Income Tax Appellate Tribunal - Pune
Takshashila Gramin Bigersheti ... vs Income Tax Officer, Ratnagiri on 30 April, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCHES "SMC", PUNE
BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER
आयकर अपील सं. / ITA No.2615/PUN/2025
Assessment Year : 2017-18
Takshashila Gramin Vs. Income Tax Officer,
Bigersheti Sahakari Ratnagiri
Patsanstha Limited,
650, at Post Pali,
Ratnagiri, Ratnagiri-415803
Maharashtra
PAN : AABAT5744J
Appellant Respondent
Assessee by : Shri Pramod S Shingte
Revenue by : Shri Ambar
Date of hearing : 18.03.2026
Date of pronouncement : 30.04.2026
आदे श / ORDER
The captioned appeal at the instance of assessee pertaining to A.Y. 2017-18 is directed against the order dated 26.09.2025 framed by National Faceless Appeal Centre, Delhi arising out of Assessment Order dated 27.12.2019 passed u/s.144 of the Income Tax Act, 1961 (in short 'the Act').
2. Following two issues have been raised for my consideration :
(1) Addition for unexplained cash deposit of Rs.24,14,500/- during the demonetization period; and (2) Eligibility for deduction u/s.80P of the Act for A.Y. 2017-18 in absence of having filed regular return of income u/s.139(1) of the Act.2 ITA No.2615/PUN/2025
Takshashila Gramin Bigersheti Sahakari Patsanstha Limited
3. At the outset, ld. Counsel for the assessee submitted that the assessee society is running from past many years and regular cash deposits have been received by the assessee from its Members, details of which are placed at page 43 of the paper book and from A.Y. 2012-13 to A.Y. 2017-17 cash deposits received during each year are ranging from Rs.1.34 crore to Rs.2.01 crore. Copies of audited financial statements have also been placed on record and detail of cash received from various Members have also been furnished before ld.CIT(A) and therefore the addition for unexplained cash deposit may please be deleted.
4. So far as the allowing of claim u/s.80P of the Act for A.Y. 2017-18 even though the regular return has not been filed, ld. Counsel for the assessee placed reliance on the decision of this Tribunal in the case of Rajya Rakhiv Police Karmachari Sahakari Patsanstha Maryadit Vs. ITO - ITA No.171/Pun/2025 order dated 16.06.2025 where also similar claim has been allowed because the amendment u/s.80AC of the Act has been introduced from A.Y. 2018-19.
5. On the other hand, ld. DR supported the order of ld.CIT(A).
6. I have heard the rival contentions and perused the record placed before me. I observe that the assessee is a Cooperative Society and did not file regular return of income for A.Y. 2017-18. Based on the information about cash deposits during the demonetization period, assessee has been served with notice u/s.142(1) of the Act and 3 ITA No.2615/PUN/2025 Takshashila Gramin Bigersheti Sahakari Patsanstha Limited assessment proceedings have been carried out. Assessee failed to make proper submissions, however, computation of income has been filed. Ld. Assessing Officer completed the assessment by denying deduction u/s.80P of the Act for the net profit for the year at Rs.4,98,861/- and also made addition for unexplained cash at Rs.24,14,500/- thereby assessed income at Rs.29,13,360/-. Assessee carried the matter before ld.CIT(A) and filed detailed written submissions, however, ld.CIT(A) did not take cognizance of all these details and concluded the proceedings partly allowing the assessee's appeal.
7. Before this Tribunal, two issues have been raised. First issue is regarding unexplained cash deposit at Rs.24,14,500/-. From perusal of the paper book 43, I note that the receiving of cash deposit from Members is not a new feature for this year and the assessee has been consistently receiving cash deposits from its Members. Details indicate that from A.Y. 2012-13 to A.Y. 2016-17 yearly cash deposits in bank are approximately Rs.1.34 crore, Rs.1.78 crore, Rs.1.57 crore, Rs.2.01 crore and Rs.1.81 crore followed by cash deposit of Rs.1.91 crore during the year under consideration. Apart from the impugned addition of Rs.24,14,500/-, ld. Assessing Officer has accepted cash deposits for the period other than the demonetization period. I also note that assessee has furnished complete details before ld.CIT(A) and the acknowledgment are placed at pages 73 to 79 of the paper book exhibiting that along with cash book, assessee has furnished list of Members with KYC documents, date-wise list of Members, judicial precedents, 4 ITA No.2615/PUN/2025 Takshashila Gramin Bigersheti Sahakari Patsanstha Limited bank statement, audit report etc. On due consideration of all these details, it remains an admitted fact that the assessee society is consistently receiving cash from its Members and duly maintained the records and are forming part of regular books of account which are audited and the KYC documents of each of the Members have been taken at the time of cash receipt and the same have also been filed before the lower authorities. Except general submissions, ld. DR failed to controvert the correctness of these documents. I am therefore of the considered view that the impugned addition for unexplained cash deposit is uncalled for. Finding of ld.CIT(A) is reversed and addition of cash deposit at Rs.24,14,500/- is hereby deleted.
