Cash Deposits By Members Of Society During Demonetization Not Verified In Absence Of PAN & KYC: Bangalore ITAT Asks To Reconsider Relief U/s 80P(2)(A)
Pankaj Bajpai
13 March 2024 1:45 PM IST
The Bangalore ITAT set aside the order passed by CIT(A) for providing relief u/s 80P(2)(a)(i) and 115BBE of Income Tax Act, 1961 and redirect the case back to the file of AO for reconsideration of the genuineness of the deposit during demonetization by the assessee.At the same time, the ITAT also made it clear that in the event, the assessee does not co-operate with the revenue officer, the...
The Bangalore ITAT set aside the order passed by CIT(A) for providing relief u/s 80P(2)(a)(i) and 115BBE of Income Tax Act, 1961 and redirect the case back to the file of AO for reconsideration of the genuineness of the deposit during demonetization by the assessee.
At the same time, the ITAT also made it clear that in the event, the assessee does not co-operate with the revenue officer, the AO will be at liberty to dispose of the matter strictly in accordance with law.
The Bench of the ITAT comprising Madhumita Roy (Judicial Member) and Chandra Poojari (Accountant Member) observed that, “the PAN and KYC in respect of such members of the assessee's society was not furnished either before the AO or before the CIT(A) which could assist the authorities below to consider the genuineness of the income in its proper perspective.” (Para 6)
As per the brief facts of the case, the assessee is a co-operative society engaged in the activity of accepting deposits and providing credit facilities to its members and making investments, filled its return claiming deduction u/s 80P(2)(a)(i) of Rs.68,08,382/- and Nil income. The case was selected under CASS and finally the AO passed the orders u/s. 143(3) upon making disallowance of deduction claimed u/s. 80P(2)(a)(i) for entire amount holding that nominal members are not members in real sense. He further held that interest on investment with SVCC Co-op Bank /and other banks cannot be claimed u/s. 80P(2)(a)(i) and disallowed Rs.1,14,380/-. disallowance was However, no separate made as entire deduction of Rs.68,08,382/- was already disallowed. The Ao also stated that upon comparing the cash deposit made during demonetization period with deposits made in prior years held that the cash in hand was abnormally high and cash deposit of Rs.65,55,000/- was unexplained and required to be taxed u/s. 115BBE.
The CIT(A) deleted the addition made by AO u/s 68 while observing that the AO was incorrect to allege manipulation of books of accounts without any corroborative evidence.
The Bench noted that there is no such proper verification has been done by the CIT(A).
The Bench observed that having regard to the particular facts and circumstances of the matter, genuineness of the deposit made during demonetization by the assessee, needs to be reconsidered.
The Bench also observed that an opportunity of being heard should be provided to the assessee.
The Bench further stated that the evidence on record or any other evidence which the assessee may choose to file at the time of hearing of the matter needs to be considered.
Therefore, on finding lack in verification done by the CIT(A), the ITAT partly allowed the revenue's appeal.
Counsel for Appellant/Department: V. Parithivel
Counsel for Respondent/Taxpayer: Vinay Kulkarni
Case Title: Income-tax Officer verses Shri Chatrapati Shivaji Vividoddeshagala Sahakari Sangha Niyamita
Case Number: ITA No. 929/Bang/2023
