SRI VENUGOPALA PRIMARY AGRICULTURAL COOPERATIVE CREDIT SOCIETY LIMITED,KAMARAJUPETA vs. ITO, WARD 2(1),, RAJAHMUNDRY

ITA 234/VIZ/2026Status: DisposedITAT Visakhapatnam17 July 2026AY 2020-216 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal before the CIT(A) in view of the medical certificates and the detailed affidavit of the Chartered Accountant explaining the reasons. The Tribunal noted that the CIT(A) had not adjudicated the merits of the appeal. Citing the decision of the Hon'ble Bombay High Court in PCIT vs. Premkumar Arjundas Luthra (HUF), the Tribunal held that the CIT(A) cannot dismiss an appeal for non-prosecution and must dispose of the grounds on merits under Section 250(6) of the Act. Consequently, the order of the CIT(A) was deemed incorrect. The Tribunal remitted the issues back to the file of the CIT(A) for adjudication on merits. However, considering the significant delay of over 400 days, the Tribunal imposed a cost of Rs.10,000/- on the assessee society, payable to the Andhra Pradesh State Legal Authority within one month. The issue regarding the eligibility for deduction under Section 80P was not decided on merits by the ITAT, as the matter was remanded.

What were the facts?

The assessee, Sri Venugopala Primary Agricultural Co-op. Credit Society Ltd., filed its return of income for Assessment Year 2020-21, declaring a gross total income of Rs.95.53 lakhs and claiming a deduction of the entire amount under Section 80P of the Income Tax Act, 1961. The Assessing Officer (AO) made an addition of Rs.95.53 lakhs, holding that interest income from deposits with Scheduled Banks and Co-operative Banks was "income from other sources" under Section 56 and not business income, thus disentitling the assessee to the Section 80P deduction. The assessee appealed to the CIT(A), but the appeal was filed with a delay of 446 days. The CIT(A) dismissed the appeal in-limine due to the delay, without adjudicating on the merits. The assessee then filed an appeal before the ITAT.

What were the issues?

1. Whether the CIT(A) erred in dismissing the appeal in-limine without adjudicating the grounds on merits, despite the delay in filing being attributable to the severe health issues of the assessee's Chartered Accountant and his wife. Assessee's Contention: The assessee argued that the delay was due to unavoidable medical reasons of their Chartered Accountant and his wife, supported by an affidavit and medical certificates. They sought a direction to the CIT(A) to condone the delay and decide the appeal on merits. Revenue's Contention: The Revenue opposed the appeal, arguing that the delay was inordinate and the explanation provided was bald, thus the appeal should be dismissed. 2. Whether the assessee society is entitled to deduction under Section 80P of the Income Tax Act, 1961, on its income from interest on deposits with Scheduled Banks and Co-operative Banks, considering its nature as a co-operative credit society engaged in providing credit facilities to its members and functioning on the principle of mutuality. Assessee's Contention: The assessee contended that as a co-operative credit society engaged in providing credit facilities to its members for over two decades and operating on the principle of mutuality, it is rightly entitled to the deduction under Section 80P. The AO's rejection of the claim was based on incorrect assumptions and without proper verification. Revenue's Contention: The Revenue argued that the income from interest on deposits with banks was income from other sources and not business income, hence not eligible for deduction under Section 80P.

Which sections of the Income-tax Act were involved?

Section 80P,Section 56,Section 143(3),Section 144B,Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH

Before: SHRI RAVISH SOOD, HON’BLE

PER OMKARESHWAR CHIDARA, AM:

In the above cited case, the assessee is a Co-operative Credit Society

registered with Andhra Pradesh Registrar of Co-operative Societies, engaged in ITA No.234 /VIZ/2026 Sri Venugopala Primary Agricultural- Co-op. Credit Society Ltd.,

the business of banking and providing credit facilities to its members only. The assessee filed a Return of Income declaring

The order continues below.

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