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Facts
The assessee, a Co-operative Society, challenged an order by the CIT(A) which dismissed their appeal. The dismissal was based on Section 249(4)(b) of the Income Tax Act, 1961, regarding payment of advance tax. The assessee contended that no advance tax was payable as their net taxable income after claiming deduction under Section 80P(2)(a)(i) was nil.
Held
The Tribunal held that Section 249(4)(b) of the Act was not applicable in this case as the assessee was not liable to pay advance tax. Therefore, the CIT(A) erred in dismissing the appeal at the admission stage.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal at the admission stage for non-payment of advance tax when no such tax was payable by the assessee.
Sections Cited
144, 147, 80P, 80P(2)(a)(i), 249(4)(b), 234B(1), 208
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, C” BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL "C” BENCH, MUMBAI SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER Om Sai Co-Operative Credit Society Ltd., Mumbai Mahesh Chembers, Room No.01, First Floor, Narshi Natha Street, Masjid Bunder, Mumbai- 400 009. Maharashtra [PAN:AAAA03944Q] …………. Appellant Vs Income Tax Officer Ward 25(3)(1), Mumbai Kautilya Bhavan, Mumbai – 400051. Maharashtra. …………. Respondent Appearance For the Appellant/Assessee : Shri Sushant N. Alme For the Respondent/Department : Shri Raj Singh Meel Date Conclusion of hearing : 26.08.2024 Pronouncement of order : 08.11.2024
O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. By way of the present the Assessee has challenged the order, dated 28/12/2023, National Faceless Appeal Centre (NFAC), New Delhi, [hereinafter referred to as the ‘CIT(A)’] whereby the Ld. CIT(A) had dismissed the appeal preferred by the Assessee against the Assessment Order, dated 25/12/2019, passed under Section 144 read with Section 147 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2016-2017. 2. The Appellant has raised following grounds of appeal : A.Y.2017-2018
“1. On the facts and in the circumstances of the case and in law the Income Tax Officer was not justified in disallowing the bonafide claim of deduction u/s 80P12 of the Income Tax Act, 1961 and the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Center (NPAC) in dismissing the appeal as infructuous and not deciding the appeal on merit as per the Grounds of Appeal
On the facts and in the circumstances of the case and in law the Le Income Tax Officer as well as Commissioner of Income Tax (Appeals National Faceless Appeal (NFAC) while disallowing the claim of deduction has wrongly invoked provision of section 80A(5) of the Act in view of the fact that the said provisions applicable from Assessment Year 2015-19 onwards.
On the facts and in the circumstances of the case and in law the Learned Income Tax Officer erred in making addition of gross income of Appellant Society instead of making addition of net profit earned. Therefore, he has tased the gross income instead of profits and gains of the business as defined in section 2(24) and section 28 of the Act.
On the facts and in the circumstances of the case and in law the Ld. Assessing Officer has wrongly observed that the Appellant Society has claimed deduction u/s 80P(2)(d) of the Act, however, factually, the Appellant Society has claimed deduction u/s 80P) of the Act. Thus, the Ld. Income Tax Officer has passed the order arbitrarily on the basis of surmises and conjectures and without any cogent evidence.
On the facts and in the circumstances of the case and in law the Learned Income Tax Officer has wrongly observed that the Appellant Society bas claimed deduction: u/s BDP123d) of the Act and based on the said wrung presumption has wrongly relied on the various Court Decisions which are not applicable in Appellant's case in view of the fact that the Appellant Society is exclusively engaged in providing credit facilities to members.
On the facts and in the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeal), National Faceless Appeal Centre has wrongly tailed to consider the income tax return filed in response to notice a/s 148 of the Act and dismissing the appeal without going into the merits of the case on the basis of information available on his record.
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On the facts and in the circumstances of the case and in law the Ld Commissioner of Income Tax (Appeal), National Faceless Appeal Centre is erred in not considering the fact that the net taxable income after the claim of deduction u/s 80P/2)(a)(i) of the Act is nil and therefore, the Appellant Society was not required to make payment of advance tax at the time of filing of appeal. Further, the provision of section 234B