SAHKARI GANNA VIKAS SAMITI LTD,BASTI vs. ITO, BASTI

PER ANADEE NATH MISSHRA:A.M. (A) These appeals have been filed by the assessee against the impugned appellate orders of learned CIT(A)/National Faceless Appeal Centre (NFAC), Delhi dated 02.09.2024 & 24.09.2024 respectively for the AY 2014-15 & 2015-16. Grounds of appeal are as under: ITA No. 654/Lkw/2024 i. Because the order of the Id. CIT (A), NFAC dismissing appeal confirming assessment of total income at Rs. 11957082/- has been passed without giving sufficient opportunity of being heard in as much as order by the Id.

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CIT(A) has been passed much before the date fixed for hearing of the appeal, which has admittedly been on 18.09.2024. ii. Because order of the Id. CIT(A), NFAC dismissing appeal confirming addition of Rs. 11957082/- is based on self contradictory facts so far as it relates to the issue of receipt of comments sought by him from the Id. assessing officer, on submissions of the appellant. iii. Because the Id. CIT(A), NFAC has, while dismissing appeal against addition of Rs. 11957082/-, failed to appreciate the fact that in the remand report dt. 16.08.2024 furnished by the Id. A.O. on different submissions of the appellant, the Id. A.O. did not object, either to the books of a/c's of the appellant or the books result or even to the claim of deduction u/s 80P(2)(a)(iii) in respect of the assessed net profit of Rs. 11670717/- against the gross commission receipts of Rs. 17506075/- from the sugar mills against the marketing activity by the appellant and the Id. A.O. objected to the claim of deduction u/s 80P only respect of the interest and dividend receipts totaling Rs. 286365/-. iv. Because while confirming disallowance of deduction u/s 80P(2)(a)(iii) in respect of the estimated net profit of Rs. 11670717/- against the commission receipts of Rs. 17506075/-against the activity of marketing of sugar cane grown by the members of the appellant cooperative society, the Id. CIT(A) has not considered the whole facts and circumstance of the case, materials on record and the related special law referred to in its right perspective and that too, wrongly ignoring the citied decision of Hon'ble ITAT Allahabad in ITA no. 599/Alld/2014 in an identical case. v. Because the Id. CIT(A), NFAC has erred in rejecting the claim of deduction u/s 80P(2)(a)(iii) in respect of the estimated net profit of Rs. 11670717/- out of the gross commission receipts of Rs. 17506075/- against the activity of marketing on basis of decision of Hon'ble ITAT Allahabad in referred ITA No. 92/Alld./2020 & ITA no. 93/Alld./2020 when in these orders, no final decisions have been given on issue of allow ability of claim of deduction u/s 80P but issue has been restored to the file of the Id. CIT(A) for adjudication afresh and this has also been done so by the Hon'ble ITAT on another point which is not disputed/involved in the present case. vi. Because the Id. CIT(A) has erred in law and on facts of the case in confirming rejecting of a/c books particularly when in the remand report dt. 16.08.2024 admittedly submitted by the Id. A.O., the Id. A.O. did not object to the acceptance of the a/c's books produced. vii. Because the Id. CIT(A) has erred in law and on whole facts of the case facts, in confirming the rejection of claim of deduction u/s 80P on basis of rejection of a/c books.

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viii. Because there is no finding by the Id. CIT(A) that the submission made by the appellant in respect of claim of deduction u/s 80P(2)(a)(i) second limb in respect of the interest of Rs.65042.62 (included in total assessed interest etc. income of RS. 286365/-) received on credits ix. Because on whole facts, circumstances of the case, materials on record and in law and the Id. CIT(A) has erred in confirming assessment of interest of Rs. 157922/- (included in total assessed interest etc. income of Rs. 286365/-) as taxable income u/s 56 and in not allowing deduction u/s 80P(2)(a)(iii) in respect of it when this interest erred falls u/s 80P(2)(a)(iii). x. Because on whole facts, circumstances of the case, materials on record and in law and the Id. CIT(A) has erred in confirming assessment of interest/dividend income of Rs. 63400/-(included in total assessed interest etc. income of Rs. 286365/-) as taxable income u/s 56 and in not allowing deduction u/s 80P(2)(a)(iii) and also 80P(2)(d) in respect of it. xi. Because the Id. CIT(A) has failed to consider the 9th ground of the grounds of appeal and to adjudicate upon it.” ITA No. 660/Lkw/2024 AY 2015-16

i. Because on whole facts, circumstances of the case, the materials on record and in law, the Id. CIT (A), NFAC has erred in confirming the disallowance of claim of deduction u/s 80P(2)(a) (iii) in respect of the disclosed as well as assessed net profit of Rs. 97,00,000/- out of the disclosed gross receipts of Rs. 1,65,00,000/- against the activity of marketing of the sugar cane, grown by members of the appellant, a cooperative society. ii. Because on whole facts, circumstances of the case, the materials on record and in law, the grounds taken by the Id. CIT (A), NFAC in confirming the disallowance of claim of deduction u/s 80P(2)(a)(iii) in respect of the disclosed as well as assessed net profit of Rs. 97,00,000/- out of the disclosed gross receipts against the activity of marketing of the sugar cane grown by members of the appellant are misconceived, self contradictory, incorrect and unjustified. iii. Because on whole facts, circumstances of the case, the materials on record and in law and also in view of decision of Hon'ble S.C. In case of Radhasoami Satsang. Saomi Bagh, Agra Vs. CIT, reported in 193 ITR 321, the Id. CIT(A) has, while confirming an addition of Rs. 97,00,000/- as disallowance of claim of deduction u/s 80P(2)(a)(iii) in respect of it, erred in confirming this addition not allowing deduction u/s 80P(2)(a)(iii) when such claim of deduction in respect of the profit against the similar activity falling u/s 80P(2)(a)(iii) in earlier years has been allowed to the appellant.

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iv. Because on whole facts, circumstances of the case, the materials on record and in law and in view of CBDT's circular also, the Id. CIT(A), NFAC has erred in confirming an addition of Rs. 68,00,000/- made as disallowance of expenses claimed against the disclosed gross receipts of Rs. 1,65,00,000/- against the activity of marketing of the sugar cane, grown by members of the appellant- cooperative society, when the case for scrutiny u/s 143(2) has been under limited scrutiny only to verify the claim of deduction made u/s 80P, and this addition made by the Ld. A.O. had been without authority of law in as much as he travelled beyond his legal jurisdiction in making addition on account of claim of expenses u/s 57. v. Because the Ld. CIT(A) has erred in confirming an addition of Rs. 6800000/- made on account of disallowance of expenses claimed against the disclosed gross receipts of Rs. 1,65,00,000/- when these disclosed total gross receipts are against an activity of marketing of the sugar cane grown by the members of the appellant cooperative society, which activity falls u/s 80P(2)(a) (iii) and all the ingredients of this provision are fulfilled in the present case, consequently eligible for full deduction u/s 80P(2)(a)(iii). vi. Because all the grounds taken by the Ld. CIT (A), NFAC in confirming an addition of Rs. 68,00,000/-made has disallowance of expenses claimed u/s 57 are not correct and justified. vii. Because on whole facts, circumstances of the case, the materials on record and in law, the ld. CIT(A), NFAC has erred in confirming an addition of Rs. 128223/ on account of interest received u/s 244A of Income Tax Act, 1961 on refund of the TDS made u/s 194H on the receipts falling u/s 80P(2)(a)(iii) in earlier years. viii. Because on whole facts, circumstances of the case, the materials on record and in law, the Id. CIT(A). NFAC has erred in confirming an addition of Rs. 128223/ on account of interest received u/s 244A of the Income Tax Act 1961, when the case for scrutiny u/s 143(2) has been under limited scrutiny only to verify the claim of deduction made u/s 80P, and this addition of Rs. 128223/- made by the Id. A.O. had been without authority of law in as much as he travelled beyond his legal jurisdiction in making this addition.

(B) The present appeals have been filed beyond the time prescribed under section 253(3) of the Income Tax Act, 1961 (the Act). The assessee has filed applications for condonation of delay in filing of these appeals. The learned Departmental Representative expressed no objection to condonation of delay, as requested by the appellant assessee. In view of the reasons stated

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in the applications, the delay in filing of the appeals are condoned under section 253(5) of the Act and the appeals are admitted.

(C) For the sake of convenience, these two appeals are hereby disposed off through this consolidated order. In both these appeals, the assessee has taken several grounds of appeal. However, they all pertain to the assessee’s claim for deduction under section 80P of the Income Tax Act, 1961 (the Act). The Assessing Officer denied the assessee’s claim for deduction under section80P of the Act, relying on the order of Hon'ble Supreme Court in the case of Totgar's Cooperative Sale Society Ltd. (322 ITR 283 SC). The assessee’s appeals against the assessment orders were also dismissed by the Learned CIT(A) vide impugned appellate orders, relying on the aforesaid order of Hon'ble Supreme Court in the case of Totgar's Cooperative Sale Society Ltd. (supra)

(D) At the time of hearing on 28.04.2026, there was no representation from the assessees side. In the absence of any representation from the assessees side, the Learned Departmental Representative was heard. He relied on the assessment orders and the impugned appellate orders of the Learned CIT(A). The assessment orders as well as the impugned appellate orders of the Learned CIT(A) have been passed, denying the assessee’s claim for deduction under section 80P of the Act, following the order of Hon'ble Supreme Court in the case of Totgar's Cooperative Sale Society Ltd. (supra). No material has been brought for our consideration to distinguish the assessee’s case from the aforesaid case of Totgar's Cooperative Sale Society Ltd. (supra). Further, no material has been brought for our consideration to persuade as to take a view

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different from the view taken by the Assessing Officer and by Learned CIT(A) in their respective orders. Therefore these appeals are dismissed.

(D.1) By way of abundant caution, it is hereby clarified that the assessee will be at liberty to approach ITAT for restoration of these appeals, if the assessee establishes ‘sufficient cause’ within the meaning of Rule 24 of Income Tax (Appellate Tribunal) Rules, for non-appearance on the date of hearing (i.e. on 28.04.2026).

(E) All the grounds of appeal in both the present appeals are treated as disposed off, in accordance with the aforesaid directions. Both the appeals are dismissed.

(Order was pronounced in the open court on 19/05/2026)

Sd/- Sd/- (KUL BHARAT) (ANADEE NATH MISSHRA) Vice-President Accountant Member Date: 19/05/2026 SK, Sr.PS

Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. D.R., I.T.A.T., 5. CIT(A) Senior Private Secretary Income Tax Appellate Tribunal Lucknow