" 1 आयकर अपीलीय अधिकरण, बेंगलुरू पीठें, बेंगलुरू INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCHES, BANGALORE BENCH: SMC BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT ITA 2214/Bang/2026 (निर्धारण वर्ा/Assessment Year : 2017-18) PRIMARY AGRICULTURE CREDIT CO-OPERATIVE SOCIETY ANEGUNDI VILLAGE AND POST, GANGAVTHI TALUK, KOPPAL DIST, KOPPAL – 583 227 Vs. INCOME TAX OFFICER WARD 1, AAYAKAR BHAVAN, SHIVA BELAGU BUILDING, 1ST FLOOR, BESIDE HUDCO COLONY, HOSPET, KOPPAL – 583 231. अपीलधर्थी Appellant प्रत्यर्थी Respondent Permanent Account Number of Assessee: AABAP9887A अपीलधर्थी द्वारा/Appellant represented by: Shri. Hanumanth Reddy, CA प्रत्यर्थी द्वारा/Respondent represented by: Sri. Ganesh R Ghale, Standing Counsel for the Dept सुनवाई की तारीख / Date of conclusion of hearing: 25-Aug-2026 घोषणा की तारीख / Date of pronouncement: 28-Sep-2026 आदेश / ORDER PER SHRI PRASHANT MAHARISHI, VICE PRESIDENT 1. The Assessee has filed this appeal against the order dated 3 May 2024 passed by the Commissioner of Income Tax (Appeals)-8, Delhi [learned CIT(A)] for assessment year 2017-18. By that order, the learned CIT(A) dismissed for non-prosecution the Assessee’s appeal against the order dated 25 December 2090 passed under section 144 of the Income- tax Act, 1961 (the Act) by the Income Tax Officer, Ward-1, Koppal, after the Assessee failed to respond on four occasions. Printed from counselvise.com ITA 2214/BANG/2026 PRIMARY AGRICULTURE CREDIT CO-OPERATIVE SOCIETY 2 2. The Assessee has raised the following grounds of appeal: 1. Ex-parte Order – Violation of Principles of Natural Justice: The Learned CIT(A) erred in passing an ex-parte order dated 03.05.2024 without affording the Appellant a proper and effective opportunity of being heard. The hearing notices were sent to the e-mail ID of the deceased Chartered Accountant (kvcxyz134@gmail.com), despite the Appellant having furnished the correct e-mail ID of the Co-operative Society’s Staff (mvguru28@gmail.com). As the former e-mail account was not accessible to the Appellant, dismissal of the appeal on the ground of non-prosecution is contrary to the settled principles of audi alteram partem. 2. Non-issuance of Notice u/s 143(2): The assessment order is invalid in law as no statutory notice under section 143(2) was issued pursuant to the return filed manually in response to the notice u/s 142(1). The absence of such notice vitiates the assessment proceedings and renders the order void ab initio. 3. Addition of Rs. 19,15,500/- U/s 68 r.w.s. 115BBE is Illegal and Unjustified: The Learned AO and CIT(A) erred in treating the demonetisation-period deposits of Rs.19,15,500/- as “unexplained cash credits” u/s 68, ignoring the nature of the Appellant’s business and the evidences placed on record. The addition is contrary to law, facts, and material evidence. 4. Erroneous Disallowance of Rs. 76,345/-: The learned AO erred in disallowing legitimate provisions and write-offs, comprising: 4.1. Audit fee provision Rs. 25,000/- - audit is a statutory requirement for co- operative societies and allowable u/s 37, irrespective of payment within the year. 4.2. Investment write-off Rs. 9,000/- - Provision for unrecoverable investments is allowed u/s. 37, and hence be allowed. Printed from counselvise.com ITA 2214/BANG/2026 PRIMARY AGRICULTURE CREDIT CO-OPERATIVE SOCIETY 3 4.3. Loans & advances write-off Rs.12,703/- – provision for unrecoverable loans & advances are allowed U/s.37, and hence be allowed. 4.4. Sundry debtors write-off Rs.29,642/- – provision for bad & doubtful debts represent non recoverable, hence, be allowed. 5. Non-consideration of Details Submitted: The Learned AO failed to consider the complete details, explanations, and evidences duly furnished by the Appellant during assessment proceedings. Such disregard of material evidence amounts to violation of natural justice and results in arbitrary assessment. 6. Difference in Bank Deposit Calculations: The Learned Assessing Officer has incorrectly computed the amount of deposits in the Appellant’s bank account, leading to a difference between the figures adopted by the AO and those actually reflected in the Appellant’s records. The discrepancy is factual in nature and requires proper reconciliation, failing which the addition made is arbitrary and unjustified. 7. General Ground The Appellant craves leave to add, alter, modify, delete or substitute any or all of the grounds and to file a paper book at the time of hearing the appeal. In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice and equity. 