INCOME TAX OFFICER , TRICHY vs. 939 THACHANKURICHI PRIMARY AGRICULTURAL CO-OPERATIVE CREDIT SOCIETY , TRICHY

आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the Revenue against the order of the Learned Commissioner of Income Tax (Appeal)/NFAC, (hereinafter referred to as ‘Ld.CIT(A)’), Delhi, dated 03.12.2025 for the Assessment Year (hereinafter referred to as ‘AY’) 2019-20.

ITA No. 152 /Chny/2026 (AY 2019-20) 939 Thachankurichi Primary Agricultural Cooperative Credit Society :: 2 :: 2. At the outset, the Ld.DR for the Revenue submitted that the Ld.CIT(A) erred in deleting the addition made by AO of Rs.2,26,09,587/- as unexplained money u/s.69A of the Income-Tax Act, 1961 (hereinafter referred to as ‘the Act’) without providing an opportunity to the AO violating Rule 46A of the Income-tax Rules, 1962 (hereinafter referred to as ‘Rules’). None appeared for the assessee despite notice issued to it. Hence, after going through the records we find that the AO reopened the assessment of the assessee for AY.2019-20 and noted that there was cash deposit of Rs.2,26,09,587/- made by assessee in The Tiruchirapalli District Central Cooperative Bank Ltd. Hence, he asked the assessee to prove the nature and source of the credit/debit in the said bank-account. According to the AO, the assessee didn’t respond to any of his notices which left him no alternative, but to make an addition of Rs.2,26,09,587/- u/s.69A of the Act.

ITA No. 152 /Chny/2026 (AY 2019-20) 939 Thachankurichi Primary Agricultural Cooperative Credit Society :: 3 :: serving rural farmers/consumers, where cash transactions are inherent due to nature of the small value loans, PDS sales, and agri-input sales. According to the Ld.CIT(A) considering the assessee’s profile, the explanation given by the assessee that the cash collected from the customers/consumers are for (i) loans repayments (ii) sale of PDS products, and (iii) sale of fertilizers seeds, and pesticides which is deposited into the society’s account with the ‘Triruchirapalli District Central Cooperative Bank Ltd.’ which explanation has to be accepted and cannot be held to be bogus/ilicit. The Ld.CIT(A) observed as under: -

“Here, the appellant’s uncontroverted operational narrative as a primary agricultural cooperative – routinely handling cash from micro-loans to farmers, PDS distributions, and agri-input sales – aligns seamlessly with the deposit quantum, as rural cooperatives characteristically operate in cash-dominant ecosystems unsupported by digital trails, a reality acknowledged in judicial precedents.” And citing few case laws, the Ld.CIT(A) has allowed the appeal.

ITA No. 152 /Chny/2026 (AY 2019-20) 939 Thachankurichi Primary Agricultural Cooperative Credit Society :: 4 :: in Form-35 and the grounds of appeal, without any material on record, has deleted the additions which action cannot be countenanced being perverse. Therefore, we set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of AO by de novo assessment. The assessee is directed to file the relevant documents to substantiate the nature and source of the cash deposits in the ‘Tiruchirapalli District Central Cooperative Bank Ltd’. And the AO to frame assessment in accordance to law after hearing the assessee.

Order pronounced on the 22nd day of June, 2026, in Chennai.

Sd/- Sd/- (इंटूरी रामा राव) (एबी टी. वक�) (INTURI RAMA RAO) (ABY T. VARKEY) लेखा सद�/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER चे�नई/Chennai, �दनांक/Dated: 22nd June, 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 YASHVIR Digitally signed by YASHVIR SINGH SINGH Date: 2026.07.07 12:33:35 +05'30'

ITA No. 152 /Chny/2026 (AY 2019-20) 939 Thachankurichi Primary Agricultural Cooperative Credit Society :: 5 ::