DISTRICT CO-OPERTIVE SUGAR CANE SUPPLY LTD.,BAREILLY vs. ITO RANGE-1(1), BAREILLY
Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA
PER KUL BHARAT, VICE PRESIDENT.:
These two appeals by the assessee against two different orders of the Ld. Commissioner of Income Tax (Appeals), pertaining to the A.Y. 2016-17 and A.Y. 2018-19. 2. For the sake of convenience and brevity, both appeals were heard together and are being disposed of by way of consolidated order. First, we take up the ITA. No. 577/LKW/2024, pertaining to the A.Y. 2016-17. The assessee has raised the following grounds of appeal: -
ITA. No.577/LKW/2024
“1. That the Authorities below erred on facts and in law in making addition of Rs. 52,66,764/- i.r.o completed Assessment by resorting to proceedings u/s 154 of IT Act without considering that it is not a case of ‘mistake apparent from record and thus initiation of rectification proceedings is invalid, illegal ab initio and liable to be quashed.
2. That the Authorities below erred on facts and in law in not considering that the commission / grant receivable from sugar mills Rs. 52,66,764/- as ITA. Nos. 577 & 578/LKW/2024
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enhanced by the Ld AO is also eligible for deduction u/s 80P as there is no change in the nature of income.
3. That the Ld. C.1.T. (A) erred on facts and in law in not considering that when part of the commission income from sugar mills has already been allowed for deduction u/s 80P then the balance income shall also be eligible for deduction u/s 80P as there is no change in the nature of income.
4. That the Authorities below erred on facts and in law in not considering that when the entire income of the Society is exempt u/s 80P then any profit increased as a result of addition/ disallowance shall also be eligible for deduction u/s 80P.
5. That the addition made is highly excessive, contrary to the facts, law and principle of natural justice and without providing sufficient time and opportunity to have its Say on the reasons relied upon by CIT (A).”
3. It is transpired from the record that the present appeal is barred by limitation for 25 days. The assessee has filed an application seeking condonation of delay. It is stated on behalf of the assessee that the delay was caused because the brother of the Ld. Authorized Representative of the assessee was diagnosed with cancer. The Ld. AR for assessee was occupied with the medical emergency and was also not in a proper state of mind.
Therefore, an unintended delay occurred in filing the present appeal. It is submitted on behalf of the assessee that the delay is caused for bona fide reason and there was no deliberate Act on behalf of the assessee for such a delay. It is, therefore, prayed that the delay be condoned and the appeal be admitted for hearing.
4. On the contrary, the Ld. Departmental Representative opposed the submissions of the Ld. Counsel for the assessee and contended that there was no reasonable cause for filing the present appeal belatedly. He, therefore, contended that the appeal deserves to be dismissed on the ground of the limitation alone.
ITA. Nos. 577 & 578/LKW/2024
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Heard the Ld. Representatives of the parties and perused the material on record. There is a delay of 25 days in filing the present appeal. The reason for such delay is stated to be medical emergency caused by brother of Ld. AR was diagnosed with cancer. The Ld. Authorized Representative of the assessee was pre-occupied for attending the medical emergency and was also not in a proper state of mind. The reasons stated in the application is also supported with an affidavit. The Revenue has not brought any material to rebut the averments made by the assessee. Therefore, considering the facts of the present case, we hereby condone the delay of 25 days and admit the appeal for hearing on merits. 6. The assessee in this appeal has raised multiple grounds but only effective ground is regarding confirmation of addition of Rs. 52,66,764/- made by the Assessing Officer on account of commission income by rectifying the assessment order passed u/s 143(3) of the Act. 7. The facts in brief are that in this case the Assessing Officer (AO) had framed the assessment u/s 143(3) of the Act. Thereby, he assessed loss at Rs.36,34,947 (Rounded of at Rs.36,34,950/-) vide order dated 16.08.2018. Thereafter, on the basis of audit objection regarding commission income. The AO had observed that as per Form 26AS, the assessee had earned commission at Rs.1,13,49,264/- and claimed credit of tax deducted at source (TDS) of Rs.11,34,972/- on such commission income but the assessee had offered for taxes a sum of Rs.60,79,500/- and balance commission of Rs.52,66,764/- was categorized in the balance-sheet as under the head other receivable from the sugar mills. Therefore, treating it as mistake apparent on record, the Assessing Officer re-computed the income of the assessee and ITA. Nos. 577 & 578/LKW/2024 Page 4 of 21
made impugned addition of Rs.52,66,764/-. Aggrieved by this, the assessee preferred in appeal before the Ld. CIT(A), who also sustained the addition and dismissed the appeal of the assessee.
Now, the assessee is in appeal before this Tribunal.
8. Apropos to the grounds of appeal, Ld. Counsel for the assessee contended that the Ld. authorities below grossly failed to appreciate the fact that even if the addition is made on account of non-offer of the amount for taxes then also such amount would qualify for deduction u/s 80P of the Act since the deduction u/s 80P of the Act would be available on the income received by the assessee in the form of commission. He further contended that the authorities below have not considered the circular issued by CBDT dated 02.11.2016 and the decision of the Co-ordinate Bench of this Tribunal rendered in the case of ITO vs Co-operative Cane Development (2025) 174 taxmann.com
34 (Lucknow Trib.). He further reiterated the submissions as made in the written submissions. For the sake of clarity, the submissions are reproduced as under:-
“1O ON THE ISSUE OF GROUNDS OF APPEAL NO. 2, 3 & 4
With due respect, it is prayed that the Appellant is a Cane Society of Cane
Growers who are the members of the Cane Society. The appellant is registered under the U. P. Cooperative Societies Act by the