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Facts
The assessee, a co-operative society, filed an appeal with a delay of 157 days. The assessee's appeal was dismissed by the CIT(A) due to non-compliance in submitting grounds of appeal, despite multiple opportunities. The assessee claimed a deduction under Section 80P for AY 2020-21, which was partially disallowed by the AO.
Held
The Tribunal condoned the delay in filing the appeal, considering the reasons provided and the principle of substantial justice. The Tribunal set aside the order of the CIT(A) and restored the matter back to the CIT(A)'s file for fresh adjudication on merits, allowing one final opportunity to the assessee.
Key Issues
Whether the delay in filing the appeal can be condoned, and whether the matter should be remanded to the CIT(A) for adjudication on merits after the appeal was dismissed for non-compliance.
Sections Cited
80P(2)(d), 80P, 80P(4), 143(3), 144B, 270A, 143(1), 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आयकर अपील सं. / Assessment Year : 2020-21 Karmaveer Bhausaheb Hiray Nashik Jillha Assessment Unit Krishi Audyogik Sahakari Sangh Ltd., Krishi Bhavan, Dwarka, Mumbai Agra Road, Vs. Maharashtra-422011 PAN : AAAAN2343N अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Charuhas Dwarkanath Upasani Department by : Shri Ramnath P Murkunde Date of hearing : 08-07-2025 Date of 14-08-2025 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 22.07.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Year (“AY”) 2020-21.
There is a delay of 157 days in filing of this appeal before the Tribunal for which the assessee has filed an application for condonation of delay along with a sworn affidavit explaining the reasons for such delay. On perusal of the same, we are satisfied that the delay in filing of appeal is not intentional or deliberate but has occurred for the reasons mentioned in the affidavit. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. 2.1 We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 2.2 We find recently the Hon'ble Supreme Court in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339 has held as under: “14. There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation.”
2.3 Considering the totality of facts and in the circumstances of the case and respectfully following the above decision(s) of the Hon'ble Supreme Court, we hereby condone the delay in filing of the appeal and admit the same for adjudication.
The assessee has raised the following grounds of appeal:- “1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not granting 80P(2)(d) deduction on the interest earned and dividend received from the cooperative banks and cooperative societies to the appellant who is also a cooperative society.
2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that the appellant is a cooperative society registered under the Maharashtra state co-operative societies Act, 1960 and is eligible for deduction U/s 80P.
3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not considering Income from House Property for set off of current year losses from Income from Business.
4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in invoking the provisions of Sec. 80P(4) for the appellant society.
5. The assessee craves liberty to add, alter or amend any ground/ grounds of appeal.”
4. Briefly stated the facts are that the assessee is a Co-operative Society. For AY 2020-21, it filed its return of income on 04.12.2020 declaring total income of Rs. Nil. The assessee showed – (i) income from house property of Rs.35,97,139/-, (ii) loss under the head Business and Profession of Rs.78,36,255/- and (ii) income from other sources of Rs.1,51,09,923/-. Out of the income declared by assessee under the head income from other sources, the assessee claimed deduction of Rs.1,50,41,447/- u/s. 80P(2) of the Income Tax Act, 1961 (the “Act”). The return was processed u/s. 143(1) on 20.04.2021 accepting the returned income. Subsequently, the case of the assessee was selected for complete scrutiny through CASS with the reason "Large business loss set off against other heads of income and deduction from total income under chapter-VI A". Accordingly, statutory notice(s) u/s. 143(2) and 142(1) of the Act along with questionnaire were issued and duly served upon the assessee. In response to the said notice(s), the assessee e-filed its reply from time to time. The Ld. Assessing Officer (“AO”) thereafter issued a show cause notice proposing a variation in the returned income to the tune of Rs.1,50,41,447/- on account of disallowance of deduction claimed u/s 80P(2) of the Act. As the assessee failed to submit its reply / supporting evidences in response to the above show cause notice, the Ld. AO proceeded to complete the assessment u/s 143(3) r.w.s. 144B of the Act on 19.09.2022 by making an addition of Rs.1,08,70,807/- to the „Nil‟ income returned by the assessee on account of disallowance u/s 80P of the Act. The relevant finding and observation of the Ld. AO is reproduced below: “6. In view of the above, the interest income of Rs.1,49,14,473/- and dividend income of Rs.1,94,450/- earned from entities other than co.