ITAT Condones 111-Day Delay, Restores Co-operative Society’s Appeal in Rs 91.96 Lakh Cash Deposit Dispute:

The ITAT Bangalore Bench has condoned a 111-day delay in filing an appeal by a credit co-operative society and restored the matter for fresh adjudication. The Tribunal observed that the explanation provided by the society for the delay was plausible and constituted sufficient cause.

The case involved Prathamika Krushi Pattina Sahakar Sangha Niyamit, Savanahalli, for Assessment Year (AY) 2016-17. The Assessing Officer (AO), through an ex-parte assessment order dated January 11, 2024, treated cash deposits of Rs 91.96 lakh in the Vijayapura District Central Co-operative Bank Ltd. as unexplained money under Section 69A of the Income Tax Act, 1961. The entire amount was consequently assessed as the society’s income.

The society approached the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (CIT(A)/NFAC), but the appeal was dismissed without examining the merits because it was filed 111 days late. The society explained that its Board of Directors, including the CEO, had limited education, while its members were agriculturists, and the management was not familiar with income tax provisions.

Before the ITAT, the society also raised additional legal grounds challenging the taxation of gross bank deposits without considering interest expenditure, cost of funds and other related liabilities. The Tribunal admitted these grounds, noting that they were legal in nature, based on facts already available on record, and did not require investigation of new facts.

The tribunal had noted that "the AO has passed ex-parte order by treating the entire cash deposited in the Vijayapura District Central Co-operative Bank Ltd. amounting to Rs91,96,344/- as unexplained money u/s 69A of the Act and assessed on a total income of Rs91,96,344/- by holding that the assessee has willingly avoiding compliance of the statutory notices issued and served from time to time. Further, on perusal of the order of ld. CIT(A)/NFAC, we also observed that the ld. CIT(A)/NFAC dismissed the appeal of the assessee by not condoning the delay of 111 days in filing the appeal without going into the merits of the case."

After considering the submissions, the ITAT held that the society had shown sufficient cause for the delay and condoned the 111-day delay. It admitted the appeal for adjudication on merits and remitted the entire disputed issue to the AO for fresh consideration in accordance with law.

The AO was directed to provide the assessee a reasonable opportunity of being heard. The society was also directed to submit all necessary documents, records and evidence supporting its claims. The appeal was partly allowed for statistical purposes.