In a recent ruling, the Karnataka High Court set aside the assessment order and penalty notices due to the assessing officer’s unwarranted doubts about the genuineness of the transaction, ignoring the society’s submissions.
Shivakumaraswamy Credit Co-operative Society Ltd., the petitioner challenges various notices and orders issued by the Income Tax Department related to the assessment year 2016-17.
The petitioner’s counsel argued that they had submitted a written reply on January 24, 2024, along with relevant documents, including a cash flow chart, bank book, and cash book, to explain the source of cash deposits.
The petitioner’s counsel argued that the AO failed to consider the evidence and questioned the genuineness of transactions and the creditworthiness of its members without proper grounds despite the submissions of a cash flow chart, bank book, and cash book, to explain the source of cash deposits.
The petitioner’s counsel prayed that it would be able to demonstrate the genuineness of the transactions if given a proper opportunity.
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Justice S Sunil Dutt Yadav noted that the petitioner had produced documents to explain the cash deposits, and the Assessing Officer questioned their genuineness. The court decided that it would be appropriate to remand the matter to the Assessing Officer and allowed the petitioner to demonstrate the genuineness of the transactions, including the identity and creditworthiness of the members.
Therefore, the court set aside the assessment orders and penalty notices related to the assessment, and the matter was returned to the stage of reply to the notice under Section 148-A(b) of the Income Tax Act.
All contentions were kept open for reconsideration. The petition of the petitioner was disposed of.
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