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Facts
The assessee, a cooperative society, filed two appeals against orders from the Ld. CIT(A) which were dismissed due to a delay in filing. The core issues in the appeals concerned an addition of Rs. 45,12,420/- by disallowing a deduction u/s 80P on interest and dividend income, and a penalty of Rs. 7,02,377/- imposed u/s 270A for under-reporting of income. The assessee contended that the delay was due to their counsel not intimating them about the hearings.
Held
The Income Tax Appellate Tribunal (ITAT) condoned the delay in filing both appeals, finding that the CIT(A) had dismissed them on technical grounds without addressing the merits. Emphasizing natural justice, the Tribunal remanded both matters back to the CIT(A) for fresh adjudication on merits, ensuring the assessee is given a full opportunity of hearing.
Key Issues
Whether the CIT(A) erred in not condoning the delay in filing appeals and dismissing them on technical grounds. Whether the disallowance of deduction u/s 80P for interest and dividend income and the penalty u/s 270A for under-reporting of income were justified.
Sections Cited
250, 80P, 80P(2)(d), 270A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CHANDIGARH BENCH, ‘A’, CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
2 423-424-Chd-2025 The Chimna Agri Service Society Ltd., Ludhiana respectively of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi.
Grounds of appeal in ITA 422/Chd/2025 are as under:
1. That the Ld. CIT(A) has erred in passing the order u/s 250 of the Income Tax Act, 1961 and dismissing the appeal of the appellant and confirming the order of the Assessing Officer in making the addition of Rs. 45,12,420/- 2. That the Ld. CIT(A) has in law as well as on the facts has erred in not admitting the appeal of the appellant and has also erred in rejecting the appellant’s application for condonation of delay, as filed before him at para No 15 of Form No. 35, in a summary and arbitrary manner without appreciating and rebutting the reasons stated in application for condonation of delay in a judicious manner. 3. Notwithstanding the above grounds of appeal
, the CIT(A) has failed to appreciate that the appellant is operating as a co- operating society in a very small village having population less than 2000 and it does not have a technical staff and was dependent upon his counsel for his Income Tax matters, who did not intimate him about the hearing and, as such, the appellant was 3 423-424-Chd-2025 The Chimna Agri Service Society Ltd., Ludhiana prevented by sufficient and reasonable cause for filing any submissions before the Ld. CIT(A).
4. That notwithstanding the above grounds of appeal
, the addition made by the Ld. Assessing Officer and confirmed by the Ld. CIT(A) to the tune of Rs. 45,12,420/- by disallowing deduction u/s 80P of the Income Tax Act, 1961 on account of interest received from the Ludhiana Central Cooperative Bank Ltd and dividend income from another Cooperative Society is against the law and facts and circumstances of the case.
5. That the Ld. CIT(A) has failed to consider that the interest income is from the Ludhiana Central Cooperative Bank Ltd and dividend income is from another cooperative society, and as such, the deduction u/s 80P(2)(d) of the Income Tax Act, has rightly been claimed.
6. That the Ld. CIT(A) has not followed the detailed recent judgement of Chandigarh Bench of the ITAT om the case pf “Jagadhari Cooperative Marketing-cum-Processing Society Ltd. vs. PCIT” reported in (2024) 125 TLC 103, in which, it has been held that any interest received by the Cooperative Society from the ‘Cooperative Bank’ is eligible for deduction u/s 80P(2)(d) of the Income Tax Act and that being the judgement of jurisdictional Bench of the ITAT, the Ld. CIT(A) was supposed to follow and hence the 4 423-424-Chd-2025 The Chimna Agri Service Society Ltd., Ludhiana confirmation of addition by the CIT(A) is bad in law.
7. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. are as under :-
1. That the Ld. CIT(A) has erred in passing the order u/s 250 of the Income Tax Act, 1961 and dismissing the appeal of the appellant and confirming the order imposing penalty u/s 270A of the Income Tax Act at Rs. 7,02,377/- 2. That the Ld. CIT(A) has in law as well as on the facts has erred in not admitting the appeal of the appellant and has also erred in rejecting the appellant’s application for condonation of delay, as filed before him at para No 15 of Form No. 35, in a summary and arbitrary manner without appreciating and rebutting the reasons stated in application for condonation of delay in a judicious manner. 3. That the appellant is operating as a co- operative society in a very small village having population less than 2000 and it does not have a technical staff and was 5 423-424-Chd-2025 The Chimna Agri Service Society Ltd., Ludhiana dependent upon his counsel for his Income Tax matters, who did not intimate him about the hearing and, as such, the appellant was prevented by sufficient and reasonable cause for filing any submissions before the Ld. CIT(A). 4. That notwithstanding the above grounds of appeal
, the penalty as levied at Rs. 7,02,377/- as imposed by the Ld. Assessing Officer U/S 270A of the Income Tax Act, 1961 for under reporting of income and confirmed by the Ld. CIT(A) is against the law and facts and circumstances of the case.
5. That the Ld. CIT(A) has failed to appreciate that even otherwise all facts have been disclosed by the assessee at the time of filing return of income and hence levy of penalty is not justified.
6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.
3. At the very outset, ld. Counsel for the Assessee submitted before us that both the appeals before the Ld. CIT(A) were belated appeals. The Ld. CIT(A) did not consider the request of the Assessee to condone the delay, rather he
6 423-424-Chd-2025 The Chimna Agri Service Society Ltd., Ludhiana dismissed the appeals as it were not filed in time. The Ld. Counsel submitted before the Bench the that delay in filing the appeals before the Ld. CIT(A) may kindly be condoned and the matter may be remanded back to the CIT(A) for adjudicating the issues raised in both the appeals on merits.
Per contra, the ld. DR relied on the orders of the authorities below.
We have considered the findings given by the Assessing Officer as well as Ld. CIT(A) in their respective orders. We find that the Ld. CIT(A) has not condoned the delay in late filing of appeals before him rather he has dismissed the appeals on this technical ground. In our conspired view, in the interest of natural justice, the issues raised in both the should he heard and need to be decided on merit.
Accordingly, we condone the delay in both the appeals and remand the matters back to the file of the CIT(A) for for adjudication afresh on merit by considering the submissions and documents produced by the Assessee and the relevant
7 423-424-Chd-2025 The Chimna Agri Service Society Ltd., Ludhiana material available on record. Needless to say, that the CIT(A) shall afford due, reasonable and adequate opportunity of hearing to the Assessee. The Assessee, no doubt, shall cooperate in the fresh proceedings before the CIT(A). All pleas available under the law shall remain so available to the assessee. Ordered accordingly.
In the result, both the appeals filed by the Assessee are allowed for statistical purposes.
Order pronounced on 03. 09.2025.