BOMBAY MERCANTILE CO-OPERATIVE BANK LTD,MUMBAI vs. ACIT CPC, BANGALORE

PER RAMIT KOCHAR, Accountant Member This appeal, filed by assessee, being ITA No. 2153/Mum/2017, is directed against appellate order dated 18.01.2017 passed by learned Commissioner of Income Tax (Appeals)-28, Mumbai (hereinafter called “the CIT(A)”), for assessment year 2015-16, the appellate proceedings had arisen before learned CIT(A) from intimation dated 12.11.2015 issued by learned Assessing Officer (hereinafter called “the AO”) u/s 143(1) of the Income-tax Act, 1961 (hereinafter called “the Act”) for AY 2015-16.

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(c) In any case and without prejudice, the claim of deduction u/s. 80P is highly debatable in nature and, as such, no adjustment in this regard could have been made by the A.O. in an intimation u/s. 143 (1} of the Act. 3.3 It is submitted that in the facts and the circumstances of the case, and in law, Ld. CIT (A) erred in confirming the action of the A.O. be held as bad in law. ON MERITS: 4.1 The Appellant submits that Ld. CIT(A) erred in confirming the action of the A.O in not allowing deduction to the Appellant u/s. 80P of the Act as claimed by it in its return of income since it fulfills all the conditions for claim of the deduction as required u/s. 80P. 4.2 It is submitted that in the facts and the circumstances of the case, and in law, the claim of deduction u/s. 80P was fully allowable. 5. The Appellant craves leave to add, alter, delete or modify all or any of the above grounds at the time of hearing”.

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Mitha who is Honorary Secretary of the assessee. The assessee has averred and claimed that no replies have so far been received to the aforesaid rectification application filed u/s 154 of the 1961 Act with Revenue. It is also averred that appeal against intimation dated 12.11.2015 passed by ACIT, CPC u/s 143(1) of the 1961 Act was required to be filed before the Ld. CIT(A) latest by 20.12.2016 but the same was filed by the assessee only on 29.01.2016 with delay of 40 days beyond the time stipulated for filing an appeal u/s 249(2) of the 1961 Act.. The assessee claimed before Ld. CIT(A) that due to bonafide reasons, an honest lapse has taken place which led to delay in filing of the appeal before the Ld. CIT(A). The assessee duly filed an application for condonation of delay supported by an affidavit dated 25-01-2016 explaining its bonafide in filing appeal late by 40 days beyond time prescribed u/s 249(2) of the 1961 Act. An affidavit dated 25.01.2016 executed by deponent Shri. Mohammed Hanif Mitha , an Honorary Secretary of the assessee was filed before learned CIT(A) explaining delay in filing of appeal late by 40 days beyond the time stipulated u/s 249(2) of the 1961 Act . The assessee also filed leave advice of Shri. Mohammed Hanif Mitha, of 17 days from 17.12.2015 to 02.01.2016 before learned CIT(A) . These documents/ evidences filed before learned CIT(A) are reproduced here under:-

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The Ld. CIT(A) after discussing elaborately several case laws rejected the contentions of the assessee and held that the assessee has not shown sufficient case for condoning the delay of 40 days in late filing of an appeal beyond the time stipulated u/s 249(2) of the 1961 Act . It 9

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was also held by learned CIT(A) that the assessee has availed an alternate remedy u/s. 154 of the Act and the assessee could always file an appeal against an order passed by the AO u/s. 154 of the Act. Thus, in nutshell the assessee was thrown at threshold by learned CIT(A) on technical ground of delay in filing an appeal late by 40 days beyond time prescribed by statute as well as on the ground of alternative remedy being availed by the assessee having filed an rectification application u/s. 154 of the 1961 Act. The ld. CIT(A) dismissed the appeal of the assessee filed against an intimation u/s. 143(1) of the Act, vide appellate orders dated 18.01.2017. 4.1 The assessee has now in come in an appeal before the tribunal and grounds has been raised by the assessee that it has been thrown at threshold on technical ground of delay in filing an appeal late by 40 days and doors of justice were shut to the assessee by learned CIT(A) without considering the plea of the assessee on merits of the case. The Ld. Counsel for the assessee submitted that the there was a claim of deduction of Rs. 1.26 crores set up by the assessee in its return of income u/s. 80P of the 1961 Act which was not allowed by Revenue vide intimation issued by CPC, Bangalore u/s. 143(1) of the Act while processing return of income, which has caused serious prejudice to the assessee. The assessee has filed an appeal before the Ld. CIT(A) late by 40 days beyond the time stipulated u/s 249(2) of the 1961 Act which was supported by an application praying for condonation of delay duly supported by an affidavit filed before the Ld. CIT(A) along with leave advise of the concerned person incharge of taxation matters. The said documents are placed in file . It was submitted that Ld. CIT(A) did not condone the delay and appeal was dismissed on account of delay in filing appeal late by 40 days beyond the time prescribed u/s 249(2) of the 1961 Act and also on the grounds that an alternative remedy by way of an rectification application u/s. 154 of the 1961 Act was filed by the assessee . It is stated by ld . counsel for the assessee that the said rectification

