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Facts
The assessee, a co-operative society, claimed a deduction under Section 80P, which was rejected by the AO during processing under Section 143(1), leading to an increased income. The assessee filed an appeal before the CIT(A) with a significant delay of 1685 days, which the CIT(A) rejected solely on the grounds of limitation without considering the merits.
Held
The Tribunal acknowledged the delay but noted that a part of it was covered by the Supreme Court's order on COVID-19 related limitation extensions. Emphasizing that procedural delays, if explained, should not impede substantive justice, the Tribunal remanded the case back to the CIT(A) to reconsider the condonation of delay with a lenient approach and adjudicate the appeal afresh on merits after providing the assessee a proper hearing.
Key Issues
The key issue was whether the CIT(A) erred in rejecting the appeal solely on limitation grounds and if the delay in filing the appeal should be condoned for a de novo adjudication on merits.
Sections Cited
250, 143(1), 80P
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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI. ANIKESH BANERJEE & MISS. PADMAVATHY S
Per Shri Anikesh Banerjee (JM): The instant appeal of the assessee was filed against the order of the Learned Commissioner of Income-tax (Appeal) / Addl / JCIT(A)-2, Bangalore [(for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) for assessment year 2019-20, date of order 11/03/2025. The impugned order emanated from the order of the Central Processing Centre (CPC), Bengaluru (for brevity, the “Ld.AO”) passed u/s 143(1) of the Act, date of order 15/06/2020.
Ajinkyatara Sahkari Patsanstha Maryadit 2. We heard the rival submissions, considered the documents available on the record. The assessee is a co-operative society and registered under Maharashtra Co-operative Societies’ Act, 1960 and classified as ‘Resources Society’ u/s 12 of the Maharashtra Co-operative Societies’ Act, 1960. The assessee is providing credit facility to its members and also earned interest from the investment in co-operative banks. During the impugned assessment year, the assessee declared total income at Rs.6,71,670/- after claiming deduction of Rs.45,28,603/- u/ 80P of the Act. As a whole, the assessee’s income of Rs.52,00,274/- is derived from providing credit facility to its members and interest and dividend received from investment in co- operative bank. The Ld.AO, during processing of return rejected the claim u/s 80P of the Act and increased the total income to Rs.45,38,603/-. Aggrieved assessee filed an appeal before the Ld. CIT(A) with a delay of 1685 delays. The delay was duly explained before the Ld. CIT(A). But the Ld.CIT(A) rejected the appeal on the ground of limitation but not on merit. Being aggrieved, assessee filed an appeal before us.
The Ld.AR stated that the return was processed u/s 143(1) on dated 15/06/2020 and due to Covid Pandemic, the appeal is filing in delay before the Ld. CIT(A). The Ld. AR argued that part of the delay is due to the COVID Pandemic situation which is covered by the order of Hon’ble Supreme Court in the case of Cognizance for Extension of Limitation reported in (2022) 441 ITR 722 (SC) dated 10th January 2022. Further, the assessee has delayed in filing appeal and the reasons were duly explained before the CIT(A). Considering this, the Ld.AR prayed for setting aside the matter before the Ld. CIT(A) and prayed for condoning the delay in filing the appeal before the Ld.CIT(A).
Ajinkyatara Sahkari Patsanstha Maryadit 4. The Ld.DR argued, but related to condonation of delay, has not made any strong objection. The Ld.DR stands in favour of the order of the revenue authorities.
In our considered view, we find that the asessee’s return was processed u/s 143(1) of the Act dated 15/06/2020 and the appeal was filed on dated 25/02/2025. We find that the assessee has filed the appeal with a delay of 1685 days before the Ld. CIT(A). The delay in filing the appeal was duly explained by the assessee. The Part of the delay is covered by the order of Hon’ble Supreme Court in the case of Cognizance for Extension of Limitation reported in (2022) 441 ITR 722 (SC) dated 10th January 2022. The Ld. CIT(A) rejected the appeal on the technical ground of absence of sufficient cause for condonation of delay. Respectful reliance was placed on the judgment of the Hon’ble Gujarat High Court in the case of Rajendrakumar Maneklal Shah (HUF) vs CIT 213 ITR 715, which supports the proposition that procedural delays, when reasonably explained, should not defeat substantive justice. We restore the appeal to the file of the Ld. CIT(A) for denovo adjudication. Accordingly, we direct the assessee to submit the Affidavit before the Ld. CIT(A) by explaining the delay in filing appeal before 1st appellate authority. The Ld. CIT(A) is directed to reconsider the delay in lenient approach and to adjudicate the matter afresh by passing a reasoned and speaking order after affording an opportunity of hearing to the assessee. Needless to say, the assessee shall be granted a reasonable opportunity of being heard in the remanded proceedings. Simultaneously, the assessee is expected to act diligently and extend full cooperation to ensure expeditious disposal of the appeal.