SANTHOSH SUPER MARKET,CHENNAI vs. ACIT, NON CORP. CIRCLE-7(1), CHENNAI

आदेश / O R D E R

PER MANU KUMAR GIRI, JM:

The captioned online appeal filed by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi, [CIT(A)] dated 04.02.206 for Assessment Year 2017- 18. 2. Brief facts of the case: The assessee is a partnership firm engaged in the business of running a chain of supermarkets dealing in household items, groceries and other consumer products for

ITA No 1318/Chny/2026 (AY 2017-18) Santosh Super Market Vs ACIT, C 7(1) :: 2 :: nearly two decades. For the assessment year under consideration, the assessee filed its return of income declaring a total income of Rs.58,06,640/-. The total turnover reported by the assessee for the relevant previous year was Rs.40,92,47,157/-. During the course of assessment proceedings, the Assessing Officer noticed that the assessee had deposited cash aggregating to Rs.137,63,77,632/- in its bank accounts. On examination of the cash deposits made during the demonetization period from 09.11.2016 to 30.12.2016, the Assessing Officer called upon the assessee to explain the source of the deposits, particularly those made in Specified Bank Notes (SBNs). According to the Assessing Officer, the assessee failed to satisfactorily substantiate the source of certain deposits made during the demonetization period. Consequently, an amount of Rs.1,36,52,590/- was treated as unexplained money under section 69A of the Income-tax Act, 1961 and added to the total income. The assessment was accordingly completed determining the total income at Rs.1,55,36,011/-. 3. Aggrieved by the assessment order, the assessee preferred an appeal before the learned Commissioner of Income Tax (Appeals). The assessee, inter alia, challenged the validity of the assessment proceedings on the ground that adequate opportunity of hearing had not been afforded and also contested the addition made under section 69A of the Act. The learned CIT(A), vide order dated 04.02.2026, dismissed the appeal on account of non-prosecution and failure of the assessee to furnish cogent documentary evidence in support of its contentions. Consequently, the additions made by the Assessing Officer were sustained.

ITA No 1318/Chny/2026 (AY 2017-18) Santosh Super Market Vs ACIT, C 7(1) :: 3 :: 4. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before this Tribunal. The learned Authorised Representative submitted that the learned CIT(A) failed to adjudicate the issues raised in the appeal on merits and passed the impugned order ex parte without affording an effective and reasonable opportunity of hearing. It was further submitted that the assessee is engaged in a high-volume retail business involving substantial cash sales and possesses books of account, stock records, sales registers and other supporting materials to explain the cash deposits. Therefore, one more opportunity may be granted to place the relevant records before the authorities. 5. Per contra, the learned Departmental Representative supported the orders of the lower authorities and prayed for dismissal of the appeal. 6. We have heard the rival submissions and perused the material available on record. It is evident from the records that the appeal before the learned CIT(A) was dismissed primarily for non- prosecution and without a detailed adjudication of the issues on merits. We further note that the addition under section 69A of the Act pertains to cash deposits made during the demonetization period and the determination of the issue requires examination of books of account, cash book, sales records, stock details and other contemporaneous evidences maintained by the assessee in the ordinary course of its business. Since the impugned addition involves verification of primary facts and examination of documentary evidence at the assessment stage, we are of the considered view that the matter requires fresh consideration by the Assessing Officer. In our opinion, the ends of justice would be met by granting one final opportunity to the assessee to substantiate its

ITA No 1318/Chny/2026 (AY 2017-18) Santosh Super Market Vs ACIT, C 7(1) :: 4 :: claim and explain the source of the impugned cash deposits. Accordingly, in the interest of substantial justice, we set aside the orders of the lower authorities and restore the entire matter to the file of the Assessing Officer for de novo adjudication. The Assessing Officer shall examine the books of account, cash flow statements, sales records, stock registers and all other evidences that may be furnished by the assessee and thereafter pass a speaking order in accordance with law after affording adequate opportunity of being heard. The assessee is directed to extend full cooperation in the assessment proceedings and furnish all details and documentary evidence as may be called for by the Assessing Officer. Failure to do so shall entitle the Assessing Officer to decide the matter on the basis of material available on record and in accordance with law. 7. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on the 01st day of June, 2026 in Chennai.

Sd/- Sd/- (प�ावती एस) (मनु कुमार िग#र) (PADMAVATHY S) (MANU KUMAR GIRI) लेखा सद$या/ACCOUNTANT MEMBER %या�यक सद$य/JUDICIAL MEMBER

चे%नई/Chennai, 'दनांक/Dated: 01st June, 2026. SNDP, Sr. PS

आदेश क� ��त(ल)प अ*े)षत/Copy to:

ITA No 1318/Chny/2026 (AY 2017-18) Santosh Super Market Vs ACIT, C 7(1) :: 5 :: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF