, 2019, declaring a total income of ₹1,27,000 under Permanent Account Number (PAN) AARAS7485B.
Information from the Income Tax Department’s database indicated significant cash deposits by the assessee: ₹12,00,081 in Central Bank of India and ₹1,33,72,000 in Bhandara District Central Cooperative Bank, totaling ₹1,45,72,081. Additionally, the assessee had earned interest income of ₹1,69,070 from Central Bank of India. As the assessee’s case was flagged in “non-filers” records, the Assessing Officer (AO) re-opened the assessment under Section 147 of the Act.
