NO.K.779.GURUVAREDDIYUR PRIMARY AGRI CO-OP CREDIT SOCIETY,ERODE vs. THE INCOME TAX OFFICER, WARD 2(1) ERODE, ERODE

आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee-Primary Agricultural Co- operative Credit Society against the order of the Learned Commissioner of Income Tax (Appeal)/NFAC, (hereinafter referred to as ‘Ld.CIT(A)’), Delhi, dated 11.08.2025 for the Assessment Year (hereinafter referred to as ‘AY’) 2019-20.

ITA No. 2777/Chny/2025 (AY 2019-20) No. K. 779. Guruvareddiyur Primary Agri Co-op Credit Society :: 2 :: 2. The main grievance of the assessee is against the action of the Ld.CIT(A) confirming the action of the AO making addition of Rs.58,08,566/- u/s.69A r.w.s. 115BBE of Income-Tax Act, 1961 (hereinafter referred to as ‘the Act’) and also denying the deduction u/s.80(P)(2) of the Act.

ITA No. 2777/Chny/2025 (AY 2019-20) No. K. 779. Guruvareddiyur Primary Agri Co-op Credit Society :: 3 :: of the Income Tax Rules, 1962 (hereinafter referred to as ‘the Rule’), wherein the assessee had filed the reconciliation statement of the cash deposit as follows : -

Date Available Cash Amount Closing Balance balance Deposited 25-05-2018 10,68,486.00 4,46,566.00 6,21,920.00

07-06-2018 8,41,560.85 2,90,000.00 5,51,560.85

17-12-2018 5,69,564.75 1,00,000.00 4,69,564.75

05-01-2019 14,84,763.75 4,00,000.00 10,84,763.75

14-01-2019 14,42,890.00 11,00,000.00 3,42,890.00

24-01-2019 15,72,094.25 10,00,000.00 5,72,094.25

04-02-2019 9,48,231.25 7,00,000.00 2,48,231.25

20-02-2019 6,12,594.75 4,00,000.00 2,12,594.75

28-02-2019 26,70,412.75 9,72,000.00 16,98,412.75

18-03-2019 8,29,088.00 4,00,000.00 4,29,088.00

Total 1,20,39,686.35 58,08,566.00 62,31,120.35

ITA No. 2777/Chny/2025 (AY 2019-20) No. K. 779. Guruvareddiyur Primary Agri Co-op Credit Society :: 4 :: its books of account. However, the Ld.CIT(A) wasn’t impressed, he confirmed the action of AO by making general observation as under :-

“In the light of the above facts and circumstances of the case, and on perusal of appellant various GOA as advanced against the assessment appeal of A.Y. 2019-20, it is noticeable that the appellant is contending the order of AO as bad in law in treating the entire cash credits as at Rs.58.08 lakhs as involving unexplained money u/s. 69A r.w.s.115BBE of I.T.Act without appreciating appellant facts of case involving a credit co-operative society and thereby contended such order of AO as bad in law. Further in these GOA, appellant is contending that AO erred in not treating the appellant ROI as filed u/s. 148 of I.T.Act as justifiable as appellant could not file such ROI u/s. 139(1) of I.T.Act due to non obtaining of audit report and thereby contended findings of AO as non filer as not justifiable. Further on the same analogy, the appellant contended that having filed for such condonation of delay for approval of CCIT, AO ought to have treated appellant as not a non filer as observed in assessment order to hold the entire cash deposits as involving unexplained money and thereby requested to delete the same as bad in law. Further in these GOA, appellant is contending that the replies were not provided to the AO owing to the difficulties of non availability of tax professional to the appellant and thereby further contended that in the absence of the same, AO ought not to have treated appellant as involving unexplained money as observed in the assessment order without appreciating appellant facts of case as involving an eligible credit co-operative society for claim of 80P deduction and thereby claims such order of AO as bad in law. Precisely, in all these GOA, appellant is contending the cash deposits as observed by AO as involving explainable transactions of credit co-operative society as took place during the year with its members as per the due procedure as involving receipts and thereby pleaded to treat the same as explainable and as having claim of 80P deduction to such receipts as per law. On this analogy, appellant pleaded to delete the addition as bad in law. In the light of these facts, on perusal of appellant various contentions/claims/GOA/submissions etc, it is noticeable that appellant is contending the entire cash deposits as involving explainable transactions of the appellant as took place amongst its members /appellant and as qualified by eligible deduction u/s, 80P of 1.T.Act. Accordingly, appellant further pleaded to treat the ROI as filed u/s. 148 as involving justifiable claim for deduction u/s. 80P of I.T.Act and thereby pleaded to delete the addition as made by AO as not maintainable However to further substantiate the same, apparently, appellant did not reconcile these cash deposits as assessed by AO as reconciliable with appellant receipts as admitted in the regular books of accounts as involving Tegular business transactions of the credit co- operative society/appellant through its members as contended so as to reconcile the same for its verification by AO as per law, In the absence of such substantiations without adducing relevant supporting proofs of each such transactions depicting the cash deposits as attributable to

