PARTHASARADHI MUTUALLY AIDED CO-OPERATIVE THRIFT SOCIETY LIMITED,HYDERABAD vs. INCOME-TAX OFFICER, WARD-17(1), HYDERABAD

ITA 2322/HYD/2026Status: DisposedITAT Hyderabad16 October 20268 pages
AI SummaryRemanded

What were the facts?

The assessee, Parthasaradhi Mutually Aided Co-operative Thrift Society Ltd, filed an appeal against the order of the NFAC/CIT(A) for Assessment Year 2016-17. There was a delay of 171 days in filing the appeal, attributed by the assessee to its part-time accountant failing to inform management about the CIT(A)'s order. The revenue did not seriously object to the delay condonation. The assessee had not filed its return under Section 139, leading to reassessment proceedings initiated under Section 147. The Assessing Officer disallowed a deduction of Rs. 18,83,982/- claimed under Section 80P(2)(a)(i), holding that the interest income was from non-members. The CIT(A) confirmed this disallowance.

What did the Tribunal hold?

The Tribunal condoned the delay of 171 days, finding sufficient cause for the assessee's inability to file within the prescribed period, noting the prompt action upon knowledge of the order and the revenue's lack of serious objection. Regarding the deduction under Section 80P, the Tribunal admitted the additional evidence (English translations of bye-laws and financial statements) under Rule 29 of the ITAT Rules, 1963, as it was relevant to the assessee's activities and income source. However, it held that the entries in the translated financial statements and the claim that all interest income was from members required verification with original records, books of account, membership records, and supporting documents. Consequently, the Tribunal set aside the CIT(A)'s order on this issue and restored the matter to the AO for fresh adjudication. The AO is directed to examine the additional evidence, verify the nature and source of interest income, and determine its eligibility for deduction under Section 80P, considering the principles laid down in Totgars Co-operative Sale Society Ltd. Vs. ITO (supra). The AO shall afford the assessee an opportunity of being heard. No opinion was expressed on the merits of the claim.

What were the issues?

1. Whether the delay of 171 days in filing the appeal should be condoned under the Income-tax Act, 1961, considering the explanation provided by the assessee regarding communication breakdown. 2. Whether the denial of deduction under Section 80P(2)(a)(i) of the Act, amounting to Rs. 18,83,980/-, by the Assessing Officer and confirmed by the NFAC/CIT(A) is legally sustainable. Assessee's Arguments: - The delay was due to a communication failure and not deliberate, praying for condonation. - The entire interest income was earned from credit facilities provided to its members, making it eligible for deduction under Section 80P(2)(a)(i). - The financial statements were in Telugu, and their English translation, along with bye-laws, is now submitted as additional evidence, supporting the claim that income was solely from members. - Relied on the decision in Totgars Co-operative Sale Society Ltd. Vs. ITO [2010] 322 ITR 283 (SC). Revenue's Arguments: - The English translations of bye-laws and financial statements are being furnished for the first time. - The contention regarding the source of interest income requires factual verification with the AO. - Prayed that the issue be restored to the AO for examination of additional evidence.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 139,Section 144B,Section 250,Section 80P(2)(a)(i),Section 80P,Section 234A,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad

Before: Shri Ravish SoodShri Madhusudan Sawdia

Hearing: 12/10/2026

Per Madhusudhan Sawdia, A.M.: This appeal is filed by Parthasaradhi Mutually Aided Co-operative Thrift Society Ltd (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi (“Ld. CIT(A)”) dated 18.11.2025 for the A.Y. 2016-17. ITA No 2322 of 2026 Parthasaradhi Mutually Aided Cooperative

2.

At the outset, it is observed that there is a delay o

The order continues below.

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