U.P.COOPERATIVE FEDERATIONLTD,LUCKNOW vs. ITO-2(3), , LUCKNOW

आयकर अपीलीय अधिकरण ‘बी’ न्यायपीठ, लखनऊ।
IN THE INCOME TAX APPELLATE TRIBUNAL
LUCKNOW BENCH “B”, LUCKNOW

श्री कुल भारत, उपाध्यक्ष एवं श्री अनादी नाथ मिश्रा, लेखा सदस्य के समछ
BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER

आयकर अपील सं/ ITA No.260/LKW/2023
ननिाारण वर्ा/ Assessment Year: 2003-04

U.P. Cooperative Federation
Ltd
PCF Building, 32, Station Road,
Lucknow-226004. v.
Income Tax Officer-2(3)
Pratyaksh Kar Bhawan,
57, Ram Tirath Marg,
Hazratganj, Lucknow-
226001. PAN:AAAAU0373P

अपीलार्थी/(Appellant)

प्रत्यर्थी/(Respondent)

अपीलार्थी कक और से/Appellant by:
Shri D. D. Chopra, Advocate
प्रत्यर्थी कक और से /Respondent by:
Shri Neeraj Kumar, CIT(DR)
सुनवाई कक तारीख / Date of hearing:
22
09 2025
घोर्णा कक तारीख/ Date of pronouncement:
19
12 2025

आदेश / O R D E R
PER KUL BHARAT, VICE PRESIDENT.:

This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National
Faceless Appeal Centre (NFAC), Delhi dated 06.07.2023, pertaining to the assessment year 2003-04. The assessee has raised the following grounds of appeal: -
“1. Because the learned CIT(Appeals) has grossly erred dismissing the Appeal of the Appellant on the ground o Limitation and has failed to appreciate the provisions of section 153(2)(a), proviso thereto of the Act.
2. Because the learned CIT(Appeals) has failed to appreciate that the Assessment Order dated 25.08.2014 has been passed well beyond limitation period prescribed under section 153(2)(a) of the Act and therefore the same has become barred by time.
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the matter has already been litigated twice before this Tribunal.
In the earlier round, the matter was restored to the Assessing
Officer, and thereafter, in ITA No. 119/LKW/2007, this Tribunal, in pursuance of the directions of the Hon’ble High Court dated
28.08.2009, passed a further order on 05.01.2012, whereby, the Tribunal upheld the order dated 08.03.2006 of the Assessing
Officer for directing a special audit u/s 142(2A) of the Act
(including the appointment of the special auditor and the issuance of directions for conducting the special audit). It is noteworthy that the issue had attained finality, as it was agitated by the assessee till the stage of Hon’ble Apex Court, where the assessee remained unsuccessful. In pursuance of the directions of the Hon’ble High
Court dated 18.12.2013 and this Tribunal’s order dated
05.01.2012, the Assessing Officer directed that the accounts of the assessee be subjected to a special audit by M/s Mridul
Agarwal & Associates, Chartered Accountants. However, no special audit could be conducted due to non-cooperation of the assessee. Thereafter, the Assessing Officer (“AO”, for short) proceeded to pass order u/s 144/250/254 of the Act dated
25.08.2014, whereby he assessed income at Rs.11,75,33,812/-.
While doing so, the AO made various additions partly allowing the deductions claimed under sections 80P(2)(a)(iv), 80P(2)(e), and 80P(2)(d) of the Act. The assessee carried the matter before the Ld. CIT(A) who sustained the finding of the Assessing Officer.
Now, the assessee is in appeal before this Tribunal.