8. So far as the second issue for denying deduction u/s.80P of the Act is concerned, I observe that amendment u/s.80AC of the Act has been brought in from A.Y. 2018-19 making it mandatory for the Cooperative Societies to file return of income u/s.139(1) of the Act in order to claim deduction u/s.80P of the Act. Now prior to A.Y. 2018-19 in a situation where returns have not been filed but the assessee has carried out the activity of a Cooperative Society, this Tribunal has been taking a consistent view that such deduction deserves to be allowed if the conditions for claiming deduction u/s.80P of the Act are fulfilled. We take note of the decision of this Tribunal in the case of Rajya Rakhiv Police Karmachari Sahakari Patsanstha Maryadit Vs. ITO (supra) where similar issue has been decided in favour of the assessee allowing deduction u/s.80P of the Act and the finding of this Tribunal reads as under :
5 ITA No.2615/PUN/2025Takshashila Gramin Bigersheti Sahakari Patsanstha Limited "8. We have heard the rival contentions and perused the record placed before us. So far as the legal issue raised vide Ground No.1 in the grounds of appeal is concerned, we find that the reason for carrying out the re-assessment proceedings was regarding explanation about the source of cash deposit of Rs.35,00,821/-. It is noticed that assessee neither had PAN nor has filed any return of income for the year under consideration. It was only during the course of re-assessment proceedings that ld.
AO was able to examine the details in the form of Annual Report and Books of account. In the assessment order, ld. AO has nowhere doubted the source of alleged cash deposit which was from the Members of the society and therefore no addition was made on this account. Ld. AO has disallowed the deduction u/s.80P of the Act by applying section 80A(5) of the Act. Under these given facts, judgment of Hon'ble Jurisdictional High court in the case of Jet Airways (I) Ltd. (supra) comes to the rescue of the assessee wherein it was held that "if after issuing a notice under section 148, he (AO) accepted the contention of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income. If he intends to do so, a fresh notice under section 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee". Considering the judgment of Hon'ble Jurisdictional High Court, we find that in the instant case ld. AO has issued only one show cause notice u/s.148 along with the reasons to believe of the escapement of income with regard to unexplained cash deposit. During the course of assessment proceedings, ld. AO was satisfied with the source of cash deposit and therefore if he intended to make addition on some other ground he was required to issue a fresh show cause notice u/s.148. Since this exercise has not been carried out by the ld. AO the assessment order framed on 30.12.2019 is held to be bad in law and deserves to be quashed. Legal issue raised in Ground No.1 stands allowed.
9. Though we have dealt with the legal issue and have allowed the ground in favour of the assessee we still deem it proper to deal with merits of the case raised in Ground No.2 through which it has been contended that even if the assessee has not filed the return of income but since it has carried out the activity as a cooperative society which is duly registered under Maharashtra Cooperative Societies Act, 1960 and has maintained the details of Income and Expenditure Account during the year, the assessee is eligible for deduction u/s.80P(2)(a)(i) of the Act and that section 80A(5) of the Act is not applicable as it is applicable only in case return of income is filed. We observe that the assessee has referred and relied on the decision of Coordinate Bench, Bangalore in the case of Prathamika Krishi Pattina Sahakara Sangha Ltd. (supra) wherealso similar issue was there where the assessee did not file the return of income for A.Y. 2017- 18 and the deduction u/s.80P of the Act claimed subsequently 6 ITA No.2615/PUN/2025 Takshashila Gramin Bigersheti Sahakari Patsanstha Limited during the course of assessment proceedings was denied by the AO referring to section 80A(5) of the Act. Coordinate Bench after considering the judicial precedents held as under :
"7. I have heard the rival submissions. The learned Counsel for the assessee submitted that the provisions of section 80A(5) of the Act will come into play only when a return of income is filed by an assessee and the claim for deduction under Chapter VIA of the Act is not claimed in the said return. It was contended that since the assessee did not file return of income for Assessment Year 2017-18, there was no question of invoking the provision of section 80A(5) of the Act. His further submission was that section 80AC of the Act as it existed prior to its substitution by the Finance Act, 2018 w.e.f. 1-4-2018 reads as follows:
"80AC. Deduction not to bs allowed unless return furnished-Where in computing the total income of an assessee of the previous year relevant to the assessment year commencing on the 1st day of April, 2006 or any subsequent assessment year, any deduction is admissible under section 80-1A or section 80-1AB or section 80-IC or section 80-ID or section 80-IE, no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139."
