TYSPL 123 ANBIL PRIMARY AGRICULTURAL COOPERATIVE CREDIT SOCIETY,TRICHY vs. INCOME TAX OFFICER,WARD 2(1) TRICHY/, TRICHY

I humbly submit that the learned Assessing Officer erred in making an addition of Rs. 3,13,11,850/- as unexplained money under Section 69A of the Income-tax Act, merely on the ground that the appellant failed to explain the cash deposits during the reassessment proceedings, without appreciating the true nature and regular business activities of the appellant co-operative society.

I humbly submit that the learned Assessing Officer failed to appreciate that the appellant society is engaged in collection of deposits from members, lending agricultural loans, operating Public Distribution System ration shops, and implementing Government welfare schemes, all of which necessarily involve substantial cash transactions that are duly recorded in the books of account.

I humbly submit that the appellant society has maintained a proper and complete Cash Book as part of its regular books of account, recording day-wise and member-wise cash transactions, which clearly evidences that the cash deposits represent repayments of loans, deposits from members, and receipts arising out of statutory activities, and therefore such deposits cannot be treated as unexplained under Section 69Amerely on account of technical or procedural failures in responding during the assessment proceedings.

I humbly submit that the learned Assessing Officer ignored the fact that under cooperative regulations, the appellant society cannot retain cash exceeding Rs. 15, 00,000/- at its premises, and therefore surplus cash collected from members and statutory activities was compulsorily deposited into bank accounts.

I humbly submit that the entire assessment as well as the appellate proceedings were concluded without any effective participation from the appellant, and no response could be furnished due to bonafide and unavoidable causes, and therefore the additions were made without considering the evidences available with the appellant, rendering the assessment and appellate order unsustainable in law.

I humbly submit that the learned CIT (A) erred in confirming the disallowance of deduction of Rs. 25, 96,426/- claimed under section BOP by invoking section 80AC solely on the ground that the return of income was not filed within the due date prescribed under section 139(1).

I humbly submit that the learned CIT(A) failed to appreciate that section 143(1)(a)(v), which enables prima facie adjustment for non-compliance with section 80AC, was inserted only by the Finance Act, 2021 with effect from Assessment Year 2021-22, and therefore cannot be applied retrospectively to the Assessment Year under appeal.

I humbly submit that the learned authorities erred in mechanically disallowing the deduction under section 80P for the year under consideration, when there was no statutory provision empowering automatic denial of such deduction merely on account of belated filing of return.

I humbly submit that the learned CIT (A) failed to appreciate that the return of income was filed pursuant to reassessment proceedings under section 148, and denial of a substantive and beneficial deduction under section 80P on purely technical grounds defeats the legislative intent and object of the provision.

I humbly submit that the learned CIT (A) failed to appreciate that the appellant is a Primary Agricultural Co-operative Credit Society registered under the Tamil Nadu Co-operative Societies Act, 1983, functioning under statutory supervision for the benefit of agriculturists and rural public, and therefore the issues involved warranted adjudication on merits rather than rejection on technical grounds.

I humbly submit that the impugned orders, having been passed without effective opportunity, without consideration of the appellant's books of account and evidences, and solely on technical and procedural grounds, are unsustainable in law and deserve to be set aside, with a direction to restore the matter to the file of the learned CIT (A) for fresh adjudication on merits after granting a fair opportunity of being heard.

The brief facts of the case are that the assessee Cooperative Society has not filed any return of income but deposited cash of Rs. 10 lakhs or more in Saving Bank Account amounting to Rs. 3,31,01,951/-. Based on the above information, a notice u/s. 148 of the Act was issued on 29.03.2023 in accordance with the amended provisions of section 148A of the Act. The assessee has filed return of income in response to notice issued u/s. 148 of the Act on 04.11.2023. Ultimately, the case of the assessee was assessed ex-parte after making additions of Rs. 3,31,01,951/-, on account of unexplained deposits u/s. 69A of the Act and Rs. 25,96,426/- on account of disallowance of deduction claimed u/s. 80P of the Act.

The assessee being aggrieved with the above preferred an appeal before the Ld. CIT (A) with a delay of 142 days. Again, the matter was not pursued by the assessee before the Ld. CIT (A) and delay in filing of appeal was also not explained to the satisfaction of the Ld. CIT (A), hence, he dismissed the appeal of the assessee and confirmed the order of the AO. The assessee being further aggrieved preferred an appeal before us in the present appeal along with application for stay of demand. It is observed that the appeal filed before us is also time barred by 8 days. As the matter pertains to a Cooperative Society and money of common citizen is involved, taking a lenient view and delay before us is condoned. Further, as the matter was never adjudicated on merits and as mentioned (supra). The assessee never turned up before the authorities below, on the request of the Ld. AR we are restoring the matter back to the file of the AO, subject to a cost of Rs. 10,000/- (Ten thousand only) to be deposited with Tamil Nadu State Legal Service Authority by the assessee within 30 days from the date of this order. The AO directed to frame the assessment de-novo, after giving proper opportunity of being heard to the assessee. As far as the issue pertaining to the claim of deduction u/s. 80P is concerned the AO is directed to follow the decision of the Hon’ble Jurisdictional High Court in the case of [2026] 187 taxmann.com 97 (Mad.) T943 Vickrapandiyam Primary Agricultural Co- operative Credit Society Ltd. v. CCIT. The assessee is directed to be vigilant enough this time and participate in the assessment proceedings actively without seeking any adjournment. In the result, the grounds raised by the assessee are allowed for