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Facts
The assessee, a co-operative society, declared Nil income and claimed interest income as exempt under Section 80P(2)(d). The CPC disallowed this claim and issued intimation under Section 143(1). The assessee filed rectification applications, which were rejected, leading to appeals before the CIT(A) with a delay.
Held
The Tribunal held that the assessee had valid reasons for the delay in filing appeals before the CIT(A) due to approaching the wrong forum (CPC) initially. Therefore, the delay was condoned, and the CIT(A)'s order of dismissing the appeals on limitation was set aside.
Key Issues
Whether the delay in filing appeals before the CIT(A) is liable to be condoned on account of the assessee's initial action of filing rectification applications before the CPC.
Sections Cited
80P(2)(d), 143(1), 154
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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
These are the appeals filed by the assessee challenging the separate orders of the Ld.Addl/JCIT(A)-7, Kolkata both dated 21/01/2025 in respect of the A.Ys. 2014-15 and 2021-22.
& 1101/Bang/2025 2. Both these appeals are related to the same assessee and the issue involved in both the appeals are similar and therefore we decided to take up both the appeals together and pass a common order for the sake of convenience.
We will take up the appeal in A.Y. 2014- 15 as the lead case and the result arrived in the said appeal will apply mutatis mutandis to the appeal in for A.Y. 2021- 22.
The assessee filed an application to condone the delay of 43 days in filing these appeals before this Tribunal and submitted that because of the earlier consultant’s, who had filed the appeals before the Ld.CIT(A), ill advice the delay has been occurred and therefore the governing body of the assessee decided to change the said AR while filing these appeals before this Tribunal. The governing body of the assessee met and deliberated the issue on various dates and thereafter they took a decision that the then AR should be changed and therefore the delay has been occurred. The assessee also submitted that the then AR had not followed up the appeal before the Ld.CIT(A).
We have considered the said submissions and we have satisfied that the assessee had valid reasons for not approaching this Tribunal in time and therefore we condone the said delay of 43 days in filing the appeal and proceeded to adjudicate the issue on merits.
The brief facts of the case are that the assessee is a co-operative society and they filed their return of income declaring Nil income and claimed the interest income as exempt u/s. 80P(2)(d) of the Act. The CPC while processing the said return, had disallowed the said claim of deduction and an intimation u/s. 143(1) of the Act was issued on 02/08/2016 in respect of A.Y. 2014-15 and on 02/11/2022 in respect of A.Y. 2021-22. Based on the advice given by the then Ld.AR, the rectification applications & 1101/Bang/2025 were filed before the CPC on 22/12/2016 and 30/11/2022. The assessee not known the result of the said application filed for the A/Y 2014-15. The Ld CPC had rejected the application in respect of the A/Y 2021-22 on 24/02/2023. Thereafter the assessee filed applications on 02/11/202315. The ITO rejected the said application on 09/11/2023 for the A/Y 2014-15 and on 16/01/2024 for the A/Y 2021-22. Thereafter the assessee based on the advice of the new AR, filed the appeals before the Ld.CIT(A) and filed application to condone the said delay. In the delay condonation application, the assessee had explained the reasons for the delay and prayed the Ld.CIT(A) to condone the delay and decide the appeal on merits.
The Ld.CIT(A) without considering the reasons stated by the assessee, had dismissed the appeals on the ground of limitation.
As against the said orders, the assessee is in appeal before this Tribunal.
At the time of hearing, the Ld.AR submitted that the intimation u/s. 143(1) was issued without giving any notice to the assessee. The Ld.AR further submitted that the assessee had diligently followed up the intimation sent by the CPC and approached the CPC by filing a rectification application which was disposed of on 09/11/2023 and 16/01/2024 and thereafter the appeals were filed before the Ld.CIT(A) within the period of 30 days. Therefore, the Ld.AR submitted that the assessee had approached the authority u/s. 154 of the Act and therefore the period of pendency should be excluded while calculating the period of delay in filing the appeal before the Ld.CIT(A) and submitted that if the said periods were excluded, the appeals are in time.
The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeals since there was inordinate delay.
& 1101/Bang/2025 11. We have heard the arguments of both sides and perused the materials available on record.
We have also perused the documents filed in the paper book from which it is evident that the assessee had taken action on the intimation u/s. 143(1) of the Act immediately. The reasons stated for filing the rectification application is that the then authorised representative had advised the assessee to file rectification applications instead of filing the appeals before the Ld.CIT(A). The assessee also genuinely believed the advice of the then Ld.AR and filed the rectification applications on 22/12/2016 and 02/11/2023 for the A/Y 2014-15 and on 30/11/2022 and 02/11/2023 for the A/Y 2021-22 before the CPC which were disposed of on 09/11/2023 and 24/02/2023. Thereafter, not satisfied with the performance of the then Ld AR, the new authorised representative was engaged by the assessee and the appeals were filed before the Ld.CIT(A) on 10/11/2023 and 06/02/2024 respectively and explained the reasons for such delays.
We have gone through the submissions made by the assessee and the various documents filed in support of their submissions and we found that the assessee had approached the CPC by filing rectification applications instead of approaching the appellate authority and therefore the said delays were occurred. The approaching of a wrong forum and the consequential delay is a valid reason for condoning the said delays. The various High Courts had accepted the said reasons and condoned the said delays in filing the appeals.
We, therefore, find that the order of the Ld.CIT(A) in not condoning the said delays are not correct. In fact, the Ld.CIT(A) had not considered the materials placed by the assessee to show that the assessee had approached the CPC by filing the rectification applications while passing the orders. We, are of therefore of the view that the assessee having valid reasons for not approaching the Ld.CIT(A) in time and therefore the said delays occurred & 1101/Bang/2025 before the Ld.CIT(A) must be condoned. We have also perused the order of this Tribunal in the assessee’s own case for the year 2016-17 in in which the deduction u/s 80P(2)(d) was allowed in similar facts and circumstances of the case.
We, therefore, set aside the orders of the Ld.CIT(A) and restore the appeals to him for deciding the issue afresh after hearing the assessee. We are giving this concession on condition that the assessee should pay a cost of Rs 10,000/ for each assessment year to the Income Tax Department and produce the receipt before the Ld CIT(A) while adjudicating the appeal.
In the result, both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on 28th August, 2025.