EKTA SAHAKARI PATPEDHI MARYADIT,VIRAR vs. INCOME TAX OFFICER, ASSESSMENT UNIT, NEW DELHI
IN THE INCOME-TAX APPELLATE TRIBUNAL “E” BENCH,
MUMBAI
BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER
&
SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER
Ekta
Sahakari
Patpedhi
Maryadit
Shirlay
–
Agashi
Near
Shirlay
Church,
Post
–
Agashi Tal – Vasai Palghar,
401301, Maharashtra v/s.
बनाम
Income
Tax
Officer,
Assessment
Unit,Ward
–
4(4),Ashar IT Park, Road No.
16/Z,
Nehru
Nagar,
Wagle
Industrial Estate, 400 604,
Maharashtra
स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAAAE2886M
Appellant/अपीलार्थी
..
Respondent/प्रतिवादी
Appellant by :
Shri Bhupendra Shah,AR
Respondent by :
Shri Manish Ajudiya (Sr. DR)
Date of Hearing
03.03.2025
Date of Pronouncement
10.03.2025
आदेश / O R D E R
PER PRABHASH SHANKAR [A.M.] :-
The above captioned appeals have been filed by the assessee against the orders by the Learned Commissioner of Income-tax
(Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to the order passed u/s. 143(3) of the Income- tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Years
[A.Y.] 2018-19 and 2020-21. Since the issues are common and P a g e | 2
ITA No. 105 & 106/Mum/2025
A.Y. 2018-19& 2020-21
Ekta Sahakari Parpedhi Maryadit interlinked, these appeals are being taken up together for adjudication vide this composite order for the sake of brevity.
2. At the outset, it may be stated here that there is delay exceeding
300 days in filing this appeal for both the years. As per affidavit of on record and oral submissions made by the ld.AR, it is pleaded that the delay was mainly on account of the fact that wife of the Chairman who is also one of the directors is suffering from lung cancer which requires regular follow up, treatment and therapy and the Chairman who looks after all legal matters could not take immediate decision and resultant delay in appointment of consultant. After his appointment, the CA was also suffering from various illnesses because of which he also could not look after the regular work. All these reasons resulted in delay. There is no malafide intention not any advantage available to the assessee by causing such delay which may be condoned.
3. We have duly considered the issue and find some merit in the contentions. We have also gone through medical documents filed in support of the above submissions. However, it is equally true that there is substantial delay in both the years which also indicates some element of carelessness on part of the assessee who must have other persons in responsible position to look after income tax issues. It is the fundamental duty of the assessee to diligently pursue the appeal and P a g e | 3
ITA No. 105 & 106/Mum/2025
A.Y. 2018-19& 2020-21
Ekta Sahakari Parpedhi Maryadit comply with the notices and proceedings initiated by the Revenue authorities. The framework of the Act rely heavily on the co-operation and active participation of the taxpayer. The principles of natural justice operate both ways, while the Revenue authorities are required to provide a reasonable opportunity of being heard, the taxpayer is equally obligated to co-operate with the authorities and utilize the opportunities extended. In the present case, despite receiving adequate opportunities, the assessee displayed a casual approach and indifference, which not only delayed the appellate proceedings but also burdened the judicial system. Such conduct cannot be overlooked.
3.1 In light of the non-compliant attitude of the assessee, levy of cost needs to be evaluated in this case as cost serves as a necessary deterrent to ensure that taxpayers act with due diligence in pursuing their appeals and respecting the timelines and processes laid down under the law. Moreover, considering assessee’s non-compliant and non-cooperative attitude and lack of diligence in pursuing the appeal, we impose on the assessee a cost of Rs.12,500/- each aggregating to Rs
25,000/-for both the above appeals. The cost shall be deposited to the credit of the Income Tax Department within 15 days of the receipt of this order.
P a g e | 4
ITA No. 105 & 106/Mum/2025
A.Y. 2018-19& 2020-21
Ekta Sahakari Parpedhi Maryadit
We first take up appeal in ITA No. 105/MUM/2025 (A.Y. 2018-19).The grounds appeals are as under:- 1. In the facts and circumstances of the case and in law, the learned A.O. erred in denying deduction u/s 80P(2)(a)(i) amounting to Rs. 1,68,52,014/- thereby wrongly treating the Appellant a Cooperative Bank instead of Cooperative Society and overlooking the fact that the deduction u/s 80P(2)(a)(i) was allowed in the previous years including AY 2017-18. 2. In the facts and circumstances of the case and in law, the learned A.O. erred in denying deduction u/s 80P(2)(d) amounting to RS 42,56,170/- a. by way of income from other sources in respect of interest earned on fixed deposit with Co-operative bank and b. also overlooking the fact that debatable addition cannot be sustained u/s 143[1]. 3. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax(A) erred in confirming the same by rejecting written submissions and several judgments cited before him and also overlooking the fact that debatable addition cannot be sustained u/s 143[1] in case of deduction u/s 80P(2)(d). 4. In the facts and circumstances of the case and in law, the learned A.O. erred in wrong charging interest u/s 234A, B & C and levying penalty u/s 270A. 5. Facts of the case in brief are that the assessee is a Cooperative Credit Society registered under the Maharashtra Co- Operative Societies Act 1960, carrying on banking business and providing banking facilities to its members. It accepts deposits from its members and gives loan to its members. The assessee filed return of income for the AY 2018-19 disclosing gross total income of Rs.2,11,86,994/- and have claimed deduction under chapter VIA of Rs.2,11,08,184/-comprising of deductions u/s 80P(2)(a)(i) of Rs.1,67,43,337/- and 80P(2)(d) of Rs. 43,14,847/-respectively. The Ld. AO disallowed the deductions.
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ITA No. 105 & 106/Mum/2025
A.Y. 2018-19& 2020-21
Ekta Sahakari Parpedhi Maryadit
In so far as the claim of deduction u/s 80P(2)(a)(i), the AO held that in view of the provisions of section 80P(4),the assessee being engaged in banking activity was not eligible for deduction although it was observed that there is no dispute about the fact that the assessee is carrying on the business of accepting deposits and advancing loans albeit from and to its members. The assessee society is doing the business of accepting deposits and giving credit facilities to its members like all other cooperative banks and credit societies. According to him, plain reading of the above provisions indicates that they are applicable to all co-operative banks except a primary agricultural credit society or a primary cooperative agricultural and rural development bank. The assessee society is neither a primary agricultural credit society nor a primary cooperative agricultural and rural development bank. He further relied on the Explanation to the section and also explanatory notes to the Finance Act,2006 which pertained to withdrawal of 80P deduction to certain co-operative banks. He thus held that the assessee is not a primary agricultural credit society or a primary co-operative agricultural and rural development bank. It is a urban co-operative society and engaged in banking business. Therefore, in view of the legal provisions mentioned above, the provisions of Section 80P(4) were clearly applicable to the assessee. The explanatory note and the new sub-
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ITA No. 105 & 106/Mum/2025
A.Y. 2018-19& 2020-21
Ekta Sahakari Parpedhi Maryadit clause (viia) quoted above also clearly indicates that a cooperative society providing credit facilities to its members is also covered by the amended provisions of the Act. Hence the activities of the assessee were akin to that of finance business rather than a cooperative society. Hence, it is held that the assessee not eligible for deduction u/s 80P.It was concluded that the assessee earned interest and dividend income on funds invested in Scheduled Banks /Financial Institute which were not required for business purposes at the given point of time. Therefore, could not be said to be attributable either to the activity mentioned in Section 80P(2)(a)(i) r.w.a 80P(4) of the Act or in Section 80P(2)(d) of the Act . Therefore, looking to the facts and circumstances of this case, the deduction claimed by the assessee u/s 80P(2) of the Act amounting to Rs.2,11,08,184 /- was disallowed.
7. In the subsequent appeal before the ld.CIT(A), the assessee contented that it was registered Co-op. Society registered with Department of Cooperation Maharashtra State vide Registration
Number. Being the registered Society, it has own byelaws which are also approved by the