He pointed out that the aforesaid provisions contemplate filing of return of income to claim deductions under certain provisions of Chapter VI "A" of the Act and 80P is not one of the section which is mentioned in section 80AC of the Act. He therefore submitted that the deduction under section 80P of the Act cannot be denied to the assessee for non filing of return of income. Learned DR, on the other hand, reiterated the stand of the Revenue as reflected in the order of the CIT(A).
8. I have given a careful consideration to the rival submissions. I agree with the submissions of the learned Counsel for the assessee that section 80A(5) of the Act is applicable only when a return of income is filed by an assessee and a deduction under Chapter VI "A" of the Act, is not claimed in such return of income. It will not apply to a case where no return of income is filed. The provisions of section 80AC of the Act, as we have already seen, contemplates denial of deduction in respect of certain provisions of Chapter VI "A" of the Act, if a return of income is not filed by an assessee. Those provisions, as rightly contended by the learned Counsel for the assessee, do not 7 ITA No.2615/PUN/2025 Takshashila Gramin Bigersheti Sahakari Patsanstha Limited apply to the claim for deduction under section 80P of the Act. Therefore, the Revenue authorities were not justified in not entertaining the claim of the assessee for deduction under section 80P of the Act as made by the assessee. Since neither the AO nor the CIT(A) have examined the other conditions for allowing deduction under section 80P of the Act, I deem it fit and proper to remand the issue of the assessee's eligibility to claim deduction under section 80P of the Act, in the sense with regard to the quantum of deduction and also with regard to the other conditions for allowing deduction under section 80P of the Act, for examining afresh by the AO. I therefore allow the appeal of the assessee for statistical purposes.
9. In the result, appeal of the assessee is treated as allowed for statistical purposes."
10. Similar issue was also taken by this Tribunal in the case of Sanchar Gramin Bigarsheti Sahakari Patsanstha Maryadit (supra). We therefore following the judicial precedents and taking consistent view are of the considered view that ld. AO erred to invoke section 80A(5) of the Act in the instant case and therefore assessee's claim of deduction u/s.80P of the Act deserves to be allowed as ld. AO has not disputed the carrying out of the activity of the cooperative society as per its objects coupled with all the necessary details and the quantum of income earned during the year. Thus, Ground No.2 raised by the assessee is allowed.
9. Following the same parity of reasoning, I hold that assessee society is entitled for deduction u/s.80P of the Act. Finding of ld.CIT(A) is set aside. Grounds of appeal raised by the assessee are allowed.
10. In the result, the appeal of the assessee is allowed.
Order pronounced on this 30th day of April, 2026.
Sd/-
(MANISH BORAD) ACCOUNTANT MEMBER पुणे / Pune; दिन ांक / Dated : 30th April, 2026. Satish 8 ITA No.2615/PUN/2025 Takshashila Gramin Bigersheti Sahakari Patsanstha Limited Satish Kumar Madishetty Digitally signed by Satish Kumar Madishetty Date: 2026.04.30 16:00:38 +05'30' आदे श की प्रतिलिपि अग्रेपिि / Copy of the Order forwarded to :
1. अपील र्थी / The Appellant.
2. प्रत्यर्थी / The Respondent.
3. The Pr. CIT concerned.
4. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, "SMC" बेंच, पण ु े / DR, ITAT, "SMC" Bench, Pune.
5. ग र्ड फ़ इल / Guard File.
आिे श नुस र / BY ORDER, // True Copy // Assistant Registrar, आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune.