K 1653 MUTHUGOUNDENPUDUR PRIMARY AGRICULTURAL CO-OP CREDIT SOCIETY,COIMBATORE vs. INCOME TAX OFFICER, NON CORP WARD 4(1), CBE, COIMBATORE

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ITA 3971/CHNY/2025Status: DisposedITAT Chennai09 July 2026AY 2018-20198 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal dismissed the ground related to the disallowance of Section 80P deduction, as the assessee failed to prove timely filing of the return. However, for the addition of unexplained cash deposits, the Tribunal restored the issue to the AO to provide an opportunity to the assessee to produce its books of account.

What were the facts?

The assessee, a Primary Agricultural Co-operative Credit Society, had large cash deposits in its bank account. The Assessing Officer (AO) reopened the assessment and made an addition for unexplained cash deposits and disallowed a deduction claimed under Section 80P for not filing the return within the due date.

What were the issues?

Whether the addition for unexplained cash deposits is justified without providing sufficient opportunity to the assessee, and whether the disallowance of Section 80P deduction is valid due to delayed filing of the return.

Which sections of the Income-tax Act were involved?

Section 69A,Section 80P,Section 139(1),Section 80AC,Section 115BBE,Section 119(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & SHRI S.R. RAGHUNATHA

Hearing: 04.06.2026Pronounced: 09.07.2026

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 (PACCS) against the order of the Learned Commissioner of Income Tax (Appeal)/NFAC, (hereinafter referred to as

ITA No.3971/Chny/2025 (AY 2018-19) K 1653 Muthugoundenpudur Primary Agricutural, Co-op Credit Society :: 2 :: ‘Ld.CIT(A)’), Delhi, dated 28.10.2025 for the Assessment Year (hereinafter referred to as ‘AY’) 2018-19.

2.

Main grievance of the assessee against the action of the Ld.CIT(A) confirming (i) the addition of Rs.1,05,70,777/- u/s.69A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) (ii) disallowance of deduction of Rs.7,63,543/- claimed u/s.80P of the Act.

3.

Brief facts are that the AO on information that there was cash deposit of Rs.1,11,74,731/- in the bank account of the assessee issued notice and reopened an assessment for AY.2018-19 u/s.148 of the Act on 01.04.2022 pursuant to which the assessee filed return of income on 01.06.2022 declaring total income as ‘Nil’ after claiming deduction Rs.7,63,543/- u/s.80P of the Act. The AO is noted to have issued notices calling for nature and source of the cash deposits. The assessee pursuant to which has replied that it has collected the cash deposit details and has reconciled with the bank statement, however, the cash book as directed by the AO could not be uploaded since it is running more than thousand pages. The assessee is noted to have informed the AO that (it is a Primary Agricultural Co-operative Credit Society) under the Tamil Nadu Societies Act, 1983 and its main activity is to provide gold and agricultural loan, accept fix and deposit from member and supply ration items to the public by subsidized cost as fixed by the Government. However, the AO is

ITA No.3971/Chny/2025 (AY 2018-19) K 1653 Muthugoundenpudur Primary Agricutural, Co-op Credit Society :: 3 :: noted to have asked for the bank book along with the cash book for F.y.2016-17 and 2017-18 of all entries with clear information for each debit and credit entries. The assessee didn’t respond, hence the AO has drawn adverse inference against the assessee and held the cash deposits to be unexplained money and made addition u/s.69A r.w.s. 115BBE of the Act and added the same. The AO is also noted that the assessee didn’t file its return of income as per Section 139(1) of the Act and that assessee has filed the return only after receipt of notice u/s.148 of the Act. The assessee filed the return of income only on 01.06.2022 and claimed deduction at Rs.7,63,543/- u/s.80P of the Act, thereby, reporting ‘Nil’ income. The AO taking note of the amendment brought in by Finance Act, 2018 in Section 80AC wherein, certain deductions were made not allowable unless return of income was furnished as per Section 139(1) of the Act. Thereafter, the AO is noted to have disallowed the deduction claimed u/s.80P to the tune of Rs.7,63,543/-. Thus, the AO determined the total income of Rs.1,13,33,620/- (Rs.1,05,70,077 PLUS Rs.7,63,543/-).

4.

Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) who was pleased to confirm the same.

5.

Aggrieved the assessee is before us.

ITA No.3971/Chny/2025 (AY 2018-19) K 1653 Muthugoundenpudur Primary Agricutural, Co-op Credit Society :: 4 :: 6. We have heard both the parties and perused the records. It is noted that the assessee-Primary Agricultural Co-operative Credit Society registered under the Tamil Nadu Registration Act, 1983. The assessee- society is noted to accept deposits from its members grants, crops, jewels, and fertilizers loans, operates public distribution shops and disburses Government welfare funds. The assessee didn’t file its return of income u/s.139(1) of the Act. The AO received information that there was cash deposit of more than Rs.1 crore made in the bank account of the assessee during the relevant assessment year. Hence, the AO reopened the assessment by issuing notices u/s.148 of the Act 01.04.2022. And pursuant to which, the assessee filed return on 01.06.2022 declaring ‘Nil’ return of income (claiming deduction u/s.80P to the tune of Rs.7,63,543/- ). The AO is noted to have disallowed the claim since assessee didn’t file the return of income u/s.139(1) of the Act by taking notice of the Amendment made in Section 80AC by Financial Act, 2018 w.e.f. 01.04.2018 i.e. from AY.2018-19 onwards. As per the Amendment brought in no deduction under any provision of Chapter VI-A under the heading “C - Deductions in respect of certain income” (which includes Section 80P) is allowable unless the return of income is furnished within the due date u/s.139(1) of the Act. As per the AO/Ld.CIT(A) for AY 2018- 19 onwards, timely filing of return u/s.139(1) of the Act is precondition for claiming deduction u/s.80P and hence they disallowed the claim of the

ITA No.3971/Chny/2025 (AY 2018-19) K 1653 Muthugoundenpudur Primary Agricutural, Co-op Credit Society :: 5 :: assessee and confirmed the disallowance of Rs.7,63,543/-. Before us the assessee couldn’t show that return of income was furnished within the due date u/s.139(1) of the Act. The assessee also could not place on record that the competent authority has condoned the delay in filing of the return of income u/s.119(2) of the Act. In such a scenario, we do not find any infirmity in the action of the Ld.CIT(A) confirming the action of the AO disallowing Rs.7,63,543/- hence, we dismiss the ground of appeal of the assessee.

7.

Coming to the ground assailing the addition of Rs.1,05,70,077/- in two (2) bank accounts, Coimbatore District Central Cooperative Bank, it is noted that the assessee is a Primary Agricultural Co-operative Credit Society registered under the Tamil Nadu Registration Act, 1983. The AO has noted supra asked the assessee to prove the nature and source of cash deposit aggregating to Rs.1,05,70,007/- and the assessee is noted to have replied that cash deposits are related to the operation of the society and its mainly the loans returned by the members (crop, jewel and fertilizer loans) as well as its business of operative public distribution shops, etc. The assessee also brought to the notice of the AO that it has the details of cash deposits, and it has reconciled them with the bank statement. According to the assessee, the cash book is running more than thousand pages and hence was unable to upload the same since the system was not accepting it being beyond prescribed limits. The assessee

ITA No.3971/Chny/2025 (AY 2018-19) K 1653 Muthugoundenpudur Primary Agricutural, Co-op Credit Society :: 6 :: is noted to have uploaded few pages of the cash book which according to the AO was not sufficient for determining the nature and source of the cash deposit. Finding that the assessee didn’t give the details called for by him, the AO rejected the books and made an addition of Rs.1,05,70,077/- u/s.69A of the Act. On appeal the Ld.CIT(A) has confirmed the action of the AO.

8.

We find that the assessee is a Primary Agricultural Co-operative Credit Society deposited cash of Rs.1,11,74,731/- in the bank account of the assessee on information the AO issued notice and reopened an assessment for AY.2018-19 u/s.148 of the Act on 01.04.2022 pursuant to which the assessee filed return of income on 01.06.2022 declaring total income as ‘Nil’ after claiming deduction Rs.7,63,543/- u/s.80P of the Act. When asked by the AO to prove the nature and source of the cash deposits assessee has brought to his notice that the nature and source of the same was from its operational activities (loan repaid by the members after taking jewel/crop loans and public distribution shops, etc.) When asked by the AO to produce the cash book and bank statement the assessee has brought to the notice of the AO that the cash book was running more than thousand pages and the system is not able to upload it. The AO insisted on the assessee to produce the cash book. Failure of the same resulted in the AO rejecting the books and making the addition u/s.69A as unexplained money. In this regard, Ld.AR pleaded that the

ITA No.3971/Chny/2025 (AY 2018-19) K 1653 Muthugoundenpudur Primary Agricutural, Co-op Credit Society :: 7 :: assessee given an opportunity will produce the cash book and give all the details regarding the cash deposits made. Considering the fact that the assessee is a Primary Agricultural Co-operative Credit Society working for the welfare of the farmer community, and the assessee having explained the nature and source of the same as from its operations as noted (supra) and considering the fact that the assessee could not upload the cash book due to the large size of file, for the ends of justice and fair play we are inclined to grant an opportunity to the assessee to produce the books including the cash book before the AO. Considering the peculiar facts of the case we set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of Jurisdictional Assessing Officer (JAO) and direct him to frame the assessment qua the issue of cash deposit only. The assessee is directed to furnish the books of account including cash book and other details to prove the nature and source of the cash deposit and the AO to frame assessment after hearing the assessee.

9.

In the result, appeal filed by the assessee is partly allowed.

Order pronounced on the 09th day of July, 2026, in Chennai. Sd/- Sd/- (एस. आर. रघुनाथा) (एबी टी. वक�) (S.R.RAGHUNATHA) (ABY T. VARKEY) लेखा सद�/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER चे�नई/Chennai, �दनांक/Dated: 09th July, 2026. YS

YASHVIR Digitally signed by YASHVIR SINGH SINGH Date: 2026.07.20 15:50:14 +05'30'

ITA No.3971/Chny/2025 (AY 2018-19) K 1653 Muthugoundenpudur Primary Agricutural, Co-op Credit Society :: 8 :: 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

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