SRE THANIGAI AGENCIES,NAMAKKAL vs. INCOME TAX OFFICER, WARD 2, NAMAKKAL

This appeal by the assessee is arising out of the order dated 31.07.2025, passed by the Learned Commissioner of Income Tax (Appeal), Agra (in short “ld.CIT(A)”) for the assessment year (A.Y) 2017-18 against the order u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’) passed by the AO dated 25.11.2019.

Brief facts of the case are that the assessee is a partnership firm, engaged in the business of wholesale trade in poultry table eggs and has filed its return of income on 03.11.2017 for A.Y.2017-18, declaring total income of Rs.97,510/-. Subsequently, the case was selected for ‘Complete Scrutiny’ under CASS. The Assessing Officer issued statutory notices to the assessee and called for details. In response to the notice, the assessee submitted the reply along with cash book, details of cash deposits made during the demonetization period for consideration. On perusal of the reply and documents submitted by the assessee, the Assessing Officer found that the assessee made cash deposits to the tune of Rs.24,63,000/- into its bank account during the assessment year including the SBNs deposited to the tune of Rs.14,13,000/- during the demonetization period. The Assessing Officer is not convinced for the reason that the assessee’s case does not come under the exempted category to accept SBNs, as per Central Government Gazettee notification No.2652 dated 08.11.2016 and making an addition of Rs.14,13,000/- as unexplained cash deposits u/s.69A of the Act and concluded the assessment proceedings by passing an order u/s.143(3) of the Act dated 25.11.2019.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), Agra on 26.12.2019.

At the outset, we observed that ld.CIT(A) has provided opportunities for the assessee to appear for hearings as detailed in paragraph 3.1 of the ld.CIT(A) order to support the appeal of the assessee. In response to the last notice dated 20.06.2025, the assessee filed the written submission without attaching any evidence. Since, the assessee failed to submit any evidence to explain the source of the cash deposits during the appellate proceedings and hence, the ld.CIT(A) passed an order dated 31.07.2025 by confirming the order of the Assessing Officer.

The ld.AR submitted that the assessee filed the confirmation letters from collection agents as additional evidence, but the ld.CIT(A) has not considered the documents due to absence of specific details of the customers/debtors. Therefore, ld.AR prayed for one more opportunity to be provided to the assessee to represent its case before the ld.CIT(A) in the interest of natural justice. Further, the ld.AR assured the bench that he will undertake to represent on behalf of the assessee before the ld.CIT(A), in case one more opportunity is provided.

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 Assessing Officer has passed an order by making an addition for want of evidentiary documents in support of SBNs deposited and the same has been dismissed by the ld.CIT(A), due to the assessee failing to submit the any evidence with complete details of the persons from whom the SBNs collected and hence upheld the order of the Assessing Officer.

Therefore, in the present facts and circumstances of the case and to meet the ends of justice, we are deeming it fit to provide one more opportunity to the assessee and hence we set aside the order of the ld.CIT(A) and remit the matter back to the file to ld.CIT(A) to adjudicate the matter afresh in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.

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