THE OLPAD SAYAN KIM NARARIK DHIRAN SAHKARI MANDLI LTD.,SURAT vs. ACIT CIRCLE-2(1)(1), SURAT

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ITA 1137/SRT/2025Status: PendingITAT Surat30 October 2026AY 2019-204 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the CIT(A) dismissed the appeal solely on the ground of delay, without examining the merits of the case. The delay was attributed to the negligence of the assessee's previous consultant, which should not be held against the assessee. The Tribunal observed that the assessee's claim for deductions under Section 80P(2)(a)(i) and 80P(2)(d) appeared to have not been verified by either the CIT(A) or the AO. Therefore, to ensure proper verification of the claim, the Tribunal decided to remand the matter back to the file of the AO. The AO was directed to properly verify the claim made by the assessee under Section 80P and adjudicate the issue accordingly. The assessee was also to be given an opportunity of hearing, adhering to the principles of natural justice. The specific amount of Rs. 98,09,175/- mentioned in ground 2 was not specifically addressed in terms of its allowability, as the matter was remanded.

What were the facts?

The assessee, The Olpad Sayan Kim Nagarik Dhiran Sahkari Mandli Ltd., filed its return of income for Assessment Year 2019-20 on October 17, 2019, declaring Nil income and claiming deductions under Section 80P(2)(a)(i) and 80P(2)(d) of the Income Tax Act, 1961, totaling Rs. 1,45,41,865. The Assessing Officer (AO), through an intimation under Section 143(1) dated April 16, 2020, did not grant these deductions. A rectification application filed by the assessee on June 5, 2020, was not considered, and the AO passed an order under Section 154 on July 11, 2020, again disallowing the Section 80P deductions. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who dismissed the appeal solely on the grounds of delay, without adjudicating on the merits.

What were the issues?

1. Whether the CIT(A) erred in upholding the AO's order under Section 154, which disallowed deductions claimed under Section 80P of the Act, resulting in an income assessment of Rs. 98,09,175/- against a returned income of Nil, based on alleged misinterpretation and misconstruction of law. 2. Whether the lower authorities (AO and CIT(A)) grievously failed in not allowing the deduction claimed under Section 80P for Rs. 98,09,175/-, rendering their orders bad in law, illegal, perverse, and without jurisdiction. Assessee's Contentions: - The delay in filing the appeal before the CIT(A) was not deliberate but due to the failure of the previous consultant, and the assessee appointed a new consultant who immediately filed the appeal. This was not considered by the CIT(A). - The assessee, being a cooperative society, has a genuine claim for deduction under Section 80P(2)(a)(i) and 80P(2)(d) from interest income earned through its members and other cooperative societies, including the Surat District Cooperative Bank. - The AO also failed to consider the details provided in the computation of income. - The matter should be remanded to the AO for proper verification of the claim. Revenue's Contentions: - The Ld. DR relied upon the order under Section 143(1) and the order of the CIT(A).

Which sections of the Income-tax Act were involved?

Section 143(1),Section 154,Section 153(1),Section 80P,Section 80P(2)(a)(i),Section 80P(2)(d)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

Pronounced: 30.10.2026

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No.1137/SRT/2025 (निर्धारण वर्ा/Assessment Year: 2019-20) THE OLPAD SAYAN KIM (1) The Assistant Commissioner NAGARIK DHIRAN SAHKARI of Income Tax, CPC MANDLI LTD. Post Bag No.2, KARSON PURA,OPP. OLD CIVIL Electronic City Post Office, COURT, OLPAD BAZAR, Bengaluru – 560 500 DISTT SURAT, SURAT-394540, GUJARAT Vs. (2) The Assistant Commissioner of Income Tax, Circle-2(1)(1), Surat AAYAKAR BHAWAN, MAJURA GATE, SURAT-395001, GUJARAT अपीलधर्थी Appellant प्रत्यर्थी Respondent

Permanent Account Number of Assessee: AAAAT5031F

अपीलधर्थी द्वारा/Appellant represented by: Sh. Akshay M. Modi, CA प्रत्यर्थी द्वारा/Respondent represented by: Shri Ashish Kumar, Sr. DR सुनवाई की तारीख / Date of conclusion of hearing: 31.08.2026 घोषणा की तारीख / Date of pronouncement: 30.10.2026

O R D E R PER : SUCHITRA KAMBLE, J M:

The appeal filed by the assessee is against the order passed by the Commissioner of Income Tax (Appeal), ADDL/JCIT (A), Mumbai [in short “CIT(A)”] dated 25.10.2024 for the Assessment Year (in short “AY”) 2019-20.

