PEDNE TALUKA FARMERS SERVICE CO-OPERATIVE SOCIETY LTD,PEDNE vs. INCOME TAX OFFICER, WARD - 1(2), PANAJI

Registry has pointed out that the appeals of the assessee are time barred by 1038 days and 119 days. Assessee has filed affidavits explaining the reasons which led to delay in filing of the appeals before this Tribunal.

On due consideration of the reasons putforth by the assessee in the form of Affidavits, we find that the delay cannot be attributed either to deliberate inaction or to any lack of bona fides on the part of the assessee. The circumstances explained demonstrate that the default occurred due to reasons beyond the assessee's control and not on account of any negligence, or want of diligence. In our considered view, assessee has satisfactorily established the existence of "sufficient cause" for the delay in preferring the appeal before the First Appellate Authority. Adopting justice oriented approach and placing reliance on the judgments of Hon’ble Apex Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. reported in (1987) 2 SCC 107 and in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382), we condone the delay of 1038 days and 119 days respectively in filing of the appeals before this Tribunal and admit the appeals for adjudication.

We first deal with ITA No.199/PAN/2025. The main issue in this appeal is against the denial of deduction u/s.80P(2)(d) for the interest earned on investment/FDRs held with Cooperative banks as well as deduction for the commission income earned for providing the facility of collection of Water and Electricity bills.

At the outset, ld. Counsel for the assessee submitted that case of the assessee is squarely covered by plethora of decisions consistently holding that interest earned from Cooperative Banks as well as the commission income earned in providing the facility of collection of Water and Electricity bills is eligible for deduction u/s.80P(2)(d) and 80P(2)(a) of the Act. However, in absence of furnishing details and settled judicial precedents before ld.CIT(A), the assessee could partly succeed and therefore prayer made to afford one more opportunity for the limited purpose of adjudicating these issues raised in the instant appeal to which ld. Departmental Representative did not opposed.

We have heard the rival arguments made by both the sides and perused the record. We note that Cooperative societies earning interest income from the investments/FDRs held with Cooperative banks are eligible for deduction u/s.80P(2)(d) of the Act. This issue is no longer res integra. We quote the decision of Coordinate Bench, Panaji in the case of Goa P W D Staff Co Op Credit Society vs. Income Tax Officer in ITA No.107/PAN/2025 order dated 07.08.2025 where the very same issue has been decided in favour of the assessee allowing the interest income out of the investments held with Cooperative banks as deduction u/s.80P(2)(d) of the Act. Similarly, the commission income earned from providing the facility of collection of water and electricity bills also qualify for deduction u/s.80P(2)(a) of the Act. However, since the assessee could not get fair opportunity to place the judicial precedents in its favour before the lower authorities, we in the larger interest of justice and considering the prayer made by ld. Counsel for the assessee grant one more opportunity to the assessee and remit back the issues raised in the instant appeal to the file of ld. Jurisdictional Assessing Officer for necessary adjudication in light of settled judicial precedents and facts of the case to be placed by ld. Counsel for the assessee. Needless to mention that ld. JAO shall allow reasonable opportunity of hearing in such set aside proceedings. Impugned order of ld.CIT(A) is set aside and the grounds of appeal raised by the assessee are allowed for statistical purposes.

We now take up the ITA No.60/PAN/2026 which is against the levy of penalty u/s.270A of the Act. Since the very foundation of the penalty in the instant appeal upon the quantum addition made u/s.80P(2)(d) and 80P(2)(a) of the Act, which has been set aside by us to the file of ld. Jurisdictional Assessing Officer, the penalty levied u/s. 270A of the Act cannot be sustained at this stage. We, therefore, set aside the orders of the lower authorities. However, the Revenue shall be at liberty to take appropriate action, if so warranted, depending upon the outcome of the fresh adjudication in the quantum proceedings.

In the result, both the appeals of the assessee are allowed for statistical purposes.