G 855 THANDALAM PRIMARY AGRICULTURAL COOPERATIVE CREDIT SOCIETY,THANDALAM vs. ITO, WARD 22(1), TAMBARAM

आयकर अपील�य अ�धकरण, ‘ए’ �यायपीठ, चे�नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI �ी जॉज� जॉज� के, उपा�य� एवं �ी एस.आर.रघुनाथा, लेखा सद�य के सम� BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER

आयकर अपील सं./ITA No.:637/CHNY/2026 िनधा�रण वष�/Assessment Year: 2019-20 M/s. G855 Thandalam The Income Tax Officer, Primary Agricultural Vs. Ward-22(1), Cooperative Credit Society, Tambaram. 2/148, Road Street, Kanchipuram, Thandalam, Chennai – 600 128. PAN: AABAG 2654G (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/Appellant by : Shri B. Suresh, CA ��यथ� क� ओर से/Respondent by : Shri D. Balachandar, JCIT सुनवाई क� तारीख/Date of Hearing : 05.05.2026 घोषणा क� तारीख/Date of Pronouncement : 06.05.2026 आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 06.01.2026 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2019-20.

ITA No.637/CHNY/2026 :- 2 -: 2. Brief facts of the case are as follows: The assessee is a primary agricultural co-operative credit society. For the assessment year 2019-20, the assessee did not file its return of income. The assessment was completed u/s.147 r.w.s.144 r.w.s.144B of the Act on 25.02.2024 by assessing total income of Rs.8,49,60,897/- u/s.69A of the Act. The reason for making such addition was that assessee did not respond to the notices issued from the office of the AO and did not explain the source of credits in the bank accounts maintained by the assessee society.

ITA No.637/CHNY/2026 :- 3 -: therefore, not entitled for deduction u/s.80P of the Act. The relevant finding of the FAA reads as follows:- “6.1. It is an open and shut case. The appeal deserves to be dismissed, as assessee's plea of ignorance of formalities for compliance with mandatory provisions of the IT Act, 1961 cannot be an acceptable argument as the Hon'ble Supreme Court of India firmly upholds the principle of "ignorantia juris non excusat" (ignorance of law is no excuse). Moreover, the appellant has submitted additional evidence in the shape of so called audited balance sheet, etc. without furnishing any formal request which would have been subject matter of scrutiny within meaning of the Rule 46A(1) of the IT Rules, 1962. Hence, no heed can be paid to the same. So far as the appellant's claim for deduction under section 80P of the IT Act, 1961 is concerned, the onus was upon the appellant to prove its case by filing of Income-tax return within meaning of section 139(1) of the IT Act, 1961. The appellant has not only failed to comply with the mandate of law as noted above, but also the appellant has defied the notice under section 148 as well as notice under section 142(1) of the IT Act, 1961. The law will assist only those who are vigilant about their rights and not those who sleep over them as held by the Hon'ble Supreme Court of India in the case of Sagufa Ahmed v. Upper Assam Plywood Products (P) Ltd., (2021) 2 SCC 317. In view of above noted facts and circumstances of the case, the appellant's appeal is dismissed.”

ITA No.637/CHNY/2026 :- 4 -: the Rules. It was prayed that since the assessment proceeding is ex-parte, the issue may be restored to the files of the AO. In support of the assessee’s contention, the Ld.AR relied on the Co- ordinate Bench order of the Tribunal in the case of M/s. Veppur Milk Producers Co-op Society Ltd., TND 11887 vs. ITO (order dated 23.04.2025).