4. Apropos to the grounds of appeal, at the time of hearing, the Ld. Authorized Representative (AR) for the assessee placed reliance on the written submissions. For the sake of clarity, the submissions of the assessee are reproduced as under: -
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“1. On assessment order dated 28.8.2014, giving effect to order passed by this learned Tribunal date: 30.4.2008 is barred by limitation under section 153(2A) of the Income Tax Act, 1961. a. This learned Tribunal vide order dated 30.4.2008 in ITA No. 119 &
548/Luc/07 while deciding the appeal of the appellant has restored various disallowances made in the assessment order dated 9.6.2006 to the file of Assessing officer. While doing so this learned Tribunal had directed the appellant assessee to produce relevant documents /books of accounts before the assessing officer who will verify the actual state of affairs and will thereafter decide whether there is a case of making disallowances out of expenses. It therefore, implies that the learned
Tribunal had set aside the assessment order dated 9.6.2006 and therefore, the limitation for passing fresh assessment order will be governed by the provisions under section 153(2A) of the Act which in this case subsisted upto 31.3.2010. b. To give effect to the order passed by this learned tribunal dated.30.4.2008 the Assessing’ officer has vide order/Notice of Demand under section 156 of the Act, dated 31.12.2008 has set-aside the earlier assessment order dated 9.6.2006 and has reduced the demand to NIL. A copy of the above order/Notice of demand dtd.31.12.2008 is annexed herewith as ANNEXURE NO. -1
c. As stated earlier, fresh assessment order should have been passed by the Assessing officer on or before 31.3.2010 as per the requirement of section 153(2A) of the Act. However, in the present case, the learned
Assessing officer has passed assessment order under section 144/
251/254 of the Act, on 25.8.2014. While passing the above assessment order the Assessing officer has relied upon the provisions of section 153(3)(ii) of the Act where no time limit is prescribed for giving effect to the appellate order whereby the matter has been restored to the file of assessing officer.
d. It is an admitted fact that to give effect to this learned Tribunal’s order dtd. 30.4.2008 restoring the matter to the file of Assessing officer, the Assessing officer has set aside the original assessment order dated
9.6.2006 and has reduced the demand to NIL and thereafter a fresh assessment order has been passed on 25.8.2014. e. It is further submitted that the Assessing officer on the basis of assessment order dtd.9.6.2006 had levied penalty under section 271(1)(c)of the Act on the present appellant vide order dated 31.3.2008. In appeal, the learned Commissioner (Appeal) vide order dated 26.8.2010
while holding that the appeal has become infructuous has held that the limitation period as per the provisions of Section 153(2A) of the Act to pass assessment order in the present case had already expired on 31.3.2010. A copy of the order passed by the learned ClT9Appeal) dated 26.8.2010 is annexed herewith as ANNEXURE NO. -2
2. On deduction under section 8O0P 2 of the Act is not dependent on quantification of claim made as an addition made to the income specified under s 80P(2) create tax neutral.
a.
This learned
Tribunal vide order dated
30.4.2008
in ITA
No.1198&548/Luc/07 has allowed the claim of deduction under section 80P(2) in respect of seed section. Regarding claim under section 80 P(2)(e)
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and 80P(2)(d) the learned Tribunal has restored the matter to the file of the Assessing officer to verify the claim on the basis of facts and after necessary verification. The learned Assessing officer in assessment order dated 25.8.2014 has allowed the claim of deduction under section 80P (2) but the same has not been allowed to the extent of Gross Total Income as already held by the learned C.I.T.(Appeals)/ITAT/High Court for the assessment year 2009-10 and A.Y. 2010-11 as also followed by the Assessing officer himself in the assessment order for the A.Y.2011-12. Copy of order passed by CIT (A) for the A.Y. 2008-09 and Copy of order dated 03.02.2017 for the A.Y 2010-11 passed Hon’ble High Court
ANNEXURE NO. 3 & 3A.”
Additional written submissions on behalf of the assessee
The present submissions are being filed by the Appellant in compliance with the directions issued by the Hon’ble Tribunal to submit brief synopsis including chronology explaining history of the case along with the compilation of the relevant documents/orders.
A. Issue of limitation period for passing the assessment order dated
25.08.2014
a. It is respectfully submitted that the Hon’ble Tribunal had passed the order dated 30.04.2008 (Annexure 2) setting aside the additions made vide the assessment order therein, and directed the Ld. AO to conduct fresh assessment.
b. The Appellant had filed appeal against the Order dated 30.04.2008
passed by this Hon’ble Tribunal. The Hon’ble High Court while allowing the appeal of the Appellant vide order dated 28.08.2009 (Annexure 4) has been pleased to remit the matter to this Hon’ble Tribunal to (i) examine the question of fact with regard to completion of special audit within stipulated period of 30 days/period extended by the Ld. AO and (ii) whether the Appellant has cooperated with the Auditor or not and to record a categorical finding after examining the entire evidence as per law and to pass necessary orders de-novo after admitting any additional evidence.