ITA No. 2777/Chny/2025 (AY 2019-20) No. K. 779. Guruvareddiyur Primary Agri Co-op Credit Society :: 5 :: members receipts/payments etc as the case may be, apparently the cash deposit as observed by AO as at Rs.58.08 lakhs stands not reconciliable as the same are not substantiated with supporting workings /proofs etc as reconciliable with relevant ledger extracts as the case may be as applicable to appellant. Further appellant has adduced various citations as attributable to appellant facts of case and on perusal of the same, the relevant facts of case and ratios of adjudication as attributable to these citations is not apparently comparable to appellant facts of case and reasoning adduced by AO in the assessment order as appellant failed to reconcile such facts of case as applicable to appellant claim of credit co-operative society as only involved in transactions of society amongst its members with reconciliable books of accounts as claimed. Further appellant also could not bring out such comparable facts of case and ratios of adjudication as attributable to these citations as reconciliable to appellant facts of case/transactions and circumstances so as to claim its applicability as per law. In the absence of the same appellant various submissions as advanced as attributable to these citations is to be treated as not comparable and thereby same are treated as not acceptable. In the light of these facts, apparently there exists no infirmity in treating the entire cash deposits as involving unexplained money of the appellant as reasoned by AO in the assessment order and in the result appellant various GOA as advanced to hold the addition as not maintainable is to be treated as not maintainable. Accordingly, appellant appeal as filed against of assessment order u/s 147 r.w.s. 144 of I.T. Act for A.Y. 2019-20 is dismissed as not maintainable as per facts available on record on merits.” 6. Aggrieved by the aforesaid action of the Ld.CIT(A), the assessee is before us.

ITA No. 2777/Chny/2025 (AY 2019-20) No. K. 779. Guruvareddiyur Primary Agri Co-op Credit Society :: 6 :: Department. The assessee claims to be providing credit facilities only to its members and not to general public. Thus, assessee claims it is eligible for deduction u/s.80P in respect of the gross total income and claimed the same albeit in its return filed pursuant to the notice u/s 148 of the Act [ITR filed declaring Nil income claiming deduction u/s.80P of the Act to the tune of Rs.6,87,704/-] which was denied by the AO without giving any reason in the assessment order dated 26.11.2023 which action cannot be countenanced. It is noted that the assessee didn’t file its return of income within the period as per Section 139(1) of the Act. However, the assessee had produced before us the order passed by the Chief Commissioner of Income Tax (CCIT) Coimbatore dated 26.02.2025 condoning the delay for belated filing of the return of income u/s.139(1) of the Act (refer copy of the order dated 26.02.2025 passed by the CCIT Coimbatore in the case of assessee for AY.2019-20). Since the AO has passed the order denying the deduction claimed u/s.80P without passing the speaking order, we set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of AO for de nova action on the same in the light of the decision of the Ld.CCIT Coimbatore condoning the delay in filing of the return of income as noted (supra).

ITA No. 2777/Chny/2025 (AY 2019-20) No. K. 779. Guruvareddiyur Primary Agri Co-op Credit Society :: 7 :: According to the assessee, it being a credit society, predominantly working for the farmers, have deposited the amounts returned by the members who borrowed from it, fixed deposit receipt etc. According to the assessee it had to deposit excess cash with EDCC Bank on various accounts maintained with said bank, viz saving account, loan account, etc. The AO is noted to have drawn adverse view against the assessee because assessee didn’t participate during the assessment proceedings hence, he passed an ex parte order qua the assessee. On appeal, even though the assessee is noted to have filed additional evidences to substantiate the nature and source of the same and filed reconciliation statement for the cash deposit as under :-

Date Available Cash Amount Closing Balance balance Deposited 25-05-2018 10,68,486.00 4,46,566.00 6,21,920.00

07-06-2018 8,41,560.85 2,90,000.00 5,51,560.85

17-12-2018 5,69,564.75 1,00,000.00 4,69,564.75

05-01-2019 14,84,763.75 4,00,000.00 10,84,763.75

14-01-2019 14,42,890.00 11,00,000.00 3,42,890.00

24-01-2019 15,72,094.25 10,00,000.00 5,72,094.25

04-02-2019 9,48,231.25 7,00,000.00 2,48,231.25

ITA No. 2777/Chny/2025 (AY 2019-20) No. K. 779. Guruvareddiyur Primary Agri Co-op Credit Society :: 8 ::

20-02-2019 6,12,594.75 4,00,000.00 2,12,594.75

28-02-2019 26,70,412.75 9,72,000.00 16,98,412.75

18-03-2019 8,29,088.00 4,00,000.00 4,29,088.00

Total 1,20,39,686.35 58,08,566.00 62,31,120.35

Still, the Ld.CIT(A) was of the view that the assessee didn’t reconcile the cash deposit with assessee’s receipts as admitted in the regular books of accounts as involving regular business transactions through its members. We find that the Ld.CIT(A) has passed a general/common order for both AY.2019-20 and appeal for AY.2020-21 as well as appeal against imposition of penalty u/s.270A of the Act for AY.2020-21. We find that the Ld.CIT(A) has not adequately addresses the issues raised by assessee, and has merely rejected the reconciliation statement filed by the assessee without passing a speaking order and without spelling out how the reconciliation filed by the assessee is erroneous. Such an impugned action of the Ld.CIT(A) cannot be countenanced. Considering the overall facts supra, since the AO has passed an ex part order, we taking note that the assessee is an Primary Agricultural Co-operative Credit Society which undergoes statutory audit and is a regular assessee, for the interest of justice and fair play, set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of Assessing Officer (AO) for de

ITA No. 2777/Chny/2025 (AY 2019-20) No. K. 779. Guruvareddiyur Primary Agri Co-op Credit Society :: 9 :: nova assessment. The AO while framing assessment is at liberty to call for report from the verification unit in the field, and assessee is directed to file the relevant documents to substantiate the cash deposit in the EDCC Bank account before such a unit and the AO to pass assessment order after calling for report from the verification unit, in accordance to law after hearing the assessee.

Order pronounced on the 09th day of July, 2026, in Chennai.

Sd/- Sd/- (गगन गोयल) (एबी टी. वक�) (ABY T. VARKEY) (GAGAN GOYAL) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER चे�नई/Chennai, �दनांक/Dated: 09th July, 2026. YS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

Digitally signed YASHVI by YASHVIR SINGH R SINGH Date: 2026.07.20 15:47:22 +05'30'