NEKARAR PATTINA SAHAKARI SANGH NIYMIT,BAGALKOT KARNATAKA vs. INCOME TAX OFFICER WARD 1, BAGALKOT, BAGALKOT KARNATAKA

ITA 1559/BANG/2026Status: DisposedITAT Bangalore28 September 2026AY 2019-206 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the assessee is a co-operative society otherwise eligible for deduction under Section 80P. The issue arose because the return was not filed within the time prescribed under Section 139(1), which, under Section 80AC, barred the deduction. The assessee's appeal to the CIT(A) was dismissed for delay. The Tribunal acknowledged the assessee's contention regarding the delay and the subsequent reassessment order. The Tribunal held that the assessee's remaining remedy is to apply under Section 119(2) of the Act to the Central Board of Direct Taxes or the specified authority for condonation of delay in filing the return. The matter was restored to the Assessing Officer. The assessee was given 90 days from the receipt of the order to file such an application. If an application is filed within this period, the Assessing Officer is to wait for its disposal before denying the deduction. If no application is filed, the reassessment order under Section 147 will stand. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Nekarar Pattina Sahakari Sangh Niymit, is a co-operative society. For Assessment Year 2019-20, it did not file a return of income. Information from the Insight Portal indicated escaped assessment, leading to a notice under Section 148. The assessee had made substantial cash deposits of ₹41,824,500. It filed a return on March 18, 2023, declaring nil income, explaining the deposits as receipts from depositors and loan recoveries from members, supported by audited accounts. The Assessing Officer accepted the explanation for deposits but denied the deduction under Section 80P due to the delayed filing of the return, assessing total income at ₹4,722,894. The assessee's appeal to the CIT(A) was filed late, citing a belief that no appeal was initially required due to the absence of a demand for Section 80P denial in the reassessment order. The CIT(A) dismissed the appeal for not condoning the delay.

What were the issues?

1. Whether the Learned CIT(A) erred in law and on facts in not appreciating that there was a reasonable cause in filing the appeal under section 249 belatedly? (Mixed law and fact, turns on Section 249). 2. Whether the Learned CIT(A) and AO erred in law and on facts in passing the order without proper compliance with the procedure laid down under section 148A and without due application of mind? (Mixed law and fact, turns on Section 148A). 3. Whether the Learned CIT(A) and AO erred in recharacterizing the nature of income? (Mixed law and fact). 4. Whether the Learned CIT(A) and AO erred in law and on facts by denying the deduction to the extent of Rs 47,22,894/- as claimed u/s 80P(2)(a)(i)? (Mixed law and fact, turns on Section 80P and Section 80AC). Assessee's contentions: The impugned order is not justified. The AO passed the assessment order without jurisdiction. There was a reasonable cause for belatedly filing the appeal. The reassessment order is bad in law due to improper notice service and violation of principles of natural justice. Proceedings are bad in law as notices were issued in violation of Section 151A. Proper opportunity of being heard through Video Conferencing was not given. The order was passed without proper compliance with Section 148A and due application of mind. Income was wrongly recharacterized. Deduction u/s 80P was wrongly denied. Additions were made without cogent material. Penalty proceedings under Section 270A(6) were wrongly initiated. Demand notice under Section 156 was wrongly issued. Interest under Sections 234A/B/C was wrongly levied. Revenue's contentions: The Revenue's learned Standing Counsel concurred with the course of action proposed by the Tribunal.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 144B,Section 249,Section 148A,Section 151A,Section 148,Section 139(1),Section 80P,Section 80AC,Section 119(2),Section 270A(6),Section 156,Section 234A,Section 234B,Section 234C

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Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI

PER SHRI PRASHANT MAHARISHI, VICE PRESIDENT

1.

This appeal is filed by the Assessee against appellate order passed by the National faceless appeal Centre Delhi for assessment year 2019 – 20 on 17 December 2025 wherein the appeal filed by the assessee against the reassessment order passed under section 147 read with section 143 (3 read with section 144B of the income tax act, 1961 (the act) dated 1

The order continues below.

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