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Facts
The assessee, a primary agricultural co-operative society, filed a belated return of income for AY 2023-24, claiming deduction under Section 80P, which was denied by the CPC under Section 143(1). The assessee appealed to the First Appellate Authority (FAA) with a 200-day delay, arguing that a petition for condonation of delay in filing the return of income was pending with the Competent Authority under Section 119(2)(b). The FAA dismissed the appeal *in limine* without condoning the delay or considering the merits.
Held
The Tribunal first condoned an 11-day delay in filing the appeal before it, finding sufficient reason. It then found that the assessee had a reasonable cause for the 200-day delay before the FAA, as the assessee was pursuing condonation of delay for the return of income itself under Section 119(2)(b). The Tribunal, therefore, condoned the delay before the FAA and restored the matter to the Assessing Officer (AO), directing a fresh order be passed after the Competent Authority decides on the assessee's Section 119(2)(b) petition.
Key Issues
1. Whether the FAA was justified in dismissing the appeal *in limine* without condoning the delay in filing the appeal. 2. Whether the assessee had a reasonable cause for the delay in filing the appeal before the FAA, given a pending condonation petition for the belated return of income under Section 119(2)(b). 3. Whether the claim for deduction under Section 80P should be considered on merits once the delay in filing the return of income is condoned by the Competent Authority.
Sections Cited
250, 80P, 139(1), 143(1), 119(2)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE KAND SHRI S.R. RAGHUNATHA
आदेश /O R D E R
PER GEORGE GEORGE K, VICE PRESIDENT:
This appeal at the instance of the assessee is directed against the order of Addl/JCIT (A)-6, Mumbai dated 31.12.2024, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2023-24.
2. There is a delay of 11 days in filing the appeal. The assessee has filed petition for condonation of delay. On perusal of the same, we find there is sufficient reason for delay in filing this appeal before the Tribunal. Hence, we condone the delay in filing the appeal and proceed to dispose off the appeal on merits.
The assessee is a primary agricultural co-operative society. It filed return of income for assessment year 2023-24 and claimed deduction u/s.80P of the Act. Since the return was filed beyond the period prescribed u/s.139(1) of the Act, the CPC issued an intimation u/s.143(1) of the Act on 02.02.2024 denying the claim of deduction u/s.80P of the Act.
Aggrieved by the intimation issued u/s.143(1) of the Act, the assessee filed appeal before the First Appellate Authority (‘FAA’) with a delay of 200 days. The reasons stated by assessee for delay in filing the appeal before the First Appellate Authority has been captured at pages 2 to 4 of the impugned order of the FAA. In the condonation application, it is stated that assessee had filed a petition before the Competent Authority for condoning the delay in filing the return of income and the same was pending. It was stated that the assessee society was under the bonafide belief that when assessee’s application for condonation of delay is pending consideration, the demand would not be raised. However, since the assessee was directed to pay the outstanding amount in the month of September, 2024, the assessee society was advised to file a statutory appeal and immediately an appeal was filed with a delay of 200 days. The FAA however was not convinced with the reasons stated for delay in filing the appeal before him. The FAA dismissed the appeal in limine without adjudicating the issues on merits.
Aggrieved by the order of the FAA, the assessee has filed the present appeal before the Tribunal. The Ld.AR submitted that the delay in filing the appeal before the FAA was neither willful or deliberate since the assessee was pursuing a remedy to condone the delay in filing the return of income. It was submitted that if the Competent Authority has condoned the delay, necessarily the claim of deduction u/s.80P of the Act has to be considered on merits. It was submitted that since the condonation petition u/s. 119(2)(b) of the Act before the competent authority has direct bearing, the matter may be restored to the files of the AO to await the decision of the Competent Authority on the condonation application filed in terms of section 119(2)(b) of the Act.
The Ld.DR supported the order of the FAA.
7. We have heard rival submissions and perused the material on record. The FAA had dismissed the appeal in limine without adjudicating on merits by not condoning the delay of 200 days in filing the appeal before him. The assessee had received the intimation u/s.143(1) of the Act on 02.02.2024. The assessee had filed application u/s.119(2)(b) of the Act on 14.03.2024 for condonation of delay in filing the return of income. The assessee had approached the Competent Authority u/s.119(2)(b) of the Act within a reasonable period. The assessee’s application for condonation of delay u/s.119(2)(b) of the Act has a direct bearing as regards the claim of deduction u/s.80P of the Act. In event the competent authority condones the delay in filing the return of income filed by the assessee necessarily the claim of deduction u/s.80P of the Act has to be considered on merits by the concerned AO. We are of the view that assessee was pursuing an alternative remedy (within a reasonable period) i.e., filing the condonation application u/s.119(2)(b) of the Act. Therefore, there is reasonable cause for the delay in filing the appeal before the First Appellate Authority. Hence, we condone the delay of 200 days in filing the appeal before the FAA. Since the assessee’s application of condonation of delay in filing the return of income is pending consideration before the Competent Authority, we deem it appropriate to restore the case to AO. The AO is directed to pass afresh order after the Competent Authority has passed the order regarding the assessee’s petition for condonation of delay in filing the return of income. It is ordered accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 5th June, 2025 at Chennai.