c. In compliance of the above order passed by Hon’ble High Court the learned Tribunal vide order dated 05.01.2012 (Annexure 6) has been pleased to hold that the Assessment order was framed within time. The learned Tribunal was further pleased to hold that the assessee did not’
cooperate with the Auditor and did not file any objections against the letter dated 08.03.2006 (Annexure 1) regarding order under section 142(2A) and therefore the Assessing Officer was forced to pass assessment order under section 144 of the Act.
d. The above order passed by ITAT dated 05.01.2012 (Annexure 6) was challenged by the Petitioner / Appellant in ITA No. 07/2012 before Hon'ble
High Court Lucknow and the same was dismissed by the Hon’ble Court vide order dated 18.12.2013 (Annexure 7).
e. It is the submission of the Appellant that at no point in time any stay was granted by the Hon’ble High Court or Supreme Court. Therefore, the period of limitation u/s 153(2A) should start from this Hon’ble Tribunal’s
Order dated 30.04.2008 (Annexure 2).
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f. To give effect to the order dated 30.04.2008, passed by this Ld.
Tribunal, the Ld. AO vide notice of demand dated 31.12.2008 (Annexure 3) has admitted that the matter has been set aside and the earlier demand raised was reduced to nil.
g. The Ld. AO however, passed the fresh assessment order on 25.08.2014
which is well beyond the limitation period.
h. The above assessment order dated 25.08.2014 was challenged by the Appellant in appeal before Ld. CIT(A) raising specific ground of limitation u/s 153(2A). Ld. CIT(A) while dismissing the appeal has held that the assessment could not have been proceeded because of the filing of appeal by the Appellant before the Hon’ble High Court Lucknow. The submission has no legs to stand on and is outrightly liable to be rejected. It is trite law that until a stay is granted by any court or tribunal, the Assessing Officer is not discharged from rigors of limitation. Further, the contention of the Ld.
CIT(A) that there was a direction for audit of accounts in its order dated
30.04.2008 (Annexure 2), therefore, the limitation is governed u/s 153(3)(ii) of the Act is erroneous and bad in law because, the Hon’ble Tribunal did not direct the Appellant to get the accounts audited but had only upheld the directions issued by the Ld. AO qua statutory audit.
i. That, even otherwise, even if the contention of the Ld. CIT(A) that the present case is covered u/s 153(3){ii) of the Act is accepted it is trite law that if any provision is silent on the question of limitation, a reasonable period of limitation (of four years) would automatically be read into the said provision. In the present facts, the Respondents have cited the filing of appeal by the appellant as a reason for noncompletion of assessment, however, the Ld. CIT(A) has erred in not taking into consideration that no stay was granted by either the Hon’ble High Court or the Hon’ble Supreme
Court. In the absence of any stay granted to the Appellant, the delay is unreasonable, unwarranted and arbitrary.
j. That without prejudice, the Hon’ble High Court vide its order dated
28.08.2009 (Annexure 4) directed the Hon’ble Tribunal to re-adjudicate only these two issues. This Hon’ble Tribunal vide order dated 05.01.2012
(Annexure 6) re-adjudicated the two issues only upholding the action of the Ld. AO qua the audit, but did not issue any directions to conduct special audit u/s 142(2A) of the Act. Therefore, there existed no direction to conduct any special audit and the case of the assessee was covered u/s 153(2A) of Act.
k. Therefore, even otherwise, if it is presumed that the period of limitation would start from the date of the order passed by this Hon’ble Tribunal dated 05.01.2012 (Annexure 6), the limitation period would come to an end on 31.03.2013, however, in the present case, the Respondents have passed the assessment order only on 25.08.2014 making the assessment illegal and beyond juri iction.
