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Facts
The assessee, a Cooperative Society, filed Nil income for AY 2018-19 claiming deduction u/s.80P. The case was selected for scrutiny, but the assessee failed to appear before the Assessing Officer, leading to a best judgment assessment. The appeal before the CIT(A) was dismissed in limine due to delay.
Held
The Tribunal condoned the delay in filing the appeal before the CIT(A), considering the reasons provided and the judgment in Collector, Land Acquisition vs. Mst. Katiji & Ors. The issue of deduction u/s.80P was restored to the Assessing Officer for fresh adjudication.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was liable to be condoned and whether the deduction u/s.80P was allowable to the assessee.
Sections Cited
250, 144, 143(3A), 143(3B), 142(1), 80P(2)(a)(i), 80P(2)(d), 80P
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD
आदेश / ORDER
This appeal at the instance of assessee pertaining to the assessment year 2018-19 is directed against the order dated 31.07.2024 of National Faceless Appeal Centre, Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of the Assessment Order dated 09.03.2021 passed u/s.144 r.w.s.143(3A) & 143(3B) of the Act.
Registry has informed that there is delay of 211 days in filing the appeal before the Tribunal Application. Affidavit for condonation of delay has been filed stating the reasons which led to delay in filing the appeal which reads as follows:
“Our society is situated in a village not supported by any trained staff, and our Board of Directors also consist of farmers from nearby areas. There is no dedicated clerical staff looking after tax matters. Initially the society was not having any permanent tax consultant who could advice regarding tax compliances and annual return filing was done with the help of some local tax practitioners or through Government auditors, who are changing every year. The current board of directors assumed the charge in 2022, and when they started getting various notices from income tax department for various demands, then it was realized that due to various non-compliances with regard to statutory notices certain orders are passed in case of society, which had resulted into piling up of huge demand against the society. After that current board of directors carried out due diligence through another tax consultant, who observed that NFAC has dismissed the appeals for AY 2018-19 by passing an ex-parte order u/s 250 dated 04/10/2023 and has not condoned the delay in filing the appeal, which was against the order passed u/s 144 dated 09.03.2021. Mainly due to this reason there is a delay in filing the appeal before NFAC as well as before Hon’ble ITAT. In the above circumstance, I on behalf of appellant society most humbly pray before your Honors to condone the delay of 211 days and oblige.”
After hearing both the sides and considering the reasons putforth by the assessee by way of affidavit giving rise to the delay and also placing reliance on the judgment of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 2 SCC 107), I find that there was ‘reasonable cause’ on the part of assessee for not filing the appeal within the time limit specified under the Act. I therefore condone the delay of 211 days in filing the appeal and admit the appeal for adjudication.
Assessee has raised following grounds of appeal :
“1. On the facts and the circumstances of the case and in law, lower authorities erred in passing ex-parte order and erred in deciding the issue only on the basis of material available with them, this action is being violative of principal of natural justice.
Your appellant prays for granting opportunity of hearing before lower authorities. Without prejudice to the above grounds of appeal
, following grounds are also taken on merit,
2. On the facts and in the circumstances of the case and in law learned AO erred in rejecting deduction under section 80P(2)(a)(i) for a sum of Rs. 27,32,538/- for entire book profit of appellant society without appreciating the fact that earning of interest is an integral part of society's business and appellant prays for allowing such deduction.
3. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in treating a sum of Rs. 27,32,538/- being interest received on investment with other Co- Operative Bank as ineligible amount for calming deduction under section 80P (2)(a)(i) without appreciating the fact that earning of interest is an integral part of societies business and appeal and prays for allowing such deduction.
4. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in treating the interest received from investment as income from other sources by rejecting appellant's contention that said interest income is integral part of business activity and your appellant prays for cancellation of Assessing officers action.
5. Without prejudice to above ground on the facts and circumstances of the case and in the law Learned Assessing Officer erred in not allowing the deduction under section 80P(2)(d) on interest income received from other co-operative society. Your appellants pray for allowing of the same. Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice.”
Brief facts of the case are that the assessee is a Cooperative Society and for the A.Y. 2018-19 assessee declared Nil income in the return furnished on 01.10.2018 which was processed by CPC u/s.143(1) of the Act on 10.02.2019. In the return of income, assessee has claimed deduction u/s.80P of the Act at Rs.27,32,538/-. Case selected for scrutiny followed by validly serving statutory notices. Assessee was required to furnish the information as specified in the notices as per annexure to the notices u/s.142(1) of the Act but no compliance was made. Ld. Assessing Officer concluded the assessment u/s.144 of the Act denying the deduction u/s.80P of the Act and assessed the income at Rs.27,32,538/-.
Aggrieved assessee preferred appeal before ld.CIT(A) with a delay of 264 days. Even though the delay was mainly on account of covid-19 pandemic restrictions but still ld.CIT(A) did not condone the delay and dismissed the appeal in limine. Now the assessee is in appeal before this Tribunal.
Ld. Counsel for the assessee submitted that the nature of activity carried out by the assessee remains the same. Even for the preceding A.Y. 2017-18 case was selected for scrutiny and ld. AO has allowed the deduction u/s.80P of the Act claimed by the assessee at Rs.18,96,751/-. Since the nature of activity remains the same, claim of the assessee for the year under appeal may also be allowed.
On the other hand, ld. Departmental Representative stated that ld.CIT(A) has dismissed the assesse’s appeal in limine and ld. AO has passed the best judgment assessment and therefore the issue has not been examined. He raised no objection if the issues are remitted back to the lower authorities for necessary adjudication.
I have heard the rival contentions and perused the record placed before me. The grievance of the assessee is that lower authorities have not allowed the claim of deduction u/s.80P(2)(a)(i) of the Act at Rs.27,32,538/-. It is claimed before me that this activity of the society is consistently carried out and even in the past claim has been allowed. Copy of assessment order for A.Y. 2017-18 dated 27.11.2019 is placed on record and as per the same assessee’s claim of deduction u/s.80P of the Act has been allowed. However, for the year under appeal, assessee failed to appear before the Assessing Officer even when the statutory notices were duly served upon the assessee. Ld. AO had to frame best judgment assessment on account non- compliance by the assessee. Ld.CIT(A) has also not dealt with the merits since the same has been dismissed in limine for delay in filing the appeal. Under these given facts and circumstances, I in the larger interest of justice condone the delay before ld.CIT(A) considering covid-19 pandemic restrictions and deem it appropriate to restore the issue to the file of Jurisdictional Assessing Officer who shall examine the claim of the assessee for deduction u/s. 80P of the Act denovo and then decide in accordance with law after affording due opportunity of hearing to the assessee. Assessee is directed to provide correct email id and contact detail to the department for receiving the notices from ITBA portal. Assessee is further directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause, failing which the JAO shall be free to proceed in accordance with law. Findings of ld.CIT(A) is set aside and 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 20th day of June, 2025.