PRESTIGE SHANTINIKETAN APARTMENT OWNERS WELFARE ASSOCIATION,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(1), BANGALORE
What did the Tribunal hold?
The Tribunal held that the CIT(A) erred in dismissing the appeal as belated, as the Supreme Court's directions on limitation extension due to COVID-19 were applicable. The matter was therefore remitted back to the CIT(A) for adjudication on merits.
What were the facts?
The assessee, a residents' welfare association, filed an appeal before the CIT(A) which was dismissed as belated. The assessee claimed the delay should be condoned based on Supreme Court orders regarding COVID-19 related limitations.
What were the issues?
Whether the appeal filed before the CIT(A) was belated, considering the Supreme Court's directions on limitation extension due to the COVID-19 pandemic.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B’’BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC dated 22.7.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1078767935(1) passed u/s 250 of the Income Tax Act ,1961 (in short “the Act”) for the assessment year 2018-19.
The assessee has raised the following grounds of appeal:-
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The brief facts of the case are that the assessee is a Residents' Welfare Association of the Prestige Shanthinikethan Apartment in Bengaluru. The activities of the association comprises of: a) Providing the services of maintaining common areas like parks and roads, managing finances by collecting fees and paying bills, ensuring security, organizing community events, mediating resident disputes, and acting as a liaison with local authorities for services like sanitation and water supply. These services are rendered to the
ITA No.2113/Bang/2025 M/s. Prestige Shantiniketan Apartment Owners Welfare Association, Bengaluru Page 4 of 9 members of the association. As the income generated from these kinds of activities falls under mutuality concept, the association is not paying tax on the revenue generated from the members of the association.
b) The association is earning income from renting of the buildings, providing cleaning service and other amenities to the tenants who are not the members of the association. Further, during the year under consideration, the association had earned interest from surplus funds invested in Fixed Deposits with the banks. The assessee filed its return of income for the AY 2018-19 u/s 139(1) of the Act on 27/08/2018 declaring total income of Rs.2,21,38,950/- under the head “Income from Other Sources.” The said return of income was processed & accordingly intimation u/s 143(1) of the Act was passed on 11/01/2019 accepting the returned income of Rs.2,21,38,947/-. Thereafter, the case of the assessee was selected for the limited scrutiny under E- assessment scheme, 2019 on the issues of (i) Deductions from Income from other Sources and (ii) Sales Turnover/Receipts. Accordingly, the notices u/s 143(2) of the Act as well as 142(1) of the act were issued and served on the assessee. On perusal of the return of income, the AO noticed that the assessee had shown interest income of Rs. 1,78,16,318/- and other income of Rs.23,87,14,074/- and had claimed deduction u/s 57 of the Act amounting to Rs.21,65,75,127/-. During the course of assessment proceedings, the assessee did not respond to any of the notices including the show cause notices. As the assessee failed to submit any reply in response to notices u/s 142(1) of the Act as well as show cause notices, the AO had no option but to finalize the assessment on the basis of materials available on the record. Since the assessee had not submitted any details of deduction claimed u/s. 57 of the Act amounting to Rs. 21,65,75,127/-, the same was
ITA No.2113/Bang/2025 M/s. Prestige Shantiniketan Apartment Owners Welfare Association, Bengaluru Page 5 of 9 disallowed and added back to the total income of the assessee. Thus, the AO completed the assessment proceedings on a total assessed income of Rs.23,87,14,070/- while passing the assessment order u/s 144 of Act dated 12/06/2021.
Aggrieved by the aforesaid order of the AO passed under section 144 of the Act dated 12/06/2021, the assessee preferred an appeal before the ld. CIT(A)/NFAC.
The ld. CIT(A)/NFAC dismissed the appeal of the assessee after finding that the appeal have been filed belatedly by 36 days. Further, at paragraph 5.2 of the said Order, the ld. CIT(A)/NFAC also observed that as the impugned order u/s 144 of the Act was served on the assessee on 12/06/2021 & the appeal was filed on 16/08/2021 & therefore the appeal is late by 58 days. In this case, there was no explanation for the delay nor there was any request for condonation of such delay. The ld. CIT(A)/NFAC dismissed the appeal in limine as the assessee had not filed any request or reason for condonation of delay.
Again, aggrieved by the order of ld. CIT(A)/NFAC dated 22/07/2025, the assessee has filed the present appeal before this Tribunal. Further, the assessee has also filed a paper book comprising 59 pages containing therein the written submission along with the copy of ITR, copy of GSTR-9, copy of reply filed before the AO and the case laws relied upon by the assessee.
