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Facts
The assessee claimed a deduction of Rs. 42,71,007/- under section 80P(2)(d) for interest earned from co-operative banks. The CPC disallowed this deduction during intimation processing under section 143(1). The assessee's appeal to the CIT(A) was dismissed in limine due to a delay in filing.
Held
The Tribunal condoned the 799-day delay in filing the appeal before the CIT(A), deeming it not intentional or deliberate, prioritizing substantial justice. On merits, the Tribunal found that disallowance under section 143(1)(a) was not permissible for AY 2020-21, and interest income from co-operative banks is eligible for deduction under section 80P(2)(d).
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned, and whether interest earned by a co-operative bank from other co-operative banks is eligible for deduction under section 80P(2)(d) for AY 2020-21.
Sections Cited
80P(2)(d), 143(1), 143(1)(a), 10AA, 80IA, 80IAB, 80IB, 80IC, 80ID, 80IE
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PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by the assessee is directed against the order passed by the CIT(A) dated 27.12.2024 for A.Y. 2020-21. Though, the assessee has raised multiple grounds of appeal
, however, in our considered view, the substantial ground of appeal relates to disallowance u/s 80P(2)(d) of Rs. 42,71,007/-.
2. The rival submissions of both the parties have been heard and record perused. The learned authorised representative (ld.AR) of the assessee submits that while filing return of income for AY 2020-21, the assessee claimed deduction of Rs.42,71,007/- under section 80P(2)(d) of the Act on account of interest received from co-operative banks, which includes interest on fixed deposit with Maharashtra State Cooperative Bank, Mumbai, District Cooperative Bank and Azara Urban Co-operative Bank. The CPC while processing return of income not allowed such deduction. The intimation Lok Everest Co-Op HSG Limited under section 143(1) dated 23.12.2021 was sent to the assessee. The assessee immediately filed an application for rectification in the order dated 23.12.2021. However, no order on rectification was not communicated to the assessee by CPC. The office bearer of the assessee- society was changed many times. The officer bearer of assessee-society came to know only on 16.02.2024, while filing appeal for AY 2014-15 & 2015-16 before Tribunal that their application for rectification has been decided by CPC on 29.12.2021. the assessee immediately filed appeal before CIT(A) with the application of condonation of delay. The ld CIT(A) not condoned the delay and dismissed appeal in limine. All such facts are recorded by ld. CIT(A) in his order. The ld AR of the assessee submits that the delay in filing appeal before ld CIT(A) was neither intentional nor deliberate. The assessee was persuing remedy by filing application for rectification in a bonafide way. The assessee is not going to be benefitted in filing appeal belatedly. The ld AR of the assessee submits that delay in filing appeal before ld CIT(A) may be condoned and the appeal may be considered on merit.
On merit of the grounds of appeal, the ld AR of the assessee submits that grounds of appeal are covered in favour of the assessee and against the revenue by the decision of this Tribunal in assesses own case for AY 2014-15 & 2015-16 in & 704/ Mum/2024 dated 28.06.2024. The Tribunal while deciding the appeal in favour of the assessee held that there was no provisions for making disallowance under section 143(1)(a) because disallowance was permissible with regards to section 10AA, 80IA, 80IAB, 80IB, 80IC, 80ID or section 80IE. It was only by way of Finance Act 2021, Lok Everest Co-Op HSG Limited w.e.f. AY 2021-22, such adjustment is permissible under Chapter VIA. Present appeal relates to AY 2020-21; therefore, the issue is covered in favour of the assessee. Even otherwise, in a series of decision by this bench, it has been consistently held that co-operative banks are primarily a co- operative society and the interest received from such co-operative bank are eligible for deduction under section 80P(2)(d) to support its submission.
4. On the other hand, learned senior departmental representative (Sr. DR) for the Revenue on the issue of condonation of delay opposed the plea of ld AR of the assessee and submits that the assessee is relying on self-serving story which is not supported with any evidence. The delay may not be condoned. On merit, the ld Sr DR for the revenue submits that the assessee has not furnished the details of interest from different co-operative Banks, thus, in case the delay is condoned the matter may be restored back to the file of ld CIT(A) for considering it on merit.
5. We have considered the submissions of both the parties and have gone through the orders of lower authorities. We have also deliberated on the order of Tribunal relied upon by the learned AR of the assessee. We find that appeal of the assessee was not admitted as it was dismissed in limine by not condoning the delay in filing appeal. On considering the submissions of the ld AR of the assessee and the facts that the assessee tried to avail the remedy by filing application for rectification before CPC and was under bonafide belief of that CPC will rectify the adjustment. We find that there was no intentional or deliberate delay in filing appeal before ld CIT(A), therefore, keeping in view the principal of law that when technical consideration and cause of Lok Everest Co-Op HSG Limited justice are pitted against each other, the cause of substantial justice may be preferred. Hence, the delay of 799 days in filing appeal before ld CIT(A) is condoned. Now adverting to the merit of the case.
We find that coordinate bench of this Tribunal in assesses own case for AY 2014-15 & 2015-16 in & 704/ Mum/2024 dated 28.06.2024 held that there was no provisions for making disallowance under section 143(1)(a) because disallowance was permissible with regards to section 10AA, 80IA, 80IAB, 80IB, 80IC, 80ID or section 80IE. It was only by way of Finance Act 2021, w.e.f. AY 2021-22, such adjustment is permissible under Chapter VIA. We find that present appeal relates to AY 2020-21; therefore, the grounds of appeal
is primarily covered in favour of the assessee. Even, on merit we find that grounds of appeal raised by the assessee is in fact covered by a series of decision by this Bench as well as other Co-ordinate Benches of Tribunal wherein it has been consistently held that Co-operative Banks are primarily co-operative society and the interest or dividend earned from such Co- operative Bank are eligible for deduction under section 80P(2)(d). Similar View was taken by Gujarat High Court in Surat Vankar Sahakari Sangh Ltd (2016) 72 taxmann.com 169 (Guj), Allahabad High Court in UP Cooperative Sugar Factories (2013 17 taxmaann.com
58. (All), Punjab & Haryana High Court in Haryana Co-operative Sugar Mills (1989)
46. Taxman
28. (P & H).
7. However, the details of interest earned from various Co-operative bank is not available on record. The assessee has neither filed details of computation of total income or bifurcation of interest earned from cooperative society or cooperative banks. Therefore, we direct the jurisdictional Assessing Officer