SHAILESH CO OPERATIVE HOUSING SOCIETY LIMITED,NAVI MUMBAI vs. ASSESSING OFFICER, ITO WARD 28(3)(1), MUMBAI, VASHI NAVI MUMBAI

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ITA 698/MUM/2025Status: DisposedITAT Mumbai08 April 2025AY 2015-2016Bench: SHRI PAWAN SINGH, JUDICIAL MEMBER SHRI GIRISH AGRAWAL (Accountant Member)5 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal before the CIT(A) on the grounds that the assessee was pursuing a bona fide alternative remedy. The Tribunal set aside the CIT(A)'s order and restored the appeal to the CIT(A)'s file for adjudication on merits, allowing the assessee an opportunity of hearing.

What were the facts?

The assessee, a co-operative housing society, earned interest income and claimed deductions under sections 80P(2)(d) and 80P(2)(c). The CPC adjusted the return by not allowing these deductions. The assessee filed a rectification application under section 154, which remained unadjudicated. The appeal to the CIT(A) was filed with a significant delay.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) should be condoned, and whether the CIT(A) should adjudicate the grounds of appeal on merit after condonation.

Which sections of the Income-tax Act were involved?

Section 154,Section 80P(2)(d),Section 80P(2)(c),Section 254(1)

AI-generated summary — verify with the full judgment below

PER PAWAN SINGH, JUDICIAL MEMBER;

1.

The appeal by the assessee is directed against the order passed by the CIT(A), NFAC dated 08.11.2024 for A.Y. 2017-18. Though the assessee has not raised grounds of appeal

as per (Income Tax (Appellate Tribunal) Rules, 1963 however on perusal of statement of fact which is annexed as annexure with Form

36. (appeal form before Tribunal). We find that assesses main grievance relates to deduction of interest income of Rs. 15,04,444/- under section 80P(2)(d) and Rs. 50,000/- under section 80P(2)(c).

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 during the relevant financial year, the assessee earned interest from Saraswat Bank and Maharashtra State Co-operative Bank. Both the Co-operative banks are primarily co-operative society. The assessee claimed deduction of such interest income from both the co-operative banks under section 80P(2)(d).

However, the CPC while processing the return, assessee made adjustment by not allowing such deduction claimed under section 80P(2)(d). The assessee also claimed other deduction of Rs. 50,000/- under section 80P(2)(c) which was on account of interest on fixed deposit with nationalised bank. On receipt of intimation of CPC, the assessee filed application for rectification under section 154 however no action /order was passed by CPC / jurisdictional assessing officer. The assessee filed such application within time limit i.e. on 21.11.2017. The AO / CPC not issued any rectification order. When no response was received on application under section 154, the assessee filed appeal before CIT(A) on 02.02.2024. The assessee also filed application for condonation of delay of 2804 days in filing first appeal. Such fact was clearly stated in Form

35.

The application of assessee for condonation of delay was dismissed by taking view that assessee furnished innovative and routine petition for condonation of huge delay without supporting evidence. Thus, the appeal of the assessee was dismissed as unadmitted. The ld. AR for the assessee submits that assessee was perusing alternative remedy in a bona fide manner before CPC/AO by filing application for rectification. The CPC was not empowered to make such adjustment / addition. The ld. AR of the assessee submits that even otherwise he has good case on merit, as the Co-ordinate Benches of Tribunal in a serious of decision as well Various High Courts has consistently held that co-operative banks are primarily and co-operative society and interest earned from such co-operative bank are eligible for deduction under section 80P(2)(d).

The assessee is also eligible for deduction of interest earned from nationalised bank. The ld. AR of the assessee submits that delay in filing appeal before CIT(A) may be condoned and matter may be adjudicated on merit in view of the series of decision wherein co-operative banks are considered as co-

3.

On the other hand, learned senior departmental representative (Sr. DR) for the Revenue supported the order of lower authorities. The ld. Sr. DR for the Revenue submits that assessee failed to disclose reasonable cause for condoning of huge delay of 2804 days in filing appeal before ld CIT(A). The ld. Sr. DR for the revenue submits that as the appeal of assessee was not admitted by first appellate authority, thus in case these benches of the view that delay before CIT(A) deserve to be condoned, the matter may be restored back to the file of CIT(A) or adjudication of grounds of appeal on merit.

4. We have considered the submissions of both the parties and have gone through the orders of lower authorities. Firstly, we are considering the plea of condonation of delay before CIT(A) in filing the appeal. We find that assessee has filed an affidavit of Jayesh Bhaskar Mhatre, Secretary of assessee society.

In the affidavit, the assessee society clearly stated that they had filed an application for rectification with assessing officer was not adjudicated till date.

Such fact that rectification application is filed before CPC/ AO is not controverted by the revenue. Thus, we find convincing force in the submission of ld. AR of the assessee that they were perusing alternative remedy.

Considering the facts of the case, when the assessee was perusing alternative remedy, we find that assessee has shown prima facie reasonable cause for condonation of delay which requires consideration. Thus, keeping in view, jurisprudence on law of limitation that when technical consideration is pitted against the cause of justice, the cause of substantial justice may be preferred.

Thus, keeping in view of such principle the delay in filing the appeal before CIT(A) is condoned and the order passed by ld CIT(A) dated 08.11.2024 is set aside. Now adverting to the merit of the case.

5.

We find that the ld. CIT(A) had not adjudicated ground of appeal raised by assessee on merit, therefore, we deem it appropriate to restore the grounds of appeal raised by the assessee to the file of CIT(A) for deciding all the issue in accordance with law. Needless to direct that before passing the order on merit, the ld. CIT(A) shall allow reasonable opportunity of hearing to the assessee.

The assesse is also directed to be more vigilant in future in making timely compliance and not to take any further adjournment without any valid reason and to provide of necessary information and detail to ld. CIT(A).

6.

In the result, the grounds of appeal raised by the assessee are allowed for statistical purpose.

Order pronounced in the open Court on 08/04/2025.

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