L. Therefore, the Impugned Assessment Order is beyond the limitation period and liable to be set-aside.
B. Allegation of contempt put forth by the Department for alleged non- compliance of the order of special audit u/s 142 (2A) of the Act
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a. It is outrightly submitted that the stand taken by the Ld. AO qua the audit letter dated 06.01.2014 (Annexure 8) is arbitrary, perverse and illegal.
b. Firstly, a fresh audit letter dated 06.01.2014 was issued by the Ld. AO in order to overcome the issue of limitation while relying on the order passed by this Hon’ble Tribunal dated 30.04.2008. c. Later, when the Appellant filed the objections dated 07.02.2014. (Annexure 9) to the audit proceedings on ground of limitation and conduct of audit professional, and also sought clarity on the fees, the objections were arbitrarily rejected by the Ld. AO holding that the audit of accounts was necessary in light of the directions of the Hon’ble High Court in its order dated 18.12.2013 (Annexure 7), however, to the contrary there was no direction in the said order to get the accounts audited but the Hon’ble
Court only upheld the action of the Ld. AO in its order dated 08.03.2006
(Annexure 1) for directing the audit of the Appellant’s accounts. Therefore, clearly, the audit order dated 06.01.2014 was a fresh order. Further, taking a contrary view, the Ld. AO held that the fresh audit proceedings were only an extension of the earlier audit proceedings and the same could not be said to be fresh audit proceedings, therefore, the Appellant was liable to bear the fees of the audit. If this submission of the Ld. AO was accepted then the fresh audit proceedings became time-barred in terms of Section - 142(2C) which provides for a maximum period of 180 days for conducting audit which ended September 2006. These illegalities gave rise to the non-cooperation with the audit proceedings.
d. Further on merits, it is the submission of the Appellant that an appeal was filed against the order dated 30.04.2008 (Annexure 2) passed by the Hon’ble Tribunal only on the ground of limitation and audit u/s 142(2A) of the Act. Accordingly, the Hon’ble High Court vide its order dated
28.07.2009 directed the Hon’ble Tribunal to re-adjudicate only these two issues. This Hon’ble Tribunal vide order dated 05.01.2012 (Annexure 6) re- adjudicated the two issues only upholding the action of the Ld. AO qua the audit, but did not issue any directions to conduct special audit u/s 142(2A) of the Act. Therefore, there existed no direction to conduct any special audit and the case of the assessee was covered u/s 153(2A) of Act.
C. Deduction u/s 80P of the Act is not dependent on quantification of claim made as any addition made to the income would become tax neutral a. The Appellant had claimed the deduction u/s 80P(2)(a)iv), (d) and (e) of the Act, and the same was accordingly allowed to the extent of claim made. However, the impugned additions had resulted in an increase in the ‘gross total income’ of the appellant. The additions made b. It is the submission of the Appellant that the Ld. AO and CIT(A) has erred in allowing the deduction u/s 80P only to the extent of claim made in the return and not to the ‘gross total income’ of the Appellant even though it is well settled that the deduction u/s 80P is allowable to the extent of ‘gross total income’ of the Appellant after any addition has been made.
Reliance is placed on the order passed in appellant’s own case for the AY(s) 1998-99, 2009-10 and 2010-11. c. It is therefore, the submission of the Appellant that any addition made/confirmed by way of the Impugned Order will become tax neutral.”
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dated 07-07-2014 that due to non-cooperation of the assessee, the work of Special Audit could not be done.
13. Following the above observation/order, again special audit u/s 142(2A) dated 06.01.2014 was sought but the assessee's non-cooperative conduct continued and it did not let the appointed CA to carry out the special audit. Since complete books of accounts and other documents have not been produced for verification in spite of various opportunities provided, the figures of sales, purchases, receipts or expenses could not be verified this time also. Therefore, addition of Rs.4,60,29,925/- is made to the income of the assessee as undisclosed profit. Being satisfied that inaccurate particular of income have been furnished, penalty proceedings u/s 271(1)(c) of the I.T. Act, 1961 are also initiated separately".
Hence, at this stage, before asking for any relief from the Hon'ble Bench, it is necessary for the assessees to prove what has prevented it from complying with the direction of the Hon'ble Juri ictional High Court and Hon'ble ITAT Lucknow Bench's categorical directions. The assessee has not provided any documents in relation to this issue. Moreover, this issue was never raised before any of the juri ictional courts even though the assessee went up to the Supreme Court on the issue of special audit.
