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Facts
The assessee, a registered cooperative society, appealed against the disallowance of deduction under Section 80P of the Income Tax Act. The appeals were filed after an inordinate delay, with the Ld. CIT(A) dismissing them for failing to provide a satisfactory explanation for the delay. The assessee's appeals before the Tribunal also lacked cogent reasons for the delay.
Held
The Tribunal observed that the assessee failed to provide any justifiable reason for the inordinate delay in filing appeals before the Ld. CIT(A) and subsequently before the Tribunal. Citing various judicial precedents, the Tribunal held that delay cannot be condoned without a sufficient cause and that the assessee was not diligent in pursuing their rights.
Key Issues
The primary issue was whether the delay in filing the appeals by the assessee before the Ld. CIT(A) and subsequently before the Tribunal was to be condoned. The secondary issue, which was not reached due to the delay, concerned the denial of deduction under Section 80P of the Income Tax Act.
Sections Cited
Section 80P(2)(d), Section 80P(4), Section 143(1), Section 154, Section 80P(2)(a)(i), Section 80P2(a)(iii) & (iv), Section 80P(2)(c), Section 5 of the Limitation Act
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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI BIJAYANANDA PRUSETH
O R D E R PER BENCH:
These are appeals filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeal), (in short “Ld. CIT(A)”), ADDL/JCIT (A)-5, Kolkata vide orders dated 15.01.2025 & 09.01.2025 passed for A.Y. 2012-13, 2015-16, 2016-17 & 2018-19. Since common facts and issues for consideration are involved for all years under consideration, all the appeals filed by the assessee are being taken up for together.
& 91/Srt/2025 Navgam Vibhag Seva Sahkari Mandli Ltd. vs. ITO & Mogar Partapore Vibhag Seva Sahkari Mandli Ltd. vs. DCIT Asst. Year –2012-13, 2015-16, 2016-17, 2018-19 - 2–
The assessee has raised the following grounds of appeal:
ITA No. 86/Srt/2025 (A.Y. 2012-13) “1. The learned (AO) CPC-Bengaluru has erred in making addition suo motu of Rs. 2,87,850/- while processing the return of income U/s 143(1) of the Act got the year under consideration and further ejecting the plea of the assessee society made u/s 154 of the Act towards Co-operative Society deduction disallowed under section u/s SOP which is contrary to law hence required to be quashed.
The learned (AO) CPC-Bengaluru without providing an opportunity of being heard suo motu rejected the claim of Rs. 2,87,850/- towards Co-operative Society deduction disallowed under section u/s 80P which is against the principal of natural justice hence addition made by learned AO is against the settled law.
The learned (AO) CPC-Bengaluru without having jurisdiction to determine the allowability of deduction u/s 80P of the Act suo motu rejected the claim of Rs. 2,87,850/- towards Co-operative Society deduction disallowed under section u/s 8OP which is void ab initio hence rejection of deduction is bad in law.
The learned (AO) CPC-Bengaluru as well as CIT(A)/ NFAC has erred in making addition to the income of the assesse society of Rs.2,87,496/- towards Providing Co-op Dividend & Co-op Interest u/s 80P(2)(d).
The Learned CIT(A)/ NFAC has erred in rejecting the delay condone petition of the assessee society for filing the appeal within prescribed time and dismissed the appeal without going through merits of the case which is unjustified and bad in law.
In finance Act, 2006, section 80P(4) inserted to withdraw exemption U/s 80P to tax co-operative bank. There is no-amendment in finance act 2006 or then after to withdraw exemption U/s 80P(2)(d) which exempt dividend and interest income of co- operative society from other co-operative societies (where co-operative bank is one kind of co-operative society only).
The Appellant craved leave to Add, Alter, deletes, amend or rescind any of the above grounds of appeal.”
(A.Y. 2015-16) “1. The learned (AO) CPC-Bengaluru without providing an opportunity of being heard suo motu rejected the claim of Rs. 8,00,415/- towards Co-operative Society deduction disallowed under section u/s 80P which is against the principal of natural justice hence addition made by learned AO is against the settled law. 2. The learned (AO) CPC-Bengaluru without having jurisdiction to determine the allowability of deduction u/s 80P of the Act suo motu rejected the claim of Rs.
& 91/Srt/2025 Navgam Vibhag Seva Sahkari Mandli Ltd. vs. ITO & Mogar Partapore Vibhag Seva Sahkari Mandli Ltd. vs. DCIT Asst. Year –2012-13, 2015-16, 2016-17, 2018-19 - 3– 8,00,415/- towards Co-operative Society deduction disallowed under section u/s 80P which is void ab initio hence rejection of deduction is bad in law.
The learned (AO) CPC-Bengaluru erred in making addition to the income of the assesse society of Rs. 1,26,185/-towards Providing Credit Facility to Members which is admissible as deduction u/s 80P(2)(a)(i).
The learned (AO) CPC-Bengaluru erred in making addition to the income of the assesse society of Rs.6,50,174/- towards Providing Co-op Dividend & Co-op Interest u/s 80P(2)(d).
The learned (AO) CPC-Bengaluru erred in making addition to the income of the assesse society of Rs. 29,545/- towards Agriculture Products & Implements u/s 80P2(a)(iii) & (iv).”
(A.Y. 2016-17) “1. The learned (AO) CPC-Bengaluru has erred in making addition of Rs. 6,72,620/- towards Dividend received from other Co-operative Society deduction disallowed under section u/s 80P(2)(d) which is contrary to law hence required to be quashed.
The learned (AO) CPC-Bengaluru without providing an opportunity of being heard suo motu rejected the claim of Rs. 6,72,620/- towards Dividend received from other Co-operative Society deduction disallowed under section u/s 80P(2)(d) which is against the principal of natural justice hence addition made by learned AO is against the settled law.
The learned (AO) CPC-Bengaluru without having jurisdiction to determine the allowability of deduction u/s 80P of the Act suo motu rejected the claim of Rs. 6,72,620/- towards Dividend received from other Co-operative Society deduction disallowed under section u/s 80P(2)(d) which is void ab initio hence rejection of deduction is bad in law.
The Learned CIT(A)/ NFAC has erred in rejecting the delay condone petition of the assessee society for filling the appeal within prescribed time and dismissed the appeal without going through merits of the case which is unjustified and bad in law.
In finance Act, 2006, section 80P(4) inserted to withdraw exemption U/s 80P to tax co-operative bank. There is no-amendment in finance act 2006 or then after to withdraw exemption U/s 80P(2)(d) which exempt dividend and interest income of co- operative society from other co-operative societies (where co-operative bank is one kind of co-operative society only).
The Appellant craved leave to Add, Alter, deletes, amend or rescind any of the above grounds of appeal.”
& 91/Srt/2025 Navgam Vibhag Seva Sahkari Mandli Ltd. vs. ITO & Mogar Partapore Vibhag Seva Sahkari Mandli Ltd. vs. DCIT Asst. Year –2012-13, 2015-16, 2016-17, 2018-19 - 4– ITA No. 89/Srt/2025 (A.Y. 2018-19) “1. The learned (AO) CPC-Bengaluru has erred in making addition of Rs. 7,41,364/- (7,68,905 minus 27,541,) towards Dividend received from other Co- operative Society deduction disallowed under section u/s 80P(2)(d) which is contrary to law hence required to be quashed.
The learned (AO) CPC-Bengaluru without providing an opportunity of being heard suo motu rejected the claim of Rs. 7,41,364/- (7,68,905 minus 27,541,) towards Dividend received from other Co-operative Society deduction disallowed under section u/s 80P(2)(d) which is against the principal of natural justice hence addition made by learned AO is against the settled law.
The learned (AO) CPC-Bengaluru without having jurisdiction to determine the allowability of deduction u/s 80P of the Act suo motu rejected the claim of Rs. 7,41,364/- (7,68,905 minus 27,541,) towards Dividend received from other Co- operative Society deduction disallowed under section u/s 80P(2)(d) which is voidab initio hence rejection of deduction is bad in law.
The Learned CIT(A)/ NFAC has erred in rejecting the delay condone petition of the assessee society for filling the appeal within prescribed time and dismissed the appeal without going through merits of the case which is unjustified and bad in law.
