Tribunal Dismisses Appeal, Upholds Review of Cash Deposits During Demonetization for Further Verification.

The Tribunal condoned the delay in filing the appeal to ensure justice and proceeded to address the merits. The assessee's appeal against the Principal Commissioner's order under section 263 of the Income Tax Act was dismissed. The Tribunal upheld the Principal Commissioner's decision to remand the case to the Assessing Officer for further verification of cash deposits made during the demonetization period. The Assessing Officer was directed to verify the source of cash deposits, and if satisfied, no addition would be made; otherwise, the deposits would be treated according to the law. The decision was pronounced on July 21, 2023.

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Issues involved:
The appeal being time-barred due to delay in filing before the Tribunal.

Summary:
The appeal was filed by the assessee against the order of the Principal Commissioner of Income Tax under section 263 of the Income Tax Act for A.Y. 2017-18. The Registry pointed out that the appeal was time-barred as the impugned order was passed on 01.03.2022, and the appeal was filed on 16.01.2023. The assessee filed for condonation of delay, stating that the order was not available on the Portal until 26.12.2022. The Tribunal decided to condone the delay to ensure justice and proceed with the appeal on merit.

The main grievance of the assessee was that the Principal Commissioner erred in setting aside the assessment order and directing the Assessing Officer to reframe it. The case involved a Cooperative Society providing credit facilities and marketing services. The Assessing Officer had disallowed a deduction under section 80P(2) based on the deposited cash during the demonetization period. The Principal Commissioner observed discrepancies in the cash deposits and set aside the assessment order for further examination by the Assessing Officer.

The appeal challenged the Principal Commissioner's order, arguing that the availability of cash should have been verified by the Principal Commissioner instead of referring it back to the Assessing Officer. During the hearing, it was agreed that the Assessing Officer would verify the cash availability, and the Revenue had no objection to this verification.

The Tribunal analyzed the provisions of section 263 of the Act and the powers granted to the Commissioner for revision. The Tribunal upheld the Principal Commissioner's decision to have the Assessing Officer verify the source of cash deposits made by the assessee. If the Assessing Officer is satisfied with the explanation, no addition will be made; otherwise, the deposits will be treated according to the law. The appeal of the assessee was dismissed, and the order was pronounced in open court on July 21, 2023.

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