MORE MAULI CO-OP CREDIT SOCIETY LIMITED MUMBAI,MUMBAI vs. WARD 22(2)(1), MUMBAI

Brief facts of the case are that the assessee is a cooperative credit society and had filed its return of income dated 22.09.2018 declaring total income at Rs.Nil after claiming exemption u/s 80P(2) of the Act amounting to Rs.63,61,338/- and the same was processed u/s 143(1) of the Act. The assessee’s case was selected for complete scrutiny under CASS on the issue of “deductions from total income under chapter VIA, investments/advances/loans”. Notices u/s. 143(2) and 142(1) of the Act were duly issued and served upon the assessee. The Learned Assessing Officer (“Ld. AO” for short) passed the assessment order dated 07.04.2021 u/s 144 r.w.s. 143(3A) & 143(3B) of the Act, being the best judgment assessment for the reason that the assessee has been non-compliant throughout the assessment proceeding, thereby determining the total income at 5650 & 5651/Mum/2025 M/s. More Mauli Co-op Credit Society Limited Rs.63,61,340/- after making an addition/disallowance on the said amount u/s 80P(2)(a)(i) of the Act.

Aggrieved, the assessee was in appeal before the first appellate authority, who vide order dated 11.07.2024 had dismissed the appeal filed by the assessee on the ground that the assessee has filed the appeal belatedly after the prescribed period of limitation and the assessee has failed to substantiate that there was ‘sufficient cause’ for the said delay.

Aggrieved, the assessee is in appeal before us, challenging the order of the Ld. CIT(A) on the abovementioned grounds.

We have heard the rival submissions and perused the materials available on record.

Before us, the Learned Authorized Representative (“Ld. AR” for short) for the assessee contended that the assessee being a co-operative credit society had earned interest income out of the investments made by it with co-operative banks and had claimed deduction u/s 80P(2)(a)(i) of the Act. Further, the Ld. AR contended that the assessment order dated 07.04.2021 was delivered to the assessee on the same date through Income Tax , 5650 & 5651/Mum/2025 M/s. More Mauli Co-op Credit Society Limited online portal and as the assessee had engaged a tax consultant who had the access to the portal failed to inform the same to the assessee. Further, the Ld. AR contended that the assessee’s erstwhile tax consultant had also not advised the assessee as to the subsequent course of action and as a result the assessee’s refunds were adjusted for the outstanding demands. The Ld. AR stated that it was brought to the knowledge of the assessee only when the entire refund for A.Y. 2024-25 was adjusted against the said demand on 25.11.2024, after which the assessee had replaced another chartered accountant to look into the tax matters of the assessee. It was only after that the assessee was advised to file an appeal before the Commissioner of Appeals, by which time the appeal was barred by limitation by 1355 days. The Ld. AR stated that the assessee had also filed an application along with an affidavit for condoning the said delay and the Ld. CIT(A) dismissed the same in limine stating that there is no ‘sufficient cause’ for the delay. The Ld. AR prayed that the assessee be given one more opportunity to present its case before the lower authorities for the reason that the issue on the merits is already covered in favour of the assessee by the decision of the Hon’ble Apex Court, High Courts and the co-ordinate Benches of the Tribunal.

The Learned Departmental Representative (“Ld. DR” for short), on the other hand, vehemently opposed to setting aside this issue to the lower authorities for the reason that the assessee has been non-complaint throughout the assessment proceeding and had also filed the appeal before the appellate authority with an inordinate delay beyond the period of limitation. The Ld. DR relied on the order of the lower authorities.

In the above factual matrix of the case, it is observed that the assessee has been non- compliant and hence the Ld. AO passed best judgment assessment against which the assessee preferred an appeal before the first appellate authority with a delay of 1355 days, which was not condoned by the Ld. CIT(A) citing that the assessee did not have ‘sufficient cause’ for the said delay and further it has been held that the assessee was negligent in not filing the appeal within the period of limitation. The Ld. DR pointed out the recalcitrant attitude of the assessee before the Ld. AO as well. Having considered the contentions, we are conscious of the fact that the assessee has preferred the first appeal with an inordinate delay, which according to the assessee is not attributable to the assessee who would anyways be benefited from filing the appeal, as the issue on the merits seems to be covered in favour of the assessee by the decisions of various Forums. We are also conscious of the fact that the assessee cannot be punished for the negligent act of the counsels engaged by it for adjudicating the matter before the lower authorities as there are several decisions of the higher forums which has held that the parties cannot suffer for the act of the counsels.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

The finding given in this appeal i.e. will apply mutatis mutandis to & 5651/M/2025 as well. Accordingly, all the three appeals filed by the assessee are hereby allowed for statistical purposes.