In finance Act, 2006, section 80P(4) inserted to withdraw exemption U/s 80P to tax co-operative bank. There is no-amendment in finance act 2006 or then after to withdraw exemption U/s 80P(2)(d) which exempt dividend and interest income of co- operative society from other co-operative societies (where co-operative bank is one kind of co-operative society only).
The Appellant craved leave to Add, Alter, deletes, amend or rescind any of the above grounds of Appeal.”
(A.Y. 2015-16) “1. The learned (AO) CPC-Bengaluru has erred in making addition of Rs. 16,86,550/- towards Co-operative Society deduction disallowed under section u/s 80P which is contrary to law hence required to be quashed.
The learned (AO) CPC-Bengaluru without providing an opportunity of being heard suo motu rejected the claim of Rs. 16,86,550/- towards Co-operative Society deduction disallowed under section u/s 80P which is against the principal of natural justice hence addition made by learned AO is against the settled law.
The learned (AO) CPC-Bengaluru without having jurisdiction to determine the allowability of deduction u/s 80P of the Act suo motu rejected the claim of Rs. 16,86,550/- towards Co-operative Society deduction disallowed under section u/s 80P which is voidab initio hence rejection of deduction is bad in law.
ITA Nos.86to89/Srt/2025 & 91/Srt/2025 Navgam Vibhag Seva Sahkari Mandli Ltd. vs. ITO & Mogar Partapore Vibhag Seva Sahkari Mandli Ltd. vs. DCIT Asst. Year –2012-13, 2015-16, 2016-17, 2018-19 - 5– 4. The learned (AO) CPC-Bengaluru erred in making addition to the income of the assesse society of Rs. (2,88,116/-) towards Providing Credit Facility to Members which is admissible as deduction u/s 80P(2)(a)(i).
The learned (AO) CPC-Bengaluru erred in making addition to the income of the assesse society of Rs.21,87,571/- towards Providing Co-op Dividend & Co-op Interest u/s 80P(2)(d).
The learned (AO) CPC-Bengaluru erred in making addition to the income of the assesse society of Rs. (75,744/-) towards Agriculture Products & Implements u/s 80P2(a)(iii) & (iv).
The learned (AO) CPC-Bengaluru erred in making addition to the income of the assesse society of Rs. 98,233/- towards Other Activities/Consumer Activities U/s 80P(2)(c).
The Learned CIT(A)/ NFAC has erred in rejecting the delay condone petition of the assessee society for filling the appeal within prescribed time and dismissed the appeal without going through merits of the case which is unjustified and bad in law.
In finance Act, 2006, section 80P(4) inserted to withdraw exemption U/s 80P to tax co-operative bank. There is no-amendment in finance act 2006 or then after to withdraw exemption U/s 80P (2) (d) which exempt dividend and interest income of co- operative society from other co-operative societies (where co-operative bank is one kind of co-operative society only).
The Appellant craved leave to Add, Alter, deletes, amend or rescind any of the above grounds of appeal.” We shall first take up assessee’s appeal in for A.Y. 2012-13. Since the facts and issues for consideration are largely similar for balance years as well, our observations for this year shall also be applied for the balance years in appeal before us, as well.
3. The brief facts of the case are that the assessee is a registered cooperative society in the status of AOP. Certain adjustments were made in the return of income filed by the assessee, wherein claim of deduction under Section 80P of the Act was denied. The assessee filed appeal before Ld. CIT(A) challenging the disallowance of deduction claimed under Section 80P & 91/Srt/2025 Navgam Vibhag Seva Sahkari Mandli Ltd. vs. ITO & Mogar Partapore Vibhag Seva Sahkari Mandli Ltd. vs. DCIT Asst. Year –2012-13, 2015-16, 2016-17, 2018-19 - 6– of the Act. However, Ld. CIT(A) noted that there was an inordinate delay of 3625 days in filing of appeal by the assessee against the order passed by CPC under Section 154 of the Act, rejecting the assessee’s rectification request on 13.03.2013. Ld. CIT(A) asked the assessee to file reasons for the inordinate delay of over 10 years in filing of appeal before him (3625 days delay) and on going through the Affidavit filed by the assessee, Ld. CIT(A) was of the view that the assessee has not been able to furnish any reason for the inordinate delay in filing of appeal before him. Accordingly, Ld. CIT(A) dismissed the appeal of the assessee by holding that the assessee has not been able to give any reasons for the inordinate delay in filing of appeal before him.
4. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A), dismissing the appeal of the assessee refusing to condone the delay in filing of appeal by the assessee. We note that for other years as well, the appeal of the assessee was dismissed on account of inordinate delay in filing of appeal before Ld. CIT(A). There was a 2865 days delay in filing of appeal before Ld. CIT(A) for A.Y. 2015-16, 2509 days delay in filing of appeal before Ld. CIT(A) for A.Y. 2016-17, 1781 days delay in filing of appeal before Ld. CIT(A) for A.Y. 2018-19 and in the case of Mogar Partapore Vibhag Seva Sahkari Mandli Ltd. there was a 3105 days delay in filing of appeal for A.Y. 2015-16. The nature of disallowance is similar for all the years before us.
5. Before us, the assessee has challenged the order of Ld. CIT(A) refusing to condone the delay in filing of appeal.
& 91/Srt/2025 Navgam Vibhag Seva Sahkari Mandli Ltd. vs. ITO & Mogar Partapore Vibhag Seva Sahkari Mandli Ltd. vs. DCIT Asst. Year –2012-13, 2015-16, 2016-17, 2018-19 - 7– 6. On going through the facts of the instant case, we observe that for all the years under consideration, there has been an inordinate delay in filing of appeal by the assessee before Ld. CIT(A). Even before us, the assessee has not been able to give any cogent reason for such inordinate delay in filing of appeal before Ld. CIT(A).
In the case of Mani Mandir Sewa Nyas Samiti Ramghat Ayodhya vs. CIT [2020] 119 taxmann.com 383 (SC), the Hon'ble Supreme Court held that where assessee sought for condonation of delay of four and half years in filing appeal against order of Tribunal on ground of ailment of manager but High Court declined to condone delay on ground that there was nothing on record to show that manager was suffering from ailments which did not permit him to take initiative for filing of appeal, SLP against said decision was to be dismissed. In the case of Amit Cotton Industries [2022] 136 taxmann.com 328 (SC), the Hon'ble Supreme Court held that delay of 520 days in filing special leave petition cannot be condoned without satisfactory explanation and hence, dismissed. In the case of Pundlik Jalam Patil v. Executive Engineer, Jalgaon Medium Project [2008] 17 SCC 448 (Para 6), the Hon'ble Supreme Court has made the following observations in this regard:
“13. Whether the respondent had satisfied the court that it had sufficient cause for not preferring the appeals within the prescribed time? Section 5 of the Limitation Act provides for extension of prescribed period of limitation in certain cases and confers jurisdiction upon the court to admit any application or any appeal after the prescribed period if it is satisfied that the appellant or applicant had sufficient cause for not preferring such appeal or application within the prescribed period.
& 91/Srt/2025 Navgam Vibhag Seva Sahkari Mandli Ltd. vs. ITO & Mogar Partapore Vibhag Seva Sahkari Mandli Ltd. vs. DCIT Asst. Year –2012-13, 2015-16, 2016-17, 2018-19 - 8– The applicant having set the machinery in motion cannot abandon it to resume it after number of years because the authority with whom it had entered into correspondence did not heed to its request to file appeals. The question is : Can the respondent/applicant in this case take advantage of its negligence, after lapse of number of years, of the decision of Government? It knew the exact grounds on which appeals could have been preferred. The law will presume that it knew of its right to file appeal against the award. Everybody is presumed to know law. It was its duty to prefer appeals before the court for consideration which it did not. There is no explanation forthcoming in this regard. The evidence on record suggest neglect of its own right for long time in preferring appeals. The court cannot enquire into belated and stale claims on the ground of equity. Delay defeats equity. The court helps those who are vigilant and `do not slumber over their rights.' The question for consideration is whether the averments disclosed any sufficient cause to condone the inordinate delay of 1724 days in filing the appeals.”
