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Facts
The assessee, a housing cooperative society, declared an income of Rs. 6,30,000/-, but its return was processed u/s 143(1) by CPC, assessing income at Rs. 54,69,700/- by disallowing Rs. 48,39,696/- as deduction u/s 80P(2)(d) for interest income from cooperative banks. The assessee filed a belated appeal with a delay of 407 days before the Ld. CIT(A), who dismissed it without condoning the delay or discussing the merits.
Held
The Tribunal found that the assessee had a reasonable cause for the delay. It set aside the CIT(A)'s order and remanded the matter back to the CIT(A) with a direction to condone the delay and decide the appeal on its merits after providing a reasonable opportunity of hearing to the assessee.
Key Issues
1. Whether the CIT(A) erred in dismissing a belated appeal without condoning the delay and without discussing the merits. 2. Whether interest income earned by a cooperative society from cooperative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act.
Sections Cited
80P(2)(d), 143(1)
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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI DR. DIPAK P. RIPOTE & SHRI VINAY BHAMORE
Assessment Year : 2021-22 Lunkad Sky Vie Co- Vs. ITO, Ward-7(3), Pune. operative Housing Society Limited, S. No.211, H. No.312, Lunkad Sky Vie, Lohegoan, Vimannagar, Pune- 411014. PAN : AAAAL8573A Appellant Respondent Assessee by : Shri Kishor B. Phadke Revenue by : Shri Ramnath P. Murkunde Date of hearing : 12.08.2025 Date of pronouncement : 26.08.2025 आदेश / ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 14.05.2024 passed by Ld. Addl./JCIT(A)-1, Vadodara [‘Ld. CIT(A)’] for the assessment year 2021-22.
The appellant has raised the following grounds of appeal :- “(All grounds are on an alternate and without prejudice basis to each other)
1. The learned ADDL/JCIT (A)-1 Vadodara (hereafter referred to as CIT(A)) erred in law and on facts in confirming the total income of the appellant at Rs. 54,69,700/- instead of Rs. 6,30,000/- by disallowing deduction u/s 80P(2)(d).
2. The learned CIT(A) erred in law and on facts in passing an appellate order without entering into merits and without granting an appropriate opportunity for hearing thus violating the principle of natural justice. Learned CIT(A)-NFAC ought to have condoned the delay in filing the appeal as the delay was due to genuine hardship faced by the appellant.
The learned CIT(A) erred in laws and on facts in sustaining the disallowance of the deduction of Rs. 48,39,696 u/s 80P(2)(d) of the ITA, 1961 made by the learned ACIT-CPC and the same as interest income derived from its investments held with various Co-operative banks and other financial institutions.
The learned I-T Authorities erred in law and on facts in not appreciating the Supreme Court in the case of The Mavilayi Service Co-Operative Bank Ltd. & ORS. Vs. Commissioner of Income Tax (2021) 431 ITR 1 (SC) has held that interest earned by a Co-operative Society from a Co-operative bank is entitled for deduction u/s. 80P(2)(d) of ITA, 1961.
5. The learned I-T Authorities erred in law and on facts in not appreciating that the interest on deposits with co-operative bank, are covered under the concept of "mutuality" and hence not taxable.
Appellant craves leave to add/alter/modify/amend/delete all or any of the grounds of appeal
.”
3. Facts of the case, in brief, are, that the assessee is a housing cooperative society furnished its return of income on 14.03.2022 as per extended due date vide Circular No.1 dated 11.01.2022 till 15.03.2022 declaring total income of Rs.6,30,000/-. The return of income was processed u/s 143(1) of the IT Act by CPC on 02.11.2022 at an income of Rs.54,69,700/-. The above assessed income includes addition of Rs.48,39,696/- on account of 80P(2)(d) of the IT Act made by CPC as against the income returned by the assessee at Rs.6,30,000/-.
4. Aggrieved with the above 143(1) order, the appeal was furnished belatedly i.e. with the delay of 407 days before first appellate authority, however, without condoning the said delay, Ld. CIT(A) dismissed the same without discussing the merits of the case.
It is this order against which the assessee is in appeal before this Tribunal.
6. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. It is the contention of Ld. AR that the petition for condonation of delay was furnished before Ld. CIT(A) wherein all the reasons were mentioned due to which the appellant could not file the appeal within the prescribed time limit. In support of this contention, Ld. AR draw our attention to page no.7 to 18 of Ld. CIT(A)’s order wherein the application for condonation of delay and written submission with regard to merits of the case have been reproduced by Ld. CIT(A). On the basis of above, Ld. AR contended before the Bench that it was wrong on the part of Ld. CIT(A) to observe in his order that the appeal has been dismissed on the ground of rejection of petition for condonation of delay and in absence of submission. Accordingly, Ld. AR requested before the Bench to set-aside the order passed by Ld. CIT(A).
On the other hand, Ld. DR relied on the orders passed by the subordinate authorities and requested to confirm the same.
Considering the totality of the facts of the case, we find force in the above arguments of Ld. Counsel of the assessee that the assessee was prevented by reasonable cause for not furnishing the appeal within time before Ld. CIT(A). Therefore, we deem it appropriate to set-aside the order passed by Ld. CIT(A) and restore the matter back to the file of Ld. CIT(A) with a direction to condone the delay and decide the appeal on merits of the case as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A) in this regard and produce submissions/evidences/documents in support of grounds of appeal without taking any adjournment under any pretext, otherwise Ld. CIT(A) shall be at liberty to pass appropriate order as per law.