Furthermore, it is unclear from the documents submitted by the assesse whether grounds for avoiding a special audit were raised before the A.O.
or CIT (A). Hence, it is apparent that after being dismissed from the juri ictional High Court and the Hon'ble Supreme Court, raising this issue is merely an afterthought to cover up the assessee's non-cooperation with the special auditor. All the case laws cited and filed by the assessee are not applicable in this case because the facts here are related to the avoidance of the directions of juri ictional courts, and the question of the applicability of various provisions of the Income Tax Act comes after that.
Hence, given the above-stated facts, it is humbly requested before the Hon'ble Bench that the order of A.O be confirmed mainly on three grounds:
1) Books of accounts of the assessee are not reliable as the assessee has not cooperated with the department (reference ground numbers 5 and 6)
2) Case laws are applicable only in case of reliable books of accounts.
3) The assessee's grounds indicate that his books are not reliable, as they were not prepared for a special audit, despite clear directions from the Juri ictional High Court and the Hon'ble ITAT, specifically for this year.
Time limitation issue:
The Ld. CIT (A) has discussed this issue at length in para 6.4.g. He has given the timeline of the case and observed the assessee's conduct during this period. From the above-said paragraph, it is clear that there was a predominant element of 'direction' in this case, as understood in accordance with the provisions of Section 153(3)(ii) for the conduct of a 'special audit'. It is also held that without 'special audit' it will not be possible for the appellant to rebut the contentions of Ld. AO in the original or the impugned assessment order. It is further held that the conduct of 'special audit' was "Primary" direction, and the appellant should have complied it, especially when Honourable High Court, as well as Hon. ITAT have stated that its books of account may not be reflecting the true and correct affairs of appellant. It is simultaneously held that conduct of "special audit' was a primary requirement for decision on all other matters
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in the original, or, impugned assessment order, to support the averments of the appellant. As such, in my considered opinion, the time limit of this case will fall under the provisions of Sec. 153(3)(ii) of the IT Act. Ld. AO has not issued a speaking order on this issue, while simultaneously, the appellant has not contented the conclusion of Ld. AO on this provision. The contentions of the appellant are generalized and are rejected as per the above a predominant discussion. It is held that there existed 'compulsion'
to comply with the directions for conduct of special Audit' by Hon. ITAT and accordingly, the time limits are governed by provisions of Sec. 153(3) (ii) of the IT Act, 1961. For ready reference, the timeline of this case is as follows:
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Prayer
In view of the above facts and circumstances, discussion and submission made by the undersigned, it humbly prayed that the order of the Ld./AO may kindly be held and therefore, the appeal of the assessee may kindly be dismissed.”
6. Heard the Ld. Representatives of the parties and perused the materials available on records. The primary issue raised by the assessee through the grounds of appeal pertains to limitation. It has been contended on behalf of the assessee that the impugned assessment is barred by limitation. Before
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adverting to the contention of the assessee. The relevant statutory provision as relied by it, is reproduced for the sake of clarity: -
“153(2A) Notwithstanding anything contained in sub-sections (1) and (2), in relation jo the assessment year commencing on the 1st day of April, 1971, and any subsequent assessment year, an order of fresh assessment in pursuance of an order under section 250 or section 254 or section 263 or section 264, setting aside or cancelling an assessment, may be made at any time before the expiry of one year from the end of the financial year in which the order under section 250 or section 254 is received by the Chief
Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Chief Commissioner or Commissioner:
Provided that where the order under section 250 or section 254 is received by the Chief Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Chief
Commissioner or Commissioner, on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such an order of fresh assessment may be made at any time up to the 31st day of March, 2002.] .”
7. On the other hand, as per Revenue, provisions of section 153(3)(ii) of the Act are applicable which is reproduced as under:
-
“153(3)(ii) The provisions of sub-section (1) and (2) shall not apply to the following classes of assessments, reassessments and re-computations which may, [subject to the provisions of sub-section (2A)] be completed at any time –
(ii) where the assessment, re-assessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 250, 254, 260, 262, 263
or 264 [or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act].”