Before us, the ld. A.R. of the assessee vehemently submitted that the order of the ld. CIT(A)/NFAC has to be set aside as the ld. CIT(A)/NFAC did not consider the extended limitation for filing the appeal as per the decision of the Hon’ble Supreme Court. Further it
ITA No.2113/Bang/2025 M/s. Prestige Shantiniketan Apartment Owners Welfare Association, Bengaluru Page 6 of 9 is submitted that the Authorities below did not appreciate the settled judicial precedents to the effect that receipts of assessee from its members are completely exempt from income tax on the ground of mutuality. It is also submitted that the assessee’s appeal was rejected on the ground of limitation without considering the relaxation granted by the Hon’ble Supreme Court vide order dated 10/01/2022. Lastly, the ld. AR submitted that the assessee also could not represent its case before the AO due to the Covid Pandemic & accordingly prayed that the case may be remitted back to the file of AO to decide a fresh in the interest of justice & equity.
The ld. D.R. on the other hand supported the orders of the Authorities below.
We have heard the rival submissions and perused the material available on record. On perusal of Form No.35, we observed that in Sl. No. 14, the assessee in response to whether there is delay in filing the appeal has categorically mentioned as “NO”. Undisputedly, the assessment order u/s. 144 of the Act was passed on 12/06/2021. On perusal of the order of ld. CIT(A)/NFAC, we noticed that the appeal was instituted by assessee on 16/08/2021 against the assessment order dated 12/06/2021 & thus as held by the ld. CIT(A)/NFAC there is a delay of 36/58 days in filing the appeal. Further, the ld. CIT(A)/NFAC held that as there was no explanation for the delay nor there was any request for condonation of such delay, dismissed the appeal in limine. We are of the considered opinion that in holding so, the ld. CIT(A)/NFAC completely ignored the directions of the order of the Hon’ble Supreme Court in suo motu cognizance for extension of limitation as reported in (SC)(2022) 441 ITR 722 wherein the Apex Court directed as under-
ITA No.2113/Bang/2025 M/s. Prestige Shantiniketan Apartment Owners Welfare Association, Bengaluru Page 7 of 9
“5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions :-- I. The Order, dated 23-3-2020 is restored and in continuation of the subsequent orders dated 8-3-2021, 27-4-2021 and 23-9-2021, it is directed that the period from 15-3-2020 till 28-2-2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi[1]judicial proceedings.
II. Consequently, the balance period of limitation remaining as on 3-10-2021, if any, shall become available with effect from 1-3-2022.
III. In cases where the limitation would have expired during the period between 15-3-2020 till 28-2-2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 1-3-2022. In the event the actual balance period of limitation remaining, with effect from 1-3- 2022 is greater than 90 days, that longer period shall apply.
IV. It is further clarified that the period from 15-3-2020 till 28-2-2022 shall also stand excluded in computing the periods prescribed under sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.”
Thus, the Hon’ble Supreme Court of India in paragraph III as above has categorically stated that in cases where the limitation would have expired during the period between 15/03/2020 till 28/02/2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01/03/2022. Further, in the event the actual balance period of limitation remaining, w.e.f. 01/03/2022 is greater than 90 days, that longer period shall apply. Thus, in our considered opinion, the paragraph III of the above Apex Court order dated 10/01/2022 categorically talks about the cases where the
ITA No.2113/Bang/2025 M/s. Prestige Shantiniketan Apartment Owners Welfare Association, Bengaluru Page 8 of 9 limitation period would have expired during the period between 15/03/2020 till 28/02/2022.
9.1 In the present case, undisputedly the limitation period for filing the appeal before the ld.CIT(A)/NFAC had expired during the period between 15/03/2020 till 28/02/2022 and accordingly as per the above direction, the assessee shall have a limitation period of 90 days from 01/03/2022. We take a note of the fact that the assessee had filed the appeal before the ld. CIT(A)/NFAC on 16/08/2021 itself & therefore in view of the aforesaid directions, there is no delay in filing the appeal before the ld. CIT(A)/NFAC. Therefore, the observation of the ld. CIT(A)/NFAC that the appeal is found to have been filed delayed by 36/58 days is illegal & bad-in law. In holding so, we also endorse the action of the assessee in giving declaration in form 35 by stating in Sl. No. 14 of form 35 that there is no delay in filing the appeal. In our considered view when there is no delay in filing the appeal in view of the above directions of the Hon’ble Apex court in Order dated 10/01/2022, then question of filing the explanation for the delay or request for condonation does not arise at all in the case of the assessee.
9.2 Further, now having held that there was no delay in filing the appeal before the ld. CIT(A)/NFAC and considering the fact that the ld. CIT(A)/NFAC dismissed the appeal in limine, we deemed it fit and proper to remit the entire issues in dispute to the file of ld.CIT(A)/NFAC to decide on merits of the case afresh in accordance with law. Needless to say, reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce all the relevant documents/record to substantiate its claim. It is ordered accordingly.
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In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 29th June, 2026
Sd/- Sd/- (Waseem Ahmed) (Keshav Dubey) Accountant Member Judicial Member
Bangalore, Dated 29th June, 2026. VG/SPS
Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order
Asst. Registrar, ITAT, Bangalore.
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