TaxTMI 
TaxTMI 
2026 (7) TMI 1634
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....nal Faceless Appeal Centre, Delhi [hereinafter in short "Ld. CIT(A)"] passed under section 250 of Income Tax Act, 1961 [hereinafter in short "the Act"] dated 26.12.2024 which has emanated from the order of the Ld. Assessing Officer [hereinafter in short "Ld.AO"] dated 21.03.2022 passed under section 147 r.w.s 144B of Income Tax Act, 1961 [hereinafter in short "the Act"]. 3. The grounds of appeal taken by the assessee in Form No. 36 are as under:- "1. Both in law and in Facts of the case, the order made by the Ld. Commissioner of Income Tax (Appeals), NFAC, is bad in law, arbitrary, contrary to the provisions of law and against the principles of natural justice. 2. On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals), NFAC, erred in sustaining the order of National faceless assessment Centre Delhi, by confirming the addition made of Rs. 1,42,84,915/- towards cash deposits. 3. The Ld. Commissioner of Income Tax (Appeals), NAC, Delhi is wrong in rejecting the contention of the assessee towards cash deposits stating that the assessee failed to furnish the information called for though the assessee provided deta....
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.... advances made to Members in earlier years. However, in absence of documentary evidences being actually produced and examined, like cash book, audit reports and other supporting evidences, the explanations offered, has not been found to be satisfactory and the assessment was completed on a total income of Rs. 1.42 crores (by treating the bank deposits as unexplained under section 69A of the Act). 6. The matter carried in appeal before the Ld. First Appellate Authority has been dismissed in absence of any proper representation on the part of the assessee in course of Appellate Proceedings where the Ld. CIT(A) has observed as follows:- "x. Also evidently the assessee has neither submitted any satisfactory reply nor taken any initiative to respond to any of the notices despite being given opportunities to do so. It is pertinent to mention here that appeal belongs to Assessment Year 2015-16 and the assessee failed to produce any submission during the appellate proceedings in support of his grounds of appeal. Thus, it is held that the appellant had nothing more to submit except for raising the ground. xi. In view of the above facts, it is noted that, the Hon'ble....
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....r documentary evidences contained in the Paper Book, which includes copy of loan ledger account, Members day book, evidences of registration number of the Members of the society (with photographs), members register, along with individual identity, and cash receipts book as maintained by the assessee are enclosed and such books of accounts of the assessee-society are duly audited by the Auditors appointed by the Registrar of cooperative societies as per provisions of the State Cooperative Societies Act, and further report which is the tax audit report as required under section 44AB of the Act 61, has also been obtained and furnished before the AO belatedly which has not been considered. 8. Ld.AR further referred to the trading and profit and loss account and balance sheet, contained in the Paper Book and submitted that all details are contained therein which has been audited and accepted as correct by the auditors and the sources of cash that is deposited in bank has come out of receipts from the Members of the society only which also includes recovery of loans with interest, in the normal course of business activity of the assessee, which for all practical purpose are the core f....
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....udit reports (TAR) and the assessee is also directed to file all necessary supporting papers, submissions and documentary evidences along with books of accounts to satisfactorily explain the sources of cash, identity, the genuineness and the creditworthiness of the members to the satisfaction of the AO and to fully cooperate in fresh assessment proceedings. 12. The assessee will be allowed reasonable opportunity of being heard and notice to be issued in e-mail ID in the portal and also in the e-mail ID of the counsel of the assessee as contained in Form No. 36 as "[email protected]", as per procedure laid down in section 282 of the Act. 13. We have not expressed any opinion on merits of the case and all legal issues are left open. 14. In the result, appeal of the assessee is allowed for statistical purposes. ITA No. 47/VIZ/2025 (A.Y. 2016-17) 15. The facts of the case are identical to that of the A.Y. 2015-16 and the grounds of appeal contained in Form No. 36 are also the same. Our observations in ITA No. 46/VIZ/2025 for the A.Y. 2015-16 applies mutatis mutandis to this year also. The appeal for this assessment year is also remanded back to the file of Ld.AO f....
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...."as per 80AC filing of return of income on or before due date specified u/s. 139(1) is not mandatory" for claiming deduction u/s. 80P for A.Y 2017-18 and earlier years. 8. The Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi erred in confirming addition of Rs. 21,74,756/-made u/s. 40a(ia) towards non deduction of TDS since the provisions of 194A(1) are not applicable where amount of interest is credited or paid to the members of the society. 9. For these reasons and those which may be urged at the time of hearing of appeal and on the facts and circumstances of the case the disallowance of deduction claimed u/s. 80P amounting to Rs. 25,89,908/- u/s. 80P and 30 percent of interest amounting to Rs. 21,74,756/- u/s. 40(a)(ia) aggregating to Rs. 47,64,664/- Shall be deleted." 19. In this year under appeal, the issue relates to the disallowance of deduction claimed under section 80P(2)(a)(i) of the Act amounting to Rs. 25.89 lakhs and disallowance for non-deduction of TDS under section 40(a)(ia) of the Act amounting to Rs. 21.74 lakhs. 20. In absence of any representation before the Ld.AO in the course of assessment proceedings and in absence of valid return ....
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....erative society." Referring to the above, Ld.AR prayed for deletion of the additions and has prayed for adequate relief. 25. Ld. Departmental Representative (hereinafter in short "Ld. DR") relied on the order of the Ld. CIT(A) and submitted that it needs to be verified whether the interest has been paid to the Members of the society or to any outsiders because the same is not apparent from record in absence of any documents being filed before the Ld.AO where the order has been passed exparte. He further submitted that assessee claim to have filed return of income u/s. 139(4) which has been accepted by the portal, but the same is not apparent from the Assessment Order and in absence of any valid return on record, claim for deduction under section 80P cannot be allowed and he further submitted that both the issues needs to be verified from assessment records. 26. We have heard the rival submissions and considered the materials on record and we are of the opinion that interest paid / payable to the Members of the cooperative society are exempt from deduction of TDS as per provisions of section 194A(3) (v) of the Act, but the issue raised by the Ld. DR regarding the verificati....