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Facts
The assessee, a Co-operative Credit Society, failed to file its return of income and its case was reopened based on information regarding substantial deposits. The Assessing Officer disallowed a deduction claim under Section 80P(2)(d) and treated interest income as 'income from other sources'. The CIT(A) upheld the AO's order for non-compliance.
Held
The Tribunal held that the assessee should be given another opportunity to present its case before the first appellate authority, adhering to principles of natural justice. The issues were remanded back to the CIT(A) for de novo adjudication.
Key Issues
Whether the assessee is entitled to deduction under Section 80P(2)(d) and whether the CIT(A) erred in dismissing the appeal for non-prosecution without considering the merits.
Sections Cited
80P(2)(a)(i), 80P(2)(d), 56, 147, 148, 143(2), 144B, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
(Assessment Year: 2020-21) Jasmin Co-operative Credit Society ITO Ward 3(1) Limited Rani Mansion, Kalyan – 421301. Vs. 6, Joker Plaza, Bail Bazar, Kalyan (West), Thane – 421301. PAN/GIR No. (Assessee) : (Respondent) Assessee by : Shri. Sushant N. Alme Respondent by : Shri. Anil Gupta, Sr. DR. Date of Hearing : 24.02.2025 Date of Pronouncement : 24.02.2025 O R D E R Per Kavitha Rajagopal, J M: These captioned appeals have been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2015-16, 2019-20 and 2020-21.
As the facts are identical in all these appeals, we hereby pass a consolidated order to taking as a lead case.
ITA No. 6825/Mum/2024 (A.Y. 2015-16)
& 6824/Mum/2024; (A.Y. 2019-20 & 2020-21) Jasmin Co-operative Credit Society Ltd. ; (Assessment Year: 2015-16) 3. The assessee has raised the following grounds of appeal: 1. “On the facts and in the circumstances of the case and in law, the Ld. Assessing Officer has failed to appreciate that the appellant is a Co-operative Credit Society exclusively engaged in providing credit facilities to the members and therefore, he was not justified denying the bonafide claim of deduction u/s 80P(2)(a)(i) of the Income Tax Act, 1961 and Ld. CIT(A) also erred in dismissing the Appeal.
2. On the facts and in the circumstances of the case and in law, the Ld. Assessing Officer has failed to appreciate that the Society has made investments of its own funds representing Investment of Reserve Fund and investment of Statutory Liquidity Ratio (SLR) as per the statutory requirements and therefore income on the said investment is not out of surplus funds and therefore it is a Operational Income falling under the head "Income form Business or Profession" and thus eligible for deduction u/s 80P(2)(a)(i) of the Act.
3. On the facts and in the circumstances of the case and in law, the Ld. Assessing Officer has wrongly relied on Hon'ble Supreme Court judgment in the case of Totgar's Co-operative Sale Society vs. Income Tax Officer, Karnataka, (2010) 322 ITR SC and made addition of Interest on Fixed Deposits.
4. On the facts and in the circumstances of the case and in law, the Commissioner of Income Tax (Appeals) has erred in summarily dismissing the Appeal for non- prosecution and failed to apply his mind to the issues without considering the grounds raised in the appeal and statement of facts giving details of bonafide claim while disposing off the Appeal.
5. The Ld. Assessing Officer has made addition of Rs. 18,64,320/- in the Assessment Order passed u/s 147 of the Act however while calculating tax in the Computation Sheet he has wrongly taken taxable income at Rs. 37,28,636/- and therefore there is double taxation on the same income.”.
4. Briefly stated, the assessee is a Co-operative Credit Society registered under Maharashtra Co-operative Societies Act, 1960, engaged in the object of providing credit facilities to the members and accepting deposits from the members. The objectives of the assessee is to inculcate the habit of thrift and saving, self-help and co-operation among the members. The assessee had not filed its return of income for the year under (A.Y. 2015-16)
& 6824/Mum/2024; (A.Y. 2019-20 & 2020-21) Jasmin Co-operative Credit Society Ltd. consideration. The assessee’s case was reopened based on the information received through ‘Insight Portal’ under NMS category, vide notice u/s. 148 pursuant to order u/s. 148A(d) of the Act, dated 08.04.2022, where the assessee is said to have made time deposits Rs. 5,18,05,136/- and cash deposits of Rs. 3,27,25,800/- in its bank account during the year under consideration. Notice u/s. 143(2) of the Act were duly issued and served upon the assessee and then the learned Assessing Officer (ld. A.O. for short) passed the assessment order u/s. 147 r.w.s. 144B of the Act, dated 17.03.2024, where the ld. AO determined the total income at Rs. 18,64,316/-, thereby disallowing the deduction claimed u/s. 80P(2)(d) of the Act, being the interest income earned by the assessee from co-operative banks and other financial institutions and treating the same as ‘income from other sources’ u/s. 56 of the Act 5. Aggrieved the assessee was in appeal before the first appellate authority, challenging the assessment order.
