SHRI BASAVESHWAR CO-OPERATIVE CREDIT SOCIETY LIMITED ,SIRSI vs. INCOME TAX OFFICER, WARD-1, SIRSI

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ITA 2668/BANG/2025Status: DisposedITAT Bangalore08 July 2026AY 2018-195 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in dismissing the appeal due to delay, as the period of limitation was extended by the Supreme Court's directions during the COVID-19 pandemic. The matter was restored to the CIT(A) for adjudication on merits.

What were the facts?

The assessee, a cooperative society, claimed deduction under Section 80P. The AO disallowed a portion of the deduction for business with associate and nominal members. The assessee's appeal before the CIT(A) was dismissed in limine due to a delay.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal on grounds of limitation, considering the Supreme Court's directions on extension of limitation during the COVID-19 period.

Which sections of the Income-tax Act were involved?

Section 80P,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, BANGALORE

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

For Appellant: Shri Raghavendra Patre, CA
For Respondent: Shri Ganesh R Ghale, Standing Counsel for the Dept
Hearing: 04.06.2026Pronounced: 08.07.2026

PER WASEEM AHMED, ACCOUNTANT MEMBER:

This is an appeal filed by the assessee against the order passed by the Ld. CIT(A) u/s 250 of the Act vide order dated 10/09/2025 for the asst. year 2018-19.

ITA No.2668/Bang/2025 Page 2 of 5 2. The only issue raised by the assessee in its ground of appeal is that the learned CIT(A) erred in confirming the disallowances of deduction u/s 80P(2)(a)(i) of the Act for Rs. 25,64,060/- by holding income attributable to the business with associate and nominal members.

3.

The facts in brief are that the assessee is a cooperative society. For the year under consideration relevant to A.Y. 2018-19, the assessee filed its return of income claiming deduction u/s 80P(2)(a)(i) of the Act for Rs. 54,61,661/-. The case of the assessee was selected for limited scrutiny. During the assessment, the AO observed that the assessee has 3 types of members, viz regular members, associate members, and nominal members. The AO noted that the business carried on with the nominal and associate members violates the doctrine of mutuality. Hence, the AO held that the income attributable to business with the nominal and associate members is not eligible for deduction under section 80P of the Act. Accordingly, the AO disallowed an amount of Rs. 25,64,059/- out of the total deduction claimed u/s 80P of the Act as income attributable to the business of nominal and associate members.

4.

The aggrieved assessee preferred an appeal before the learned CIT(A). However, the appeal filed before the learned CIT(A) was delayed by 175 days. The learned CIT(A) did not condone the delay in filing of appeal and dismissed the appeal of the assessee in limine on account of delay.

5.

Being aggrieved by the order of ld. CIT-A, the assessee is in appeal before us.

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ITA No.2668/Bang/2025 Page 3 of 5 6. The learned AR before us submitted that the assessment order was passed as on 19-04-2021. The date of the assessment order falls during the COVID period. The Hon’ble Supreme Court, by taking cognizance of a Miscellaneous application Cognizance for Extension of Limitation, In re [2022] 134 taxmann.com 307 (SC) have directed that the period from 15- 03-2020 to 28-02-2022 be excluded from the limitation period for filing any suit/appeal/application. Therefore, the appeal filed by the assessee before the learned CIT(A) as on 09-11-2021 was well within time, and the learned CIT(A) erred in dismissing the appeal in limine on account of delay.

7.

The learned DR fairly submitted that if the directions issued by the Hon'ble Supreme Court in Cognizance for Extension of Limitation, In re are applicable to the facts of the present case, the issue may be decided in accordance with law. However, he relied upon the orders of the lower authorities.

8.

We have carefully considered the rival submissions and perused the materials available on record. The short issue before us is whether the learned CIT(A) was justified in dismissing the assessee's appeal in limine on the ground that it was barred by limitation. The undisputed facts reveal that the assessment order was passed on 19.04.2021, and the assessee preferred the appeal before the learned CIT(A) on 09.11.2021. The learned CIT(A), treating the appeal as delayed by 175 days, declined to condone the delay and dismissed the appeal without adjudicating the issues raised by the assessee on merits.

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ITA No.2668/Bang/2025 Page 4 of 5 8.1 However, we find that the learned CIT(A) failed to take into consideration the binding directions issued by the Hon'ble Supreme Court in Cognizance for Extension of Limitation, In re [2022] 134 taxmann.com 307 (SC). The Hon'ble Supreme Court categorically directed that the period from 15.03.2020 to 28.02.2022 shall stand excluded while computing the period of limitation prescribed under any general or special law in respect of all judicial and quasi-judicial proceedings. It was further directed that where the limitation would have expired during the aforesaid period, every litigant would be entitled to a minimum limitation period of 90 days from 01.03.2022, or the actual balance period of limitation, whichever is longer.

8.2 In the present case, the assessment order itself was passed on 19.04.2021, which falls squarely within the period excluded by the Hon'ble Supreme Court. Consequently, while computing the limitation for filing the appeal before the learned CIT(A), the entire period from 15.03.2020 to 28.02.2022 was liable to be excluded. Therefore, the appeal filed by the assessee on 09.11.2021 could not have been treated as time-barred. The dismissal of the appeal on the ground of limitation is thus contrary to the binding directions of the Hon'ble Supreme Court.

8.3 Since the learned CIT(A) has not examined the grounds raised by the assessee on merits, we consider it appropriate, in the interest of justice, to set aside the impugned order and restore the matter to the file of the learned CIT(A). The learned CIT(A) is directed to treat the appeal as filed within the prescribed period of limitation, in view of the directions of the Hon'ble Supreme Court, and adjudicate all the grounds raised by the assessee afresh on the merits, after affording the assessee an

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ITA No.2668/Bang/2025 Page 5 of 5 adequate opportunity of being heard and as per law. The assessee is also directed to extend full cooperation and furnish all necessary details as may be called for by the learned CIT(A). Accordingly, the impugned order of the learned CIT(A) is set aside and the matter is restored to his file for fresh adjudication on merits in accordance with law. Hence, the ground of the appeal of the assessee is allowed for statistical purposes.

9.

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

Order pronounced in court on 8th day of July, 2026

Sd/- Sd/- (KESHAV DUBEY) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 8th July, 2026 / vms /

Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore

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