SANTHOSH SUPER MARKET,CHENNAI vs. ACIT, NCC-7(4), CHENNAI

This appeal by the assessee is arising out of the order dated 11.11.2025, passed by the Learned Commissioner of Income Tax (Appeal), NFAC, Delhi (in short “ld.CIT(A)”) for the assessment year (A.Y) 2017-18 against the order u/s.147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961 (hereinafter the ‘Act’) passed by the Assessing Officer, NFAC (AO) dated 30.03.2022.

Brief facts of the case are that the assessee is a firm and carrying on the business of chain of Super Market dealing in household items, groceries etc for almost two decades. The assessee filed its return of income on 28.10.2017 for A.Y.2017-18, declaring total income of Rs.58,06,640/-. On verification of the ITR, the AO found that the assessee had shown total sales/turnover to the tune of Rs.40,92,47,157/-. Based on the information available on records with the department, the AO noticed that the assessee made cash deposits to the tune of Rs.137,63,77,632/- in its various bank accounts which are required to be brought under tax net. The case was re-opened u/s.147 of the Act and the Assessing Officer issued statutory notices to the assessee and called for details, but the assessee failed to respond to any of the notices. Since the assessee did not explain the excess of cash deposit more than turn over, the AO considered the excess of cash deposits to the tune of Rs.96,71,30,475/- as undisclosed income of the assessee. The AO made an addition of Rs.97,29,371/- (estimated percentage of 1% of excess deposit in bank over the turn over) by arriving at a total income of Rs.1,55,36,011/- for the A.Y 2017-18 and concluded the assessment proceedings by passing an order u/s.147 r.w.s 144 r.w.s 144B of the Act dated 30.03.2022.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC, Delhi on 21.09.2022.

At the outset, we observed that ld.CIT(A) has provided five opportunities for the assessee to appear for hearings from 02.08.2022 to 09.10.2025 as detailed in paragraph 4.2 of the ld.CIT(A) orders to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld. CIT(A) passed an order dated 11.04.2024 by confirming the order of the Assessing Officer.

The ld.AR submitted that the accountant of the assessee had not checked the income tax portal and its email ID during the relevant period and hence the assessee was not aware of the notices issued by the ld.CIT(A) and hence he could not appear and submit the valid evidence before the Assessing Officer as well as the ld.CIT(A). In view of the above, the ld.AR prayed to set aside the order of ld.CIT(A) and remit the issues to the file of Assessing Officer. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the AO to complete the assessment proceedings effectively.

Per contra, the ld.DR submitted that both the Assessing Officer and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).

We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed order by considering the information available with the department and the same has been dismissed by the ld.CIT(A), NFAC due to non-participation of the assessee.

Accordingly, in the interest of justice and fair play, we deem it appropriate to set aside the impugned order passed by the ld. CIT(A) and restore the matter to the file of the Assessing Officer for de novo adjudication. The Assessing Officer is directed to reframe the assessment in accordance with law after affording reasonable opportunity of being heard to the assessee and after considering such evidences and explanations as may be furnished. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so.

Before parting, we also observe that the ld. CIT(A), in paragraph 4.4 of the impugned order, has mentioned an incorrect figure of addition at Rs.97,29,37,115/-, whereas the actual addition made by the Assessing Officer was Rs.97,29,371/-. In view of the fact that the impugned appellate order itself is being set aside and the matter is remanded for fresh consideration, we deem it fit to point out this apparent mistake, which is found on the face of the record should be read as Rs.97,29,371/- instead of Rs.97,29,37,115/- to avoid confusion which will also go back to AO for denovo assessment.

In the result, the appeal filed by the assessee is allowed for statistical purposes.