The ld. CIT(A) vide order dated 28.10.2024, upheld the order of the ld. AO, for the reason that the assessee has failed to substantiate its claim and has been non-compliant.
The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the addition/disallowance made by the ld. A.O. before the first appellate authority but has been non-compliant throughout the appellate proceeding.
ITA No. 6825/Mum/2024 (A.Y. 2015-16)
& 6824/Mum/2024; (A.Y. 2019-20 & 2020-21) Jasmin Co-operative Credit Society Ltd.
The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee has got a good case on merit and prayed that the assessee be given one more opportunity to present its case before the first appellate authority.
The learned Departmental Representative (‘ld. DR’ for short) vehemently opposed to setting aside the issue back to the file of the ld. CIT(A) for the reason that the assessee has been given several opportunities which were not availed by assessee before the ld. CIT(A). The ld. DR relied on the orders of the lower authorities.
On the above facts of the case, we are of the considered view that the assessee may be given one more opportunity to present its case before the first appellate authority by adhering to the principles of natural justice and in the interest of justice dispensation. We, therefore, remand all these issues back to the file of the ld. CIT(A) for de novo adjudication. The assessee is directed to comply with the proceedings without any undue delay on its side and needless it is to say that sufficient opportunity of hearing is to be given to the assessee. 12. In the result, the appeal filed by the assessee is allowed for statistical purpose.
(Assessment Year: 2019-20) 13. In the present appeal, the assessee has challenged the order of ld. CIT(A) dated 27.11.2024, on the ground that the ld. CIT(A) has dismissed the appeal filed by the assessee in limine without condoning the delay of 1192 days in filing the appeal before the First Appellate Authority. 14. The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
ITA No. 6825/Mum/2024 (A.Y. 2015-16)
& 6824/Mum/2024; (A.Y. 2019-20 & 2020-21) Jasmin Co-operative Credit Society Ltd.
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the additions made by the ld. A.O. before the first appellate authority but has filed the appeal belatedly with a delay of 1192 days beyond the prescribed period of limitation. The assessee has failed to file an affidavit stating the reason for the delay and hence, the ld. CIT(A) dismissed the appeal in limine holding that the assessee has failed to substantiate the delay with ‘sufficient cause’.
The learned Authorised Representative (ld. AR for short) for the assessee contended that the assessee has got a good case on the merits and prayed that the assessee may be given one more opportunity to present its case before the lower authorities and the ld. AR further proposed to file an affidavit before the ld. CIT(A) stating the reason for the delay and that there was ‘sufficient cause’ for the said delay.
The learned Departmental Representative (ld. DR for short) vehemently opposed to setting aside the issue to the lower authorities for the reason that the assessee was given sufficient opportunity before the ld. AO as well as before the ld. CIT(A) but has not availed of the same. The ld. DR relied on the order of the lower authorities. 18. On the above facts of the case, we are of the considered view that the assessee may be given one more opportunity to present its case before the first appellate authority by adhering to the principles of natural justice and in the interest of justice dispensation. We, therefore, remand this issue back to the file of the ld. CIT(A) for considering the affidavit proposed to be filed by the ld. AR and there upon to decide on the condonation of the delay and to decide the issue on the merits of the case and in accordance with law. The assessee is directed to file an affidavit stating the reason for the inordinate (A.Y. 2015-16)
& 6824/Mum/2024; (A.Y. 2019-20 & 2020-21) Jasmin Co-operative Credit Society Ltd. delay and to cooperate in the appellate proceedings before the ld. CIT(A) without any undue delay on its side. 19. In the result, the appeal filed by the assessee is allowed for statistical purpose.