AA 354 IRUTTIPALAYAM PRIMARY AGRICULTURAL COOPERATIVE CREDITSOCIETY LIMITED,ERODE vs. THE INCOME TAX OFFICER, WARD 2(1), ERODE

आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: These appeals filed by the assessee are directed against the orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi both dated 21.04.2026

- 2 - ITA Nos.2963 & 3535/CHNY/2026 AA354 Iruttipalayam PACCS passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2016-17.

ITA No.3535/CHNY/2026 3. At the very outset, we notice that the First Appellate Authority (FAA) dismissed the assessee's appeal in limine without adjudicating the issues on merits. The FAA observed that there was a delay of 865 days in filing the appeal. The reason stated by the assessee in Form No.35 for the delay was that there was a change of auditor for the society and the relieving auditor was not available to hand over the records. The FAA held that the explanation was not acceptable and did not constitute sufficient cause for condoning the inordinate delay of 865 days. Accordingly, the FAA declined to condone the delay and dismissed the appeal in limine.

- 3 - ITA Nos.2963 & 3535/CHNY/2026 AA354 Iruttipalayam PACCS 4. Aggrieved by the order of the FAA, the assessee is in appeal before the Tribunal. The Ld. AR submitted that the FAA dismissed the appeal in limine without considering the petition for condonation of delay and the supporting affidavit filed by the assessee. Though only a brief reason was mentioned in Form No.35, the assessee had explained the reasons for the delay in detail in the petition and affidavit filed before the FAA. The Ld. AR submitted that reason stated in the condonation petition / affidavit is that the assessee is a Primary Agricultural Co-operative Credit Society registered under the Tamil Nadu Co-operative Societies Act, 1983 and does not have an in-house qualified accountant or tax professional to handle income-tax matters. The society is managed by administrative personnel who are not conversant with income-tax laws, e-assessment procedures or e-filing of appeals and, therefore, is dependent upon external auditors and tax consultants. During the relevant period, there was a change of auditor and the earlier auditor was not available to hand over the records and documents to the newly appointed auditor. Consequently, the new auditor could not examine the assessment order and initiate the appellate proceedings within the prescribed time.

- 4 - ITA Nos.2963 & 3535/CHNY/2026 AA354 Iruttipalayam PACCS 5. The Ld. AR further submitted that the assessee society has also filed an affidavit before the Tribunal explaining that the society is situated in a remote hill village in the Kadambur Hills, within the buffer zone of the Sathyamangalam Tiger Reserve, Erode, and is managed by local administrative personnel having no specialized knowledge of income-tax procedures or digital compliance systems. It was further submitted that the e-mail ID registered on the Income-tax portal belonged to the erstwhile auditor and, therefore, the assessee remained unaware of the notices issued under sections 148 and 142(1) of the Act, the show-cause notices and the assessment order. The assessee came to know of the assessment only when contacted by the Jurisdictional AO during the recovery proceedings. Thereafter, the assessee engaged a new auditor, updated the e-mail ID on the Income-tax portal, and filed the appeal. The Ld. AR further submitted that the assessment order passed by the AO u/s.147 of the Act was also an ex-parte order, as the assessee was unaware of the statutory notices issued during the assessment proceedings. She, therefore, contended that the assessee was prevented by sufficient cause from filing the appeal within the prescribed time and that the delay was neither wilful nor deliberate. Accordingly, she prayed that the delay in filing the appeal before the FAA be

- 5 - ITA Nos.2963 & 3535/CHNY/2026 AA354 Iruttipalayam PACCS condoned and the matter be restored to the file of the AO by providing one more opportunity to the assessee to present its case. The Ld.AR undertook that she would duly appear and furnish the necessary details as and when called for.

- 6 - ITA Nos.2963 & 3535/CHNY/2026 AA354 Iruttipalayam PACCS the e-mail ID of the erstwhile auditor being registered on the Income-tax portal, we are satisfied that the assessee was prevented by sufficient cause from filing the appeal within the prescribed time. Accordingly, we condone the delay of 865 days in filing the appeal before the FAA.

ITA Nos.2963/CHNY/2026 9. The assessee has filed this appeal against the appellate order confirming the penalty levied u/s.271(1)(c) of the Act, by the AO. Since, we have already set aside the quantum appeal in ITA No.3535/CHNY/2026 to the files of the AO for denovo

- 7 - ITA Nos.2963 & 3535/CHNY/2026 AA354 Iruttipalayam PACCS adjudication, we deem it appropriate to set aside the impugned penalty order also to the files of the AO to decide along with the corresponding quantum appeal in accordance with law. It is ordered accordingly.

Order pronounced in the open court on 3rd August, 2026 at Chennai.

Sd/- Sd/- (प�मावती एस) (जॉज� जॉज� के) (PADMAVATHY S) (GEORGE GEORGE K) लेखा सद�य/ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT चे�नई/Chennai, �दनांक/Dated, the 3rd August, 2026 RSR, Sr.PS

आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त /CIT, Coimbatore 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF. By Order Digitally signed by REKHA REKHA SENTHIL RAJ SENTHIL RAJ Date: 2026.08.05 09:50:05 +05'30'