8. The assessment order under challenge was passed on 25.08.2014. Admittedly, there is no dispute with regard to the fact that the impugned assessment order was passed subsequent to the directions of the Tribunal. It is noteworthy that Tribunal had earlier disposed of the appeal vide order dated 30.04.2008. The assessee had preferred an appeal u/s 260A of the Act, which was disposed of by the Hon’ble High Court vide judgment dated
28.08.2009. It is seen from the record that the assessee has Page 15 of 21

unsuccessfully challenged the issues relating to the appointment of the auditor as well as the question of limitation. The case of the assessee has throughout been that the Assessing Officer ought to have completed the assessment within sixty days from the date of the first appointment of the auditor. It is an undisputed fact that the assessee had challenged the appointment of auditor and question of limitation by filing
Income Tax Appeal No. 7 of 2012 for A.Y. 2003-04 before the Hon’ble Juri ictional High Court and thereafter carried the matter unsuccessfully up to the Hon’ble Supreme Court. Under these circumstances, it is apparent that the assessee had been prolonging the proceedings on one pretext or the other. It is also pertinent to note that the original assessment order was passed by the Assessing Officer as early as on 09.06.2006. The assessee preferred an appeal against the said order, which was dismissed by the Ld. CIT(A) vide order dated 07.12.2006. Aggrieved, the assessee further carried the matter before the Tribunal. Vide order dated 30.04.2008, co-ordinate Bench of ITAT observed that the assessee had not cooperated with the Assessing Officer in complying with statutory requirements, such as the production of books of account and facilitation of compulsory audit u/s 142(2A) of the Act. The Tribunal further observed that no conclusive finding could be recorded as to whether the expenses were incurred wholly and exclusively for business purposes unless the relevant material was examined by the Assessing
Officer. Accordingly, the Tribunal restored the matter back to the file of the Assessing Officer with a direction to carry out the special audit as per section 142(2A) of the Act and thereafter adjudicate the issue relating to disallowance of expenses. The assessee further challenged the said order before the Hon’ble
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Juri ictional High Court. Vide order dated 28.08.2009, Hon’ble
High Court was pleased to restore the issue to the Tribunal by observing as under:—
“From the record, it appears that on 08.03.2006, the AO has passed the order to get accounts audited by special auditor under section 142(2A) of the Income Tax Act. The said order was served upon the assessee on 13.3.2006. The time limit was fixed for 30 days for completing the special audit. Against the order the assessee has filed a writ petition before this Hon’ble Court which was dismissed. Subsequently SLP was filed which was also dismissed by the Hon'ble Supreme Court. Hence, the validity of the notice issued by the AO. Hence, the validity of the notice issued by the AO on 8.3.2006 attains the finality vide the said notice he has directed for the special audit.
Before us, the question is as to whether the assessment made by the AO was barred by limitation or not. Section 153 of the Income Tax Act deals with time limit for completion of the assessment. As per Clause (iii) to Explanation 1of section 153, the period commencing from the date on which the AO directs the assessee to get his account audited under section 142(2A) till the last day on which assessee was required to furnish the report of such audit would be excluded for the purpose of limitation.
pertaining to assessment order. In the instant case, the A.O. has directed the assessee to get his account audited by his letter - dated 8.3.2006 and the tine given, the assessee to furnish the report within. 30 days after receiving the letter. The letter was served on the assessee on 13.3.2006. Thus, special’ audit report was supposed to be furnished within 30 days.
from the said date i.e. 13.3.2006. However, from the record, it is not evident that as to under what circumstances the special audit was not completed within the stipulated period of 30 days or whether the period is extended by the AO. It is also not evident as to whether the assessee has cooperated with the auditor Not. As these questions of fact has not been dealt by the Tribunal in its impugned order and as such we set aside the impugned order passed by the Tribunal and remit the matter to examine the aforesaid questions of fact and record a categorical finding after examining the entire evidence as per law and pass necessary order de novo by providing a reasonable opportunity to the assessee. The Tribunal will be at liberty, in the interest of justice, to admit the fresh evidence, if need be.”