3. At the outset, the appeal is delayed by 665 days. Although the appellate order was received on 3 May 2024, the Assessee filed the appeal on 27 May 2026 together with an application for condonation of delay. The Assessee explained that the Chartered Accountant handling the matter died while the income-tax proceedings were pending, leaving the small rural co-operative society without professional assistance. It further submitted that the learned Printed from counselvise.com ITA 2214/BANG/2026 PRIMARY AGRICULTURE CREDIT CO-OPERATIVE SOCIETY 4 CIT(A) sent all notices to the former consultant’s email address, even though Form No. 35 contained the society’s current email address. After the consultant’s death, neither the Assessee nor its authorised representative could access the former account, and none of the four notices was therefore received. The Assessee stated that it became aware of the order dated 3 May 2024 only in May 2026, when its members were informed of demand and recovery proceedings and engaged a new consultant. On reviewing the income-tax e- filing portal, the consultant discovered the order and promptly filed this appeal. In support, the Assessee produced the Chartered Accountant’s death certificate, evidence that the notices had been sent to the old email address, and proof that the demand was communicated only in May 2026. Having regard to these circumstances, including the Assessee’s limited operations, the consultant’s death, service at the incorrect email address, and prompt action after learning of the order, we find sufficient and bona fide cause for the delay. After hearing both parties, we condone the delay of 665 days and admit the appeal. 4. Briefly, the Assessee carries on trading activities as a Primary Agricultural Credit Co- operative Society in Koppal District. It did not file a return of income for the relevant assessment year. After noting cash deposits of ₹9,015,500 in its bank account during the demonetisation period, the learned Assessing Officer issued a notice under section 142(1) of the Income-tax Act in March 2018, allowing 15 days for compliance. Following a change in the incumbent officer, another notice was issued and served on 12 July 2019. When the Assessee failed to comply, a proposal under section 144 of the Act was issued and served on 22 August 2019. A further notice under section 142(1), served on 27 August 2019, also drew no response. The learned Assessing Officer therefore issued another proposal under section 144 on 28 October 2019, to which the Assessee furnished certain details that day. Meanwhile, notices under section 133(6) were issued to various banks. The information received showed total cash deposits of ₹15,438,407 during financial year 2016–17 and ₹19,19,500 during the demonetisation period. The learned Assessing Officer added ₹1,915,500 under section 68 of the Act. Because no return had been filed, the loss of ₹19,870 was not permitted to be carried forward. Accordingly, by an assessment order dated 25 December 2019 passed under section 144 of the Act, the Assessee’s total income was assessed at ₹1,915,500. Printed from counselvise.com ITA 2214/BANG/2026 PRIMARY AGRICULTURE CREDIT CO-OPERATIVE SOCIETY 5 5. Aggrieved by the assessment order, the Assessee appealed to the learned CIT(A). As the Assessee failed to comply with four notices issued on different dates, the learned CIT(A) dismissed the appeal for non-prosecution. 6. Aggrieved by that decision, the Assessee is in appeal before us. We heard Shri Hanumanth Reddy, Chartered Accountant, on behalf of the Assessee. He filed two volumes of the paper book and one volume containing a compilation of case law. 7. For the Revenue, we heard learned Standing Counsel Shri Ganesh R. Ghale. 8. We have considered the rival submissions and examined the orders of the lower authorities. As the Assessee was not heard by either the learned Assessing Officer or the learned CIT(A), we restore the entire matter to the file of the learned Assessing Officer. The Assessee shall furnish the necessary details within 90 days of receiving this order. After examining those details, the learned Assessing Officer shall decide afresh whether the cash deposit of ₹1,919,500 made during the demonetisation period represented funds received from members of the co-operative society. If verification of the KYC details of those members supports the Assessee’s explanation, the addition shall be deleted. Otherwise, the learned Assessing Officer may decide the matter afresh after giving the Assessee an opportunity of being heard. 9. Accordingly, ground No. 1 is allowed. Since the matter has been restored to the file of the learned Assessing Officer, the remaining grounds have become infructuous and are dismissed. 10. In the result, the Assessee’s appeal is allowed for statistical purposes. Order pronounced in the open court on 28th September, 2026. Sd/- PRASHANT MAHARISHI VICE PRESIDENT Bangalore Dated: 28.09.2026 *TNTS* Printed from counselvise.com ITA 2214/BANG/2026 PRIMARY AGRICULTURE CREDIT CO-OPERATIVE SOCIETY 6 Copy to: 1 PRIMARY AGRICULTURE CREDIT CO-OPERATIVE SOCIETY ANEGUNDI VILLAGE AND POST, GANGAVTHI TALUK, KOPPAL DIST, KOPPAL – 583 227 2 INCOME TAX OFFICER WARD 1, AAYAKAR BHAVAN, SHIVA BELAGU BUILDING, 1ST FLOOR, BESIDE HUDCO COLONY, HOSPET, KOPPAL – 583 231. 3 THE PCIT / CIT, 4 THE CIT(APPEALS) 5 THE D.R., ITAT, BANGALORE BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T., BANGALORE Printed from counselvise.com "