M/S NANNIYODE SERVICE CO-OPERATIVE BANK LTD REPRESENTED BY ITS SECRETARY Vs. CENTRAL BOARD OF DIRECT TAXES

JUDGEMENT

(1.) The Co-operative Banks, who are the appellants herein, are before us against the judgment of the learned Single Judge, which modified the interim order in a first appeal under the Income Tax Act, 1961 [for brevity, the Act], directing payment of 20% of the demand made under Section 68 of the Act; dissatisfied with the conditional order having not been set aside in toto. At the first appellate stage, the Commissioner [Appeals] granted a stay on condition of payment of 50% of the amounts. The learned Single Judge reduced it to 20%. The Cooperative Banks are before us claiming impecunious circumstances and the possibility of close-down, if such huge amounts are directed to be paid.

(2.) The assessments were made after issuance of notice under Section 143 or Section 142 of the Act. The assessees/Co-operative Banks produced Audit Certificates but did not produce the details of the persons, who have made deposits with them. The Income Tax Officer, drawing adverse inference, treated the deposits as unexplained cash credits and assessed the same under Section 68 of the Act. The assessees filed appeal and then challenged the conditional order as stated above.

(3.) Before us also the learned Counsel appearing for the assessee's vigorously argued for a blanket stay and undertook that the entire details will be produced before the First Appellate Authority. It is pleaded that only due to ignorance, earlier the details were not furnished before the Assessing Officer. The First Appellate Authority, also being entitled to look into the facts, it is undertaken that the details would be furnished and in such circumstances, let there be a consideration of the appeal at the earliest; without any amounts being deposited.