2020 (2) TMI 426 - HC - Income Tax

Court Upholds Income Tax Assessment Orders for Co-op Societies

Devapalayam Primary, Telungupalayam Primary Agricultural Cooperative Credit Society, Palladam Farmers Service Cooperative Society Ltd. Versus The Income Tax Officer

The court upheld the assessment orders under Section 144 of the Income Tax Act, 1961, for primary co-operative societies. The petitioners' lack of ... Penalty u/s 271AAC(1) - total credit as reflected in the bank accounts as unexplained money under Section 69 read with Section 115BBE - HELD THAT:- Affidavit accompanying the writ petition deals solely with the provisions of Section 80P of the Act, whereas the impugned orders of assessment do not relate to the provisions of Section 80P at all. Thus, the writ petitions have been filed mechanically and even without perusing the contents of the impugned orders. Upon a perusal of the impugned orders of assessment, find no merit whatsoever in the challenge before me. As pointed out in counter, the contents of the assessment order and the averments in writ petition are wholly unconnected as the addition made in the impugned order is in terms of the Section 69A & 115B of the Act and not Section 80P. Also and more importantly, the petitioner has not co-operated in the least in the framing of assessments and has ignored all communications and notices issued by the Department. It has not even defrayed its statutory responsibility of filing of a return of income for the period in question. Issues:Challenging orders of assessment under Section 144 of the Income Tax Act, 1961 for primary co-operative societies.Analysis:The petitioners, primary co-operative societies, challenged assessment orders under Section 144 of the Income Tax Act, 1961, assessing their income as per the Assessing Officers' judgment. The facts in each petition were similar, except for the demands raised, leading to a common order for disposal. The petitioners failed to file returns for the Assessment Year 2017-18 despite notices under Section 142(1) prompting them to do so. Subsequent reminders and requests for reasons went unanswered. Bank records showed deposits of demonetized notes during demonetization, leading to show cause notices and summons, all of which were ignored by the petitioners.The Assessing Officer proceeded with ex-parte assessments due to the petitioners' non-cooperation, taxing the total credit in bank accounts as unexplained money under Section 69 read with Section 115BBE of the Act. Additionally, penalty proceedings under Section 271AAC(1) were initiated, which prompted the filing of writ petitions against these orders. The Department defended the assessment orders, stating compliance with Act provisions and standard procedures. The petitioners' affidavit focused on Section 80P of the Act, unrelated to the assessment orders, indicating a mechanical filing without understanding the content.Upon review, the court found no merit in the challenge. The assessment orders were based on Section 69A & 115B of the Act, not Section 80P as claimed by the petitioners. The lack of cooperation from the petitioners in assessment proceedings, ignoring communications and failing to file returns, further weakened their case. Consequently, the court dismissed the writ petitions, granting liberty to file appeals before the first appellate authority within three weeks. Connected miscellaneous petitions were closed without imposing any costs.