In the case of Tractors & Farm Equipments Ltd. [2007] 104 ITD 149 (Chennai) (TM), the ITAT held that where assessee justified delay of 310 days in filing appeal before Tribunal by stating that Commissioner (Appeals)’s order was misplaced and forgotten and when same was found while sorting out unwanted papers, steps were taken for preparation of appeal, the delay in filing of appeal before Tribunal could not be condoned as same was due to negligence and inaction on part of assessee and assessee could have very well avoided delay by exercise of due care and attention. While rejecting the assessee’s application for condonation of delay, the Tribunal made the following observations:
“The delay cannot be condoned simply because the appellant’s case is hard and calls for sympathy or merely out of benevolence to the party seeking relief. In granting the indulgence and condoning the delay, it must be proved beyond the shadow of doubt that the appellant was diligent and was not guilty of negligence, whatsoever. The sufficient cause within the contemplation of the limitation provision must be a cause which is beyond the control of the party invoking the aid of the provisions. The cause for the delay in filing the appeal, which by due care and attention, could have been avoided, cannot be a sufficient cause within the meaning of the limitation provision. Where no negligence, or inaction, or want of bona fides can be imputed to the appellant, a liberal construction of the provisions has to be made in order to advance substantial justice. Seekers of justice must come with clean hands.
& 91/Srt/2025 Navgam Vibhag Seva Sahkari Mandli Ltd. vs. ITO & Mogar Partapore Vibhag Seva Sahkari Mandli Ltd. vs. DCIT Asst. Year –2012-13, 2015-16, 2016-17, 2018-19 - 9– In the instant case, the assessee justified the delay only with reference to the affidavit of its director. In the said affidavit it was stated that the Commissioner (Appeal)’s order was misplaced and forgotten. It was found while sorting out the unwanted papers and thereafter steps were taken for the preparation of the appeal and consequently the delay was caused. That clearly showed that the delay was due to the negligence and inaction on the part of the assessee. The assessee could have very well avoided the delay by the exercise of due care and attention. There existed no sufficient and good reason for the delay of 310 days. Therefore, reasonings adduced by the Accountant Member were to be concurred with. [Para 8]”
The ITAT Hyderabad in the case of T. Kishan [2012] 23 taxmann.com 383 (Hyderabad) held that in condoning delay in filing appeal, it must be proved beyond shadow of doubt that assessee was diligent and was not guilty of negligence whatsoever.
In the case of C. I. Builders (P.) Ltd. vs. Principal Commissioner of Income-tax [2025] 174 taxmann.com 534 (Madhya Pradesh) [02-05- 2025], the High Court held that where assessee contended that there was delay of 6-7 years in filing appeal before Tribunal due to negligence of counsel engaged to file appeal, since assessee was aware of counsel's negligence when ex-parte orders was passed by Commissioner (Appeals) but assessee failed to exercise any care to enquire about status of second appeal and tried to shift responsibility towards his lawyer, appeal was to be dismissed as time barred.
In the case of Royal Stitches (P.) Ltd. vs. Deputy Commissioner of Income-tax [2023] 156 taxmann.com 361 (Madras)[21-09-2023], the High Court held that where assessee had not given 'sufficient cause' for condoning huge delay of 1072 days in filing appeal, delay could not be condoned.
& 91/Srt/2025 Navgam Vibhag Seva Sahkari Mandli Ltd. vs. ITO & Mogar Partapore Vibhag Seva Sahkari Mandli Ltd. vs. DCIT Asst. Year –2012-13, 2015-16, 2016-17, 2018-19 - 10–
In view of the judicial precedents on the subject and facts of the instant case, we are of the considered view that even before us the assessee has not been able to give any reason to justify the inordinate delay in filing of appeals before Ld. CIT(A). Accordingly, we find no infirmity in the order of Ld. CIT(A) refusing to condone the inordinate delay in filing of appeals before him, in absence of any justifiable reason being cited by the assessee. Accordingly, we are not inclined to interfere with the observations made by the Ld. CIT(A) while dismissing the appeals of the assessee.
In the result, all the appeals filed by the assessee are hereby dismissed. Order pronounced under proviso to Rule 34 of ITAT Rules, 1963 on 15/07/2025