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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI KULDIP SINGH
Per : Kuldip Singh, Judicial Member:
The appellant, M/s. Mittal Park Co-operative Housing Society Ltd. (hereinafter referred to as ‘the assessee’) by filing the present appeal, sought to set aside the impugned order dated 06.04.2022 passed by the National Faceless Appeal Centre (NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment year 2015-16 on the grounds inter alia that::- “1. The Honourable Commissioner of Income Tax- (Appeal), NFAC, Delhi, [Hon. CIT-(A)] has erred on the fact and in the circumstances of the case and in the law declining to condone the delay in filing the appeal.
Hon. CIT-(A) has erred on the fact and in the circumstances of the case and in the law in denying the deduction under section 2 M/s. Mittal Park Co-operative Housing Society Ltd. 80P(2)(d) of the Income Tax Act 1961 ("The Act") in respect of bank interest earned from co-operative banks.
The Hon. CIT-(A) has erred on the fact and in the circumstances of the case by dismissing the appeal without deliberating the main issue.
4. The Hon. CIT-(A) on the fact and in the circumstances of the case erred in ignoring the merits of the assessee's case. It is submitted that the assessee was entitled to the deduction under section 80P(2)(d) of the Act.
5. The Hon. CIT-(A) failed to appreciate that in the fact and the circumstances of the case, there cannot be a situation where the assessee is not serious, particularly when it substantially hits the appellant financially where the tax liability quantified was Rs.9,56,130/-.
6. That the appellant craves leave to add, amend, alter, and delete any of the grounds of appeal
before the hearing.”
2. Briefly stated facts necessary for adjudication of the controversy at hand are: assessee being a co-operative housing society registered under Maharashtra Co-operative Society Act, 1960 filed the return declaring total income at Nil, which was processed under section 143(1) of the Act. In the intimation issued AO disallowed the interest earned by the assessee on its surplus funds parked with the co-operative bank under section 80P(4) of the Act to the tune of Rs.25,74,810/- and thereby framed the assessment.
3. Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has dismissed the appeal on the ground that the appeal has been filed beyond the prescribed period of limitation, by dismissing the application for condonation of delay, that too without deciding the merits of the case.
We have heard the Ld. Authorised Representatives of the parties to the appeal, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light 3 M/s. Mittal Park Co-operative Housing Society Ltd. of the facts and circumstances of the case and law applicable thereto.
At the very outset, it is brought to the notice of the Bench that there is a delay of Rs.1337 days in filing the present appeal before the Tribunal. The assessee by filing application sought to condone the delay on the grounds inter alia that M/s. Anantram & Co., Chartered Accountant was appointed by the assessee society to look after the income tax matters who has registered himself on behalf of the assessee society on portal of the Income Tax Department by procuring a logging ID and a password by submitting his mobile number and email ID; that services of the said statutory auditor were terminated with effect from 2018 due to gross negligence in handling taxation matters; that the said tax consultant failed to change the mobile number and email ID in the Income Tax portal thus appeal could not be filed in time; that assessee came to know about the assessment order on receipt of demand and the newly appointed consultant filed the rectification application under section 154 of the Income Tax Act, 1961 (for short ‘the Act’) which is still pending; that delay in filing appeal is neither intentional nor due to negligence of the society.
However, on the other hand, the Ld. D.R. for the Revenue in order to repel the arguments addressed by the Ld. A.R. for the assessee relied upon the order passed by the AO as well as the Ld. CIT(A).
Keeping in view the averments made by the assessee society in the application supported with affidavit, I am of the considered view that when assessee society was solely dependent upon the tax consultant who has breached his statutory duties by not filing the 4 M/s. Mittal Park Co-operative Housing Society Ltd. rectification application or appeal as the case may be and assessee society came to know about the assessment order only on receipt of the demand notice, to my mind it is a sufficient cause to condone the delay by the Ld. CIT(A). In case of Land Acquisition Collector vs. MST Katiji & Others 167 ITR 471 (SC) the Hon’ble Supreme Court has held, “it is on contention of delay that when substantial justice and technical considerations are pitted against each other, the case of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non deliberate delay.”
In view of the matter, delay in filing the appeal before the Ld. CIT(A) is ordered to be condoned. Further, the Ld. CIT(A) has not decided the issue on merits; “as to whether disallowance made by the AO under section 80P(2)(d) of the Act made by the AO is sustainable in the eyes of law?”
So to decide the issue once for all and to curtail the multiplicity of the proceedings this case is remitted back to the Ld. CIT(A) to decide afresh on merits after providing opportunity of being heard to the assessee in light of the decision rendered by the Tribunal in case of The Sarvoday Co-operative Credit Society Ltd. vs. ITO in for A.Y. 2017-18 order dated 21.06.2022. Consequently, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 20.10.2022.