9. In pursuance of the direction of the Hon’ble Juri ictional
High Court, the Tribunal, vide order dated 05.01.2012, passed the following directions: -
“6. In the instant case, admittedly the Assessing Officer has issued a letter for getting the accounts audited on 8.3.2006 which was served upon the assessee on 13.3.2006. Therefore, the assessee was required to get its accounts audited upto 12.4.2006. In normal course of assessment in the present case, the Assessing Officer was required to complete the assessment upto 31.3.2006 but on 8.3.2006 he wrote a letter to the assessee for getting its accounts audited. Therefore, the period from Page 17 of 21

cooperation on the part of the assessee and, consequently, proceeded to frame the assessment. During the course of assessment proceedings, the Assessing Officer also directed the assessee to furnish its books of accounts. However, according to the Assessing Officer, books of account were not produced by the assessee. As far as the issues relating to whether the original assessment framed u/s 144 of the Act in the year 2006 was barred by limitation and whether the direction for special audit was valid, the same are settled against the assessee having attained finality, as the assessee did not succeed before the Hon’ble Juri ictional High Court as well as before the Hon’ble
Supreme Court. The Tribunal’s order dated 05.01.2012 was challenged by the assessee before the Hon’ble Juri ictional High
Court and the same was rejected. Consequently, the original direction of the Tribunal passed vide order dated 30.04.2008, as reiterated in the order dated
05.01.2012
in ITA
No.
119/LKW/2007, remained operative. Though it is the contention of the assessee that no stay was operating against the said orders, no supporting evidence has been placed on record in this regard. In view of the above facts and circumstances of the present case, we are of the considered opinion that the impugned assessment order is not hit by limitation. Accordingly, we find no merit in the contention of the assessee that the assessment order is barred by limitation.
11. Now, coming to the grounds raised against the disallowance of deduction u/s 80P of the Act being a cooperative society, we have heard extensively the Ld. Representatives of the parties on the issue of allowability of deduction u/s 80P of the Act. The Ld. Sr. Counsel for the assessee, vehemently argued
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that the authorities below failed to appreciate the fact that, on identical facts and circumstances, the Assessing Officer had allowed the deduction u/s 80P of the Act in the assessee’s own case for other assessment years. It was further contended, that in those years, the accounts of the assessee were subjected to special audit conducted by another Chartered Accountant. It was also contended that the assessee had no confidence in the Chartered Accountant who was appointed by the Assessing
Officer for carrying out the special audit in the year under consideration.
12. On the other hand, the Ld. Departmental Representative
(DR), pointed out that the Assessing Authority had allowed substantial deduction by adopting a liberal approach. He took us through the impugned assessment order dated 28.08.2014, passed u/s 144/251/254 of the Act. From the records, we find that the conduct of the assessee has been that of negligence and avoidance. Despite having failed to persuade the higher appellate forums, the assessee did not subject its accounts to special audit. Moreover, it is also recorded and observed by the Assessing Officer that the assessee had grossly failed in furnishing complete books of account along with supporting evidences. He was constrained to understand as to why the assessee, being an instrumentality of the Government of the State of Uttar Pradesh, was afraid from getting its accounts audited by a particular auditor. Even if, it is assumed that there was any apprehension of prejudice, the assessee had all grounds to challenge such an action in accordance with law. Instead, the assessee chose not to get its accounts audited and in utter disregard of the findings and directions of the higher authorities,
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decided not to place before the Assessing Officer, any audited accounts. In the absence of audited accounts disclosing a true and correct picture of the financial affairs of the assessee and in the absence of supporting evidences to substantiate that the expenses were incurred wholly and exclusively for the purposes, the Assessing Officer was justified in disallowing the deductions claimed. The assessee has also failed to bring on record any material to show that it had subsequently complied with the directions, or had placed before the Assessing Officer, the requisite evidences in support of the expenditure claimed to have been incurred for the purposes as claimed. Under these undisputed facts, we do not see any reason to interfere in the finding of the Ld. CIT(A). The same is hereby affirmed. All the grounds raised in this appeal are dismissed.
13. In the result, the appeal of the assessee is dismissed.

Order pronounced in the open Court on 19/12/2025. [अनादी नाथ मिश्रा] [कुल भारत]
[ANADEE NATH MISSHRA]
[KUL BHARAT]
लेखा सदस्य/ACCOUNTANT MEMBER
उपाध्यक्ष/VICE PRESIDENT
ददनांक/DATED: 19/12/2025
Vijay Pal Singh, (Sr. PS)
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