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Facts
The assessee, Kotla Bhari Milk Producers Society Ltd., a small cooperative, appealed against an intimation order from AY 2014-15 under Section 143(1) which disallowed a deduction of Rs. 8,19,137/- under Section 80P. The appeal was filed with an inordinate delay of 3350 days, which the CIT(A) dismissed as time-barred, rejecting the condonation request despite the assessee citing inadequate legal advice and no mala fide intention.
Held
The Tribunal upheld the CIT(A)'s decision, finding the reasons for the 3350-day delay vague and unsubstantiated. It dismissed the application for condonation of delay and consequently the assessee's appeal, emphasizing the need for satisfactory explanations for delay and citing Supreme Court precedents.
Key Issues
Whether the appellate authorities erred in rejecting the condonation of a 3350-day delay in filing the appeal, and if the disallowance of Section 80P deduction without hearing violated natural justice.
Sections Cited
143(1), 249(3), 80P, 80P(2)(b), 250
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Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A) dt. 30/01/2025 pertaining to Assessment Year 2014-15.
In the present appeal Assessee has raised the following grounds: 1) That under the facts, circumstances of the case and in law the lid ADIT/JCIT- (Appeals). Guwhati erred in rejecting in prayer of the appellant for condonation of delay in filing appeal although there was sufficient cause within the meaning of Sec. 249(3) of the Income Tax Act. 1961 for delay in tiling the appeal. The Counsel of the appellant did not guide our society that appeal is required to be filed against the Intimation Order dated 05/10/2015 passed u/s 14311) by the Central Processing Centre. Bangaluru and there was no deliberate inaction or mala fide intention on part of the assessee in late filing the appeal 2) That under the facts, circumstances of the case and in law the Ed. ADIT/ JCII- (Appeals) has not exercised his power to condone the delay in tiling the appeal in a pragmatic manner to advance the cause of substantial justice notwithstanding that there was inordinate delay of 3350 days in filing the appeal and rejected the prayer for condonation of delay which was duly supported by affidavit by the Secretary of the appellant-society and dismissed the appeal on technical ground being time barred. The Id. ADIT JCIT-(Appeals) ought to have adopted a liberal approach in dealing with the prayer for condonation of delay in filing appeal as observed by the Hon'ble Supreme Court in the case of Collector Land Acquisition Vs. Mst. Katijt & Ors (167 ITR 471) (SC)
2 3) That appellant is very small primary co-operative Society engaged in the business of supply of Milk grown or raised by its members and whole of its income is eligible for deduction u/s 80P(2)(b) of the Income-tax Act. 1961. 4) That under the facts, circumstances of the case and in law the Ld. ADIT / JCTT- (Appeals) erred in not adjudication Ground No-1 taken in Form-35 which reads as under: “That under the facts circumstances of the case and in law, the Dy. Director of Income Tax. Central Processing Centre. Bangaluru (hereinafter referred as Ld AO) has erred in processing the return of income for the AY. 2014-15 vide Intimation dated 05/10/2015 u/s 143(1) of the Income Tax Act. 1961 by making disallowance of the deduction claimed from the gross total income u/s 80P for Rs. 8.19.137/- without providing any opportunity of hearing resulting in gross violation of the principle of natural justice" 5) That under the facts, circumstances of the case and in law the Id. ADIT/ JCIT- (Appeals) erred in not adjudication Ground No.-2 taken in Form-35 which reads as under: "That the Intimation dated 05/10/2015 u/s 143(1) of the Act is bad in law being contradictory. In the Intimation at Sr. No. 12 (Page 2) the Id NO has not considered the deduction for Rs.8,19,137/- as claimed by the appellant bum under the heading Schedule-VIA Deductions under Chapter-VIA at Page No. 10 of the Intimation, deduction u/s 80P for Rs. 8,19,137/- was computed 6) That the appellant may be allowed to add, amend or raise additional grounds of appeal before the appeal is finally heard or disposed of.
3. Briefly, the facts of the case are that the assessee Kotlla Bhari Milk Producers Society Ltd., a small cooperative engaged in supplying milk produced by its members, filed an appeal against an intimation order dated 05/10/2015 issued under Section 143(1) for AY 2014-15, which disallowed a deduction of Rs. 8,19,137/- claimed under Section 80P. The society argued that the disallowance was made without providing an opportunity for a hearing, violating natural justice, and pointed out contradictions within the intimation order itself. The appeal was filed with a delay of 3350 days, attributed to inadequate legal advice, and supported by an affidavit. However, the appeal was dismissed by the appellate authority on the ground of being time-barred, rejecting the request for condonation. The Assessing Officer, through automated processing at CPC Bengaluru, had disallowed the deduction without detailed scrutiny or hearing.
4. Against the order of the Ld. AO the assessee went in appeal before the Ld. CIT(A).
The Ld. CIT(A) dismissed the assessee’s appeal as time-barred due to the 3350-day delay in filing, as per the order issued under Section 250 of the 3 Income Tax Act, 1961. The Ld. CIT(A) refused to condone the delay, finding that the society failed to provide sufficient cause for not filing the appeal within the statutory period prescribed under Section 249(3). Despite the society's affidavit from its Secretary explaining the delay due to lack of proper legal guidance and no deliberate inaction, the Ld. CIT(A) held that the explanation was inadequate to justify such an inordinate delay. The Ld. CIT(A) did not adjudicate on the substantive grounds raised in Form-35, including the denial of the Section 80P deduction and the alleged violation of natural justice, as the appeal was rejected on procedural grounds. The Ld. CIT(A) emphasized a strict interpretation of the limitation period, declining to adopt a liberal approach as suggested by judicial precedents like Collector Land Acquisition vs. Mst. Katiji & Ors (167 ITR 471) (SC).