-op. societies is not allowable for deduction u/s. 8OP(2)(d) or u/s 80P(2)(a)(i) of the Act. Therefore, vide show cause notice issued on 26.08.2022, it is asked to assessee as why the deduction claimed u/s.80P of Rs.1,50,41,447/- should not be disallowed. In response to show cause notices, assessee has not submitted any reply or supporting evidences. Since, it is primary onus to assessee to prove the eligibility of deduction claimed in ITR, however it has failed to do so, therefore, deduction claimed u/s. 80P(2)(a)(i) or u/s. 80P(2)(d) of the IT Act is disallowed and added back to the total income of the assessee. Accordingly, assessee is not entitled for deduction u/s. 80P(2)(d) or u/s.80P(2)(a)(i) of the Act in respect of rental income (under the head income from house property) of Rs.35,97,139/-, interest income and dividend income (under the head income from other source) of Rs.1,50,41,447/-. However, as per return filed by assessee, the deduction u/s.80P is allowed to the extent of Rs.1,08,70,807/- after set off of business losses, therefore the disallowance on account of deduction claimed by assessee u/s.80P of the Act is restricted to the extent of Rs.1,08,70,807/- and added to the total income of assessee under the head income from other sources as discussed above. The penalty proceedings for underreporting of income which is in consequences of misreporting thereof u/s. 270A is initiated separately. (Addition of Rs.1,08,70,807/-)”
On appeal, the Ld. CIT(A)/NFAC observed that various notices of hearing were issued to the assessee requiring the assessee to submit the grounds of appeal
as the same were not filed along with Form
35. In the absence of any compliance from the side of the assessee inspite of sufficient time and adequate number of opportunities of being heard provided to the assessee, the Ld. CIT(A)/NFAC dismissed the appeal of the assessee by observing as under: “6.1 In Form 35, the assessee has submitted that the Grounds of appeal are attached separately. However, on verification, the assessee did not file / attach grounds of appeal. Therefore, during the appellate proceedings, the assessee was given several opportunities to file the Grounds of appeal. However, the assessee did not respond to the notices issued. As the appellant has not raised any Grounds of appeal which need adjudication, the appeal is therefore infructuous. Thus the appeal is dismissed as infructuous. 7.0 In the result, the appeal filed against the order u/s. 143(3) r.w.s.144B of the Act for the AY 2020-21 is dismissed.”
Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that the non-compliance before the Ld. CIT(A)NFAC was not intentional but has happened due to certain unavoidable circumstances beyond the control of the assessee. He submitted that the Ld. CIT(A)/NFAC has dismissed the appeal of the assessee without deciding the issues on merits. The assessee has a strong case on merits and the impugned issue is covered in favour of the assessee. He submitted that given an opportunity the assessee is in a position to substantiate its case by filing the requisite details/documentary evidence before the Ld. CIT(A)/NFAC. He, therefore, prayed that in the interest of justice, the matter may be restored to the file of the CIT(A)/NFAC to decide the issues raised by the assessee before him afresh after affording an opportunity of hearing to the assessee.
The Ld. DR, on the other hand, heavily opposed the arguments advanced by the Ld. Counsel for the assessee and submitted that despite number of opportunities granted, the assessee never bothered to make any submission before the Ld. CIT(A) NFAC. He accordingly submitted that the order of the Ld. CIT(A)/NFAC dismissing the appeal filed by the assessee should be upheld and the grounds raised by the assessee should be dismissed.
We have heard the Ld. Representatives of the parties and perused the material available on record. Admittedly, before the Ld. CIT(A)/NFAC there was non-compliance of notice(s) of hearing. Perusal of the order of the Ld. CIT(A)/NFAC reveals that he dismissed the appeal of the assessee for the reason that the assessee failed to submit the grounds of appeal in spite of several opportunities granted and therefore the matter could not be adjudicated upon. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details/ documents before the Ld. CIT(A)/ NFAC and therefore he has requested for remand of the matter to the file of the Ld. CIT(A)/NFAC for fresh adjudication on merits of the case.
10. Considering the totality of facts and in the circumstances of the case enumerated above, without going into the merits of the appeal, we deem it proper, in the interest of justice, to set aside the order of the Ld. CIT(A)/NFAC and restore the matter back to his file for adjudication afresh and pass speaking order on merits as per fact and law after allowing one final opportunity of being heard to the assessee. The assessee is also hereby directed to provide the requisite support in terms of submitting the relevant documents/ evidence as may be required/called upon on the appointed date and make his submissions without seeking any adjournment under any pretext, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. At the same time, because of the callous attitude of the assessee in not responding to the notices issued by the office of the Ld. CIT(A)/NFAC as well as the Ld. AO, we levy a cost of Rs.5,000/- on the assessee which shall be deposited within one month from the receipt of this order. The Ld. CIT(A)/ NFAC shall ensure that the cost has been deposited before disposal of the appeal. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.