ITA No.637/CHNY/2026 :- 5 -: Rule 46A of the Rules. Further, taking note that the AO has also passed ex-parte order, the Tribunal restored the matter to the file of the AO. The relevant finding of the Co-ordinate Bench order of the Tribunal reads as follows:- “3. Further, it was brought to our notice that the AO had passed best judgment assessment u/s.144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘), since the assessee didn’t receive any notices which led to the AO passing the ex parte order adding the entire cash deposits in its Canara bank account. Being aggrieved by the action of the AO, the assessee preferred an appeal before the Ld.CIT(A), wherein, the assessee filed relevant evidences to prove the nature and source of cash deposits. However, the Ld.CIT(A) refused to admit the evidences on the specious plea that the assessee didn’t file any application under Rule 46A(1) of the of the Income Tax Rules, 1962 and thereafter, the Ld.CIT(A) confirmed the ex parte order of AO. We don’t countenance the action of the Ld.CIT(A). Undisputedly, the AO has passed ex parte order making addition of the entire cash deposit in the Canara bank to the tune of Rs.1,03,19,000/- since assessee didn’t respond to the notices issued by the AO on several dates. On appeal, it is noted that the assessee had filed the relevant evidences to substantiate the nature and source of the cash deposits. However, the Ld.CIT(A) has refused to admit the evidences merely on the ground that the assessee didn’t prefer/file any application for admission of evidences. Such an action of the Ld.CIT(A) can’t be accepted. It must be borne in mind that justice should not only be done, but it must be seem to be done. In this context, we take note of the Hon’ble Supreme Court decision in the case of United Bank of India v. Naresh Kumar AIR 1997 SC 3, wherein, it was observed by their Lordships “as far as possible, a substantive right should not be defeated on account of a procedural irregularity which is curable” and in the case of Associated Journals Ltd. v. Mysore Paper Mills Ltd., reported in [2006] 69 SCL 311 (SC), it was observed by the Hon’ble Supreme Court –

“… Rules of procedure cannot be a tool to circumvent the justice. In fact, the Rules are laid to help for speedy justice … Technical defects in petition are curable…..”.

ITA No.637/CHNY/2026 :- 6 -: 4. In Owners & Parties interested in MV Vali Perov. Fernandeo Lopez AIR 1989 SC 2206, it was observed - Rules of procedure are not by themselves an end but means to achieve the ends of justice. Rules of procedure are tools forged to achieve justice and are not hurdles to obstruct the pathway to justice. Construction of a rule of procedure which promotes justice and prevents its miscarriage by enabling the Court to do justice in myriad situations, all of which cannot be envisaged, acting within the limits of permissible construction, must be preferred to that which is rigid and negatives the cause of justice. Procedure is meant to subserve and not rule the cause of justice. Coming back to the case in hand, if the Ld.CIT(A) felt that the assessee had to file an application for admitting the additional evidences, he could have very well asked the assessee to file an application, and then the assessee certainly would have complied, by filing an application and thereafter, the Ld.CIT(A) could have decided the issue in accordance with Rule 46A and thereafter, proceeded to adjudicate the grounds of appeal raised by the assessee in accordance with sub-section (6) of section 250 of the Act. However, the Ld.CIT(A) didn’t bother to do so, therefore, the action of the Ld.CIT(A) can’t be sustained and therefore, we set aside the impugned order and taking note that the AO has also passed ex parte order qua assessee, we restore the assessment back to the file of the AO, since the AO is the primary authority to assess the income of the assessee, it would be in the interest of justice and fair play and as following the Hon’ble Supreme Court decision in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC), we direct the AO to frame fresh assessment after hearing the assessee. The Ld.AR undertakes to appear/file relevant evidences and written submissions before the AO to substantiate the nature and source of the cash deposits and respond to notices issued by the AO. Since there is negligence on the part of the assessee, cost of Rs.5,000/- is imposed, which the assessee should remit to the State Legal Aid Authority, Hon’ble Madras High Court, and produce necessary proof of depositing of the same before the AO and thereafter, the AO to frame the de novo assessment after hearing the assessee in accordance to law.”

ITA No.637/CHNY/2026 :- 7 -: thousand only) to be paid to Tamil Nadu State Legal Services Authority at the Hon’ble High Court of Madras. The amount of Rs.10,000/- shall be paid within a month’s time from the date of receipt of this order and assessee shall produce the receipt for the said payment before the AO. Accordingly, the matter is remitted to the files of the AO for fresh adjudication. The AO shall afford reasonable opportunity of hearing to the assessee. The assessee is directed to co-operate with the Revenue and furnish all requisite details and evidences in support of its claim and shall not seek unnecessary adjournment. It is ordered accordingly.

Order pronounced in the open court on 6th May, 2026 at Chennai.

Sd/- Sd/- (एस.आर. रघुनाथा) (जॉज� जॉज� के) (S.R. RAGHUNATHA) (GEORGE GEORGE K) उपा�य� /VICE PRESIDENT लेखा सद�य/ACCOUNTANT MEMBER चे�ई/Chennai, �दनांक/Dated, the 6th May, 2026 RSR, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त /CIT, Chennai 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF. By Order Digitally signed by REKHA REKHA SENTHIL RAJ SENTHIL RAJ Date: 2026.05.08 12:00:23 +05'30'