Against the order of the Ld. CIT(A) the assessee preferred an appeal before the Tribunal.
During the course of hearing the Ld. AR argued that the significant delay in filing the appeal was due to a genuine mistake, as their counsel failed to advise them on the need to appeal the intimation order dated 05/10/2015. The Ld. AR emphasized that there was no deliberate inaction or mala fide intent, as supported by an affidavit from the society's Secretary. They urged the Ld. CIT(A) to exercise discretion under Section 249(3) to condone the delay, citing the Supreme Court's ruling in Collector Land Acquisition vs. Mst. Katiji & Ors, which advocates a liberal approach to advance substantial justice. The Ld. AR further argued that the society, being a small cooperative engaged in milk supply, was entitled to a full deduction under Section 80P(2)(b), and the AO's disallowance of Rs. 8,19,137/- without a hearing violated natural justice. Additionally, the Ld. AR pointed out inconsistencies in the intimation order, noting that the deduction was acknowledged in one section but ignored in the final computation, rendering the order legally flawed. The Ld. AR also requested the opportunity to amend or raise additional grounds before the appeal's final disposal. The Ld. AR had further submitted that the delay of 3,350 days in filing the appeal was 4 caused due to reliance on multiple Chartered Accountants who failed to guide the society appropriately. It was stated that:
The society, being a small primary cooperative society, had its tax matters handled by a Chartered Accountant firm, M/s K.S. Dua & Co. The Income Tax Return (ITR) for A.Y. 2014-15 was filed by the said firm, in which the status of the society was incorrectly mentioned as "Co- operative Bank" instead of "Co-operative Society", due to which deduction under section 80P was disallowed by the CPC. The mistake was not rectified nor was an appeal filed at that time by the earlier Chartered Accountant. A subsequent Chartered Accountant, CA Mahesh Aneja, also failed to inform the society of the remedy of appeal, despite a communication from the jurisdictional Assessing Officer dated 29.12.2021 advising appeal before CIT(A). Eventually, upon consultation with a new Chartered Accountant, CA Parveen Jindal, on 30.12.2024, it was discovered that refunds for later years had been adjusted against the outstanding demand for A.Y. 2014-15.
Per contra, the Ld. DR agreed with the CIT(A)’s decision to reject the appeal, saying the 3350-day delay was too long and not properly explained under the law. The DR argued that blaming poor legal advice was not a good enough reason, as it is the taxpayer’s duty to follow deadlines. Allowing such a long delay, the DR said, would create a bad example and weaken the importance of time limits in the law. Regarding the main issue, the Ld. DR supported the Assessing Officer's decision to deny the Section 80P deduction, saying the society did not provide enough proof to claim it. The Ld. DR also pointed out that the intimation under Section 143(1) is done automatically, and if the society had any problems with it, they should have filed an appeal or correction in time which they failed to do.
We have perused the material available on record and find that there is a delay of more than 3,350 days in filing the present appeal before the Ld. 5 CIT(A). The reasons cited by the Ld. Counsel for the assessee in his affidavit before the Ld. CIT(A) have been summarized hereinabove.
9.1 In our considered opinion, the reasons advanced by the assessee for not filing the appeal before the Ld. CIT(A) are vague and unsubstantiated. There is no explanation or evidence on record indicating that any efforts were made by the assessee-society to ascertain the outcome of the return processed by the CPC. We are also unable to comprehend the failure on the part of the professionals to communicate the outcome of the CPC processing. In recent times, there appears to be a growing tendency to attribute delays in filing appeals to alleged lapses by professionals, often without any supporting material or affidavit. We do not approve of this practice of imputing negligence or misconduct to professionals in the absence of even a scintilla of evidence. The Hon’ble Supreme Court, in a catena of decisions, has consistently held that a person seeking condonation of delay must furnish a satisfactory explanation, including a day-to-day account, for not filing the appeal within the prescribed time.
9.2 In view of the above, we find no merit in the application seeking condonation of delay, and accordingly, the same is dismissed. In support of this conclusion, we place reliance on the judgment of the Hon’ble Supreme Court in the case of Majji Sannemma @ Sanyasirao vs. Reddy Sridevi and Others [Civil Appeal No. 7696 of 2021, dated 16.12.2021], relied upon by the Ld. DR, wherein the Hon’ble Apex Court dismissed the condonation application on similar facts.The Hon’ble Supreme Court at Para 6.2 had reproduced the facts of the case to the following effect :
6.2 We have gone through the averments in the application for the condonation of delay. There is no sufficient explanation for the period from 15.03.2017 till the Second Appeal was preferred in the year 2021. In the application seeking condonation of delay it was stated that she is aged 45 years and was looking after the entire litigation and that she was suffering from health issues and she had fallen sick from 01.01.2017 to 15.03.2017 and she was advised to take bed rest for the said period. However, there is no explanation for the period after 15.03.2017. Thus, the period of delay from 15.03.2017 till the Second Appeal was filed in the year 2021 has not at all been explained. Therefore, the High Court has not exercised the discretion judiciously.
In our view, the facts of the present appeal are identical, rather are on worse footing, than that of the case of Majji Sannemma @ Sanyasirao (supra).
6 Hence, the ld.CIT(A) was right in dismissing the condonation application and the appeal of the assessee. We do not find any reasons to interfere with the finding of ld.CIT(A) and accordingly, the appeal of assessee is dismissed.
In the result, appeal of the Assessee is dismissed.