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Facts
The assessee, a credit co-operative society, filed a return declaring Nil income after claiming deduction u/s 80P. The Assessing Officer made additions amounting to Rs. 10,82,98,310/-. The assessee's appeal before the CIT(A) was dismissed due to a 67-day delay in filing and non-appearance. The assessee contended that the delay was due to communication issues with their consultant's email.
Held
The Tribunal condoned the 67-day delay in filing the appeal before the CIT(A) considering the assessee's location and reliance on a tax consultant. The Tribunal restored the case to the CIT(A) for adjudication on merits, directing the CIT(A) to provide a reasonable opportunity of being heard and pass a speaking order.
Key Issues
Whether the delay of 67 days in filing the appeal before the CIT(A) should be condoned, and whether the additions made u/s 68 and disallowance of interest were justified.
Sections Cited
250, 144, 144B, 68, 80P, 80P(2)(d)
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Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2020-21 is directed against the order dated 30.09.2024 of National Faceless Appeal Centre(NFAC), Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 30.08.2022 passed u/s.144 r.w.s 144B of the Act.
Assessee has raised following grounds of appeal.
“1. The learned CIT(A), NFAC erred in law and on facts in sustaining the addition made by the learned AO amounting to Rs.10,82,98,310/- as follows: -Addition u/s 68 of unexplained cash credit-Rs.9,81,47,719 -Disallowance of Interest Rs.1,01,29,686/- -Deduction u/s 80P-Rs.20,905/- Ma Chimanraoji Kadam Gr Bigar Seti Sah Path Mar Saswad 2. Learned CIT(A)-NFAC erred in law and on facts in rejecting the appellant's appeal on account of delay of 67 days in filling appeal memo. Learned CIT(A) ought to have condoned the genuine delay of 67 days caused due to communication issues on account of consultant's email id which remained to be checked and informed to the Appellant.
Appellant contends that the learned CIT(A) ought to have decided the appeal on merits considering the peculiar facts of the case.
4. Learned CIT(A), NFAC erred in law and on facts in making an addition u/s 68 of ITA, 1961 amounting to Rs.10,82,77,405/- (Rs.9,81,47,719 Rs.1,01,29,686/-) as unexplained cash credits, without appreciating that, appellant is a credit co-operative society registered under Maharashtra State Co-operative Act, 1960 and accepting deposits/cash credits is the primary business of the appellant. Appellant contends that such deposits, received from customers ought not to be treated as unexplained cash credits.
5. The learned I-T Authorities erred in law and on facts in not appreciating that various courts have held that deduction u/s 80P(2)(d) of the ITA, 1961 amounting to Rs.20,905/-is allowable to credit co-Operative society (i.e. Pathsanstha) on interest income earned from fixed deposits with co-operative bank.
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.
7. The appellant craves leave to add, alter, clarify, explain, modify, or delete any of the grounds of appeal, and to seek any just and fair relief.”
3. At the outset, Ld. Counsel for the assessee submitted that on account of not responding to the notices of hearing issued by ld. CIT(A) appeal of the assessee has been dismissed. Further, ld. CIT(A) has also dismissed the appeal giving the reasons for delay of 67 days in filing of the appeal. He stated that delay was due to communication of the Assessment order on the e-mail id of the tax consultant which remained to be checked. He also stated that assessee would not have gained from delaying the appeal. Therefore, he prayed that the matter may be restored to the file of CIT(A) for necessary adjudication Ma Chimanraoji Kadam Gr Bigar Seti Sah Path Mar Saswad on merits of the case. Ld. Departmental Representative raised no objection if the matter is restored to the file of CIT(A).
We have heard the rival contentions and perused the record placed before us. We observe that assessee is an Association of Persons (AOP) and for the A.Y. 2020-21 declared Nil income in the return e-filed on 29.12.2020 after claiming deduction u/s. 80P of the Act at Rs. 2,905/-. Case selected for limited scrutiny. Even though valid statutory notices were issued assessee failed to respond resulting into the best judgment assessment wherein Ld. Assessing Officer assessed the income at Rs.10,82,98,310/- as against Nil returned income. Assessee challenged the additions made by Ld. Assessing Officer before CIT(A) but the appeal was delayed by 67 days. Even though assessee in Column No. 15 of Form 35 has stated the reasons for delay alongwith an affidavit but Ld. CIT(A) did not condone the delay and dismissed the appeal of the assessee for non-appearance/non-response from the side of the assessee. We however considering the facts of the case and the assessee society being located in a remote village and is dependent upon the tax consultant which justify to condone the delay in filing of the appeal before CIT(A) by virtue of judgment of Hon’ble Supreme Court in the case of Inder Singh v. The State of Madhya Pradesh (2025 INSC 382). We therefore condone the delay of 67 days in filing the appeal before CIT(A) and admit the appeal for adjudication.
So far as the merits of the case are concerned assessee could not file any details before the lower authorities. It is pleaded before us that the addition has been made for the gross receipts and even no deduction has been allowed for the legitimate expenditure incurred during the year.
Ma Chimanraoji Kadam Gr Bigar Seti Sah Path Mar Saswad 6. Considering the fact that assessee could not substantiate its case by any representation adducing cogent evidences, we are of the view that in the facts and circumstances of the instant appeal and in all fairness the issues raised on merits requires to be restored to the file of ld.CIT(A) for necessary adjudication. Needless to mention that ld.CIT(A) shall in the course of set-aside proceedings afford a reasonable opportunity of being heard to the assessee and after considering the submissions/evidences filed by the assessee shall pass a speaking order as contemplated u/s.250(6) of the Act in light of judgment of Hon’ble Bombay High Court in the case of PCIT (C) vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bombay). Assessee is directed to inform/update latest email id and contact detail to the department for receiving the notices from ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is set aside and the effective grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 14th day of July, 2025.