ITA No.1137/SRT/2025 (A.Y. 2019-20) THE OLPAD SAYAN KIM NAGARIK DHIRAN SAHKARI MANDLI LTD.

2.

The assessee has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case as well in law, the Addl/JCIT (A)-6 Mumbai erred in upholding the order passed by DCIT, CPC, Bengaluru (for the sake of brevity "The AO") u/s 154 of the Act for the income assessed at Rs. 98,09,175/- against the returned income at Rs. Nil denying the deductions claimed u/s 80P of the Act for the aggregate amount of Rs.1,45,41,865/- (subject to the availability of Gross Total Income), purely on misinterpretation and misconstruction of the provisions of law, misleading, mis-conceptual, arbitrary and perverse observations and hence, is liable to be quashed or annulled in toto.

2.

On the facts and in the circumstances of the case as well in law, both the lower authorities have grievously failed in not allowing the deduction claimed u/s 80P for Rs.98,09,175/- (subject to the availability of the Gross Total Income) is bad in law, illegal, perverse, without jurisdiction and hence, liable to be quashed.

3.

Your appellant further reserves its rights to add, alter, amend or modify any of the aforesaid grounds before or at the time of hearing of an appeal.” 3. The assessee filed return of income for A.Y. 2019-20 on 17.10.2019 declaring total income at Rs.Nil, thereby claiming deduction u/s 80P(2)(a)(i) and u/s 80P(2)(d) of the Act Income Tax Act, 1961 (in short “the Act”) for Rs.98,09,175/- and Rs.47,32,690/-. While processing the return of income, ADIT-CPC has not considered the deductions claimed under chapter VIA i.e. 80P(2)(a)(i) and 80P(2)(d) of the Act for total amount of Rs.1,45,41,865/- which was shown in schedule VIA of ITR-V filed by the assessee. Thus, as per intimation order u/s 143(1) dated 16.04.2020 the assessee was not granted deduction u/s 80P of the Act. The assessee filed rectification application on 05.06.2020 but the same was not considered and the Assessing Officer (in short “the AO”) passed order u/s 154 r.w.s. section 153(1) dated 11.07.2020 thereby once again not granting deduction u/s 80P of the Act.

4.

Being aggrieved by the order dated 11.07.2020 passed u/s 154 r.w.s. 143(1) of the Act, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee on the ground of delay.

ITA No.1137/SRT/2025 (A.Y. 2019-20) THE OLPAD SAYAN KIM NAGARIK DHIRAN SAHKARI MANDLI LTD. 5. The Ld. Authoritised Representative (in short “the Ld. AR”) submitted that the delay before the CIT(A) was not deliberate but due to the fact that the assessee’s earlier consultant has failed to file the appeal before the CIT(A) within the stipulated time. Thereafter, the assessee appointed a new tax consultant and immediately filed the appeal before the CIT(A). This fact was not considered by the CIT(A). The Ld. AR submitted that the assessee has a genuine claim u/s 80P(2)(a)(i) and u/s 80P(2)(d) of the Act as the assessee is the cooperative society and is deriving interest income through its members as well as through the interest from member cooperative society which includes the Surat District Cooperative Bank at various branches. The Ld. AR submitted that the CIT(A) should have considered these details and in fact the AO also failed to take cognizance of the details filed by the assessee as per computation of income. The Ld. AR submitted that the matter may be remanded back to the file of the AO for proper verification of the claim made by the assessee.

6.

The Ld. Departmental Representative (in short “Ld. DR”) relied upon the order u/s 143(1) and the order of the CIT(A).

7.

We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the CIT(A) has dismissed the appeal without going into the merits but only on the ground of delay and the delay before the CIT(A) was also not deliberate but due to the fact that the assessee’s earlier consultant did not file the appeal within time. The negligence of the earlier consultant cannot be held as negligence of the assessee. The assessee’s claim of 80P(2)(a)(i) and 80P(2)(d) of the Act appears to be not verified by the CIT(A) as well as by the AO, therefore it will be appropriate to remand this matter to the file of the AO for proper verification of the claim u/s 80P made by the assessee and adjudicate the issue accordingly. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice.

ITA No.1137/SRT/2025 (A.Y. 2019-20) THE OLPAD SAYAN KIM NAGARIK DHIRAN SAHKARI MANDLI LTD.

8.

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

Order pronounced in the open court on 30.10.2026

Sd/- Sd/- (B.M. BIYANI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat; Dated: 30.10.2026 * Kishore, Sr. P.S.

Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Surat 5. Guard File By order, HEMA KISHORE Digitally signed by HEMA KISHORE JAKKA JAKKA Date: 2026.11.02 17:38:50 +05'30' Assistant Registrar/Sr.PS/PS ITAT, Surat Bench

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