ARUGOLANU PRIMARY AGRICULTURAL COOPERATIVE CREDIT SOCIETY LTD,KRISHNA DIST vs. INCOME TAX OFFICER, WARD-1, GUDIVADA

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ITA 391/VIZ/2025Status: DisposedITAT Visakhapatnam24 April 2026AY 2020-215 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal and, considering the submissions of both parties, decided to remand the matter to the CIT(A) for adjudication on merits.

What were the facts?

The assessee, a cooperative society, filed its return declaring NIL income after claiming deductions. The AO treated interest earned from cooperative banks as 'income from other sources' and brought it to tax. The CIT(A) dismissed the appeal due to non-compliance by the assessee.

What were the issues?

Whether the interest earned by a cooperative society from cooperative banks is taxable as 'income from other sources' and whether the CIT(A) was justified in dismissing the appeal due to non-compliance.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM

Before: SHRI S.S. VISWANETHRA RAVI, HON’BLE & SHRI OMKARESHWAR CHIDARA, HON’BLE

For Appellant: Shri C. Subrahmanyam, CA
For Respondent: Shri CVA Rama Rao, Sr.AR
Pronounced: 24.04.2026

आदेश /O R D E R

PER S.S. VISWANETHRA RAVI, JM:

This appeal by the assessee against order dated 28.10.2024 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter in short “Ld. CIT(A)”] for the A.Y. 2020-21.

I.T.A.No.391/VIZ/2025 Arugolanu Primary Agricultural Cooperative Credit Society Ltd., 2. We find this appeal was filed with a delay of 163 days. The assessee filed petition accompanied with an affidavit dated 25.11.2025 explaining the reasons for the said delay. On perusal of the said affidavit and upon hearing both the parties, we find the reasons stated by the assessee are bonafide which really prevented the assessee in filing appeal in time. Thus, delay of 163 days condoned.

3.

At the outset, it is noted that the assessee is a Cooperative Society registered under the Andhra Pradesh Cooperative Societies Act, 1964 and filed return of income declaring a total income at Rs.NIL after claiming deduction under Chapter VI-A of the Income Tax Act, 1961 [hereinafter in short “the Act”]. According to A.O that the surplus funds have been deposited with Cooperative Banks with a sole motive to earn interest which brings in the element of commerciality and held the interest derived from Cooperative Banks as “income from other sources” which is evident from Page No. 5 of the Assessment Order. Accordingly, vide his findings in Page No. 11 of the Assessment Order treated an amount of Rs.39,54,995/- are not business receipt and disallowed the same and brought to tax under the “income from other sources” vide his order dated 23.09.2022 passed under section 143(3) r.w.s. 144B of the Act. Having not satisfied with the order of A.O, the assessee preferred an appeal before CIT(A). We note that the CIT(A) issued five notices wherein no compliance was made by the assessee except on two occasions seeking adjournment which is evident from Para No. 5 of the impugned order. Accordingly, by applying the ratio laid down

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I.T.A.No.391/VIZ/2025 Arugolanu Primary Agricultural Cooperative Credit Society Ltd., by the Hon'ble High Court of Delhi in the case of CIT v. Gold Leaf Capital Corporation Limited in ITA No. 798 of 2009 dated 02.09.2011, the CIT(A) dismissed the grounds of appeal by holding that the assessee is not interested in availing the opportunities provided to make submissions in support of the grounds of appeal. Aggrieved by the said order, the assessee is in appeal before us.

4.

The Learned Authorised Representative, Shri C. Subrahmanyam, CA [hereinafter in short “Ld.AR”] submits that the assessee is ready to prosecute its case before the CIT(A), if this Tribunal affords an opportunity by remanding the matter to the file of CIT(A).

5.

The Learned Departmental Representative, Shri CVA Rama Rao, Sr.AR [hereinafter in short “Ld. DR”] vehemently opposed the same and draw our attention to the Page No. 5 of the impugned order and submits that the CIT(A) has given ample opportunities to the assessee but no compliance made thereto. Ld. DR reported no objection in remanding matter to the file of CIT(A) on payment of costs.

6.

Heard both the parties and perused the material available on record. Admittedly as it is clear from Para No. 5 of the impugned order that there was no compliance on behalf of the assessee in the First Appellate Proceedings supporting the grounds raised therein and there is no dispute with regard to the finding of the CIT(A) by applying the ratio laid down by the Hon'ble High Court

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I.T.A.No.391/VIZ/2025 Arugolanu Primary Agricultural Cooperative Credit Society Ltd., of Delhi in the case of CIT v. Gold Leaf Capital Corporation Limited (supra) dismissing the grounds exparte of assessee. Therefore, considering the submissions of the Ld.AR & Ld. DR, the facts and circumstances of the case and in the interest of justice, we deem it proper to remand the matter to the file of CIT(A) on a condition of payment of Rs.5,000/- costs in favor of “The Andhra Pradesh Legal Services Authority of Hon’ble High Court of Andhra Pradesh at Amaravati” within 30 days from the date of receipt of this order. The CIT(A) shall satisfy the payment of costs and proceed to adjudicate the issue on merits by affording an opportunity to the assessee. The assessee is at liberty to file evidences, if any, in support of its claim. The assessee shall prosecute its case by making compliances to the notices issued by the CIT(A). Thus, ground raised by the assessee are allowed for statistical purposes.

7.

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

Order pronounced in the open court on 24th April, 2026.

Sd/- Sd/- (ओंकारेश्वर धिदारा) (एस.एस.धिश्वनेत्र रधि) (OMKARESHWAR CHIDARA) (S.S. VISWANETHRA RAVI) लेखा सदस्य /ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER Dated: 24.04.2026 Giridhar, Sr.PS

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I.T.A.No.391/VIZ/2025 Arugolanu Primary Agricultural Cooperative Credit Society Ltd., आदेश की प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/ The Assessee : Arugolanu Primary Agricultural Cooperative Credit Society Ltd., Door No. 1/6, Arugolanu Post and Village Bapulapadu Mandal, Krishna – 521106 Andhra Pradesh, India 2. रधजस्व/ The Revenue : Income Tax Officer – Ward 1 Income Tax Office Opp. Bhaskar Talkies Gudiwada - 521301 3. The Principal Commissioner of Income Tax 4. नवभधगीयप्रनतनिनर्, आयकरअपीलीयअनर्करण, नवशधखधपटणम /DR,ITAT, Visakhapatnam 5. The Commissioner of Income Tax गधर्ाफ़धईल / Guard file 6. आदेशधिुसधर / BY ORDER Digitally signed by V V S S S S GIRIDHAR BABU GIRIDHAR MEKALA Date: 2026.04.24 BABU MEKALA 13:23:34 +05'30' Sr. Private Secretary ITAT, Visakhapatnam

Page. No 5

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