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application filed u/s 154 of the 1961 Act is still pending before the AO. It is prayed by learned counsel for the assessee that if the aforesaid delay is condoned by tribunal and the issues are restored back to learned CIT(A), the assessee would prove with cogent evidences its case on merits before learned CIT(A).It was stated that the Revenue had consistently allowed to the assessee claim of deduction u/s 80P of the Act. 4.2The Ld. DR on the other hand stated that Revenue has no objection if the matter is restored back to the file of Ld. CIT(A) for fresh adjudication. 5. We have considered rival contentions and have perused the material on record . We have observed that the assessee is an Employee’s Cooperative Credit Society which is stated to be engaged in providing financial accommodation and loans to its members. The assessee filed return of income on 22.09.2015 for the impugned assessment year 2015-16. The assessee’s return of income was processed by CPC, Bangalore u/s. 143(1) of the 1961 Act, wherein claim of the assessee for deduction of Rs.1,26,55,027/- u/s. 80P of the 1961 Act was denied to the assessee. The intimation u/s. 143(1) of the 1961 Act dated 12.11.2015 issued by ACIT,CPC, Bangalore denying the claim u/s 80P of the 1961 Act was stated to be received by assessee on notified email ID of the Chartered Accountant of the assessee on 20.11.2015. The assessee has claimed that it immediately filed electronic rectification request u/s 154 of the 1961 Act on 20.11.2015 itself followed with written rectification letter to the AO for grant of deduction u/s 80P of the 1961 Act. These averments are found mentioned in an affidavit dated 25.01.2016 executed by Deponent Shri Mohammed Hanif Mitha who is Honorary Secretary of the assessee. The assessee has averred and claimed that no replies have so far been received to the aforesaid rectification application filed u/s 154 of the 1961 Act with Revenue. It is also averred that an appeal against intimation dated 12.11.2015 passed by ACIT, CPC u/s

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143(1) of the 1961 Act was required to be filed before the Ld. CIT(A) latest by 20.12.2016 but the same was filed on 29.01.2016 with delay of 40 days beyond the time stipulated for filing of an appeal u/s 249(2) of the 1961 Act.. The assessee claimed before Ld. CIT(A) that due to bonofide reasons, an honest lapse has taken place which led to delay in filing of the appeal before the Ld. CIT(A). The assessee duly filed an application for condonation of delay supported by an affidavit dated 25-01-2016 explaining its bonafide in filing appeal late by 40 days beyond time prescribed u/s 249(2) of the 1961 Act. An affidavit dated 25.01.2016 executed by deponent Shri. Mohammed Hanif Mitha , an Hon’ble Secretary of the assessee was filed before learned CIT(A) explaining delay in filing of an appeal late by 40 days beyond the time stipulated u/s 249(2) of the 1961 Act. The said affidavit is reproduced above in preceding para’s of this order. The assessee filed an application before learned CIT(A) praying for condonation of delay in filing of an appeal late by 40 days beyond time prescribed u/s 249(2) of the 1961 Act which was supported by an affidavit as detailed above and an leave application approved by the employer of Honorary Secretary who was responsible for looking after tax matter. We have carefully gone through the contents of the said application filed by assessee praying for condonation of delay supported by an affidavit and leave approval advise. The assessee has explained that the relevant officer in charge of the tax matters was on leave and thereafter on joining he went out outside Mumbai for some office work which led to skipping of the attention . The learned CIT(A) rejected the condonation application and dismissed the appeal of the assessee at threshold on technical grounds of delay in filing of appeal late by 40 days beyond time stipulated u/s 249(2) of the 1961 Act as well on grounds that an alternative remedy is being availed by the assessee by way of rectification application u/s 154 of the 1961 Act. In our considered view , the assessee has shown sufficient cause for filing an appeal late by 40 days before learned CIT(A) and the said delay ought to have been condoned by learned CIT(A) , more so the assessee is

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vigilant as it immediately availed remedy of filing an rectification application u/s 154 of the 1961 Act on receipt of intimation of processing of return of income u/s 143(1) of the 1961 Act electronically by email. Thus we in exercise of our powers with a view to render substantial justice , condone the delay with respect to the filing of appeal by assessee late by 40 days with ld. CIT(A) and direct Ld. CIT(A) to admit appeal of the assessee. We are setting aside appellate order of ld. CIT(A) and restore the issues in this appeal back to the file of the Ld. CIT(A) for fresh adjudication of all the issue on merits in accordance with law. Needless to say that Ld. CIT(A) shall grant proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law. The ld. CIT(A) shall allow the assessee to file evidences which shall be admitted by learned CIT(A) and adjudicated on merits in accordance with law. The assessee is directed to appear before learned CIT(A) forthwith on receipt of this order and file necessary evidence to justify claim of deduction u/s 80P of the 1961 Act as the onus is on the assessee to justify that its claim falls within four corners of provisions of Section 80P. We would like to clarify that we have not commented on the merits of the issue’s in this appeal. We order accordingly. 6. In the result, the appeal of the assessee is allowed for the statistical purposes. order pronounced in the open court on 07.09.2018 आदेश की घोषणा खुऱे न्यायाऱय में ददनांकः 07.09.2018 को की गई । Sd/- Sd/- (MAHAVIR SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, dated: 07.09.2018 Nishant Verma Sr. Private Secretary

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copy to… 1. The appellant 2. The Respondent 3. The CIT(A) – Concerned, Mumbai 4. The CIT- Concerned, Mumbai 5. The DR Bench, 6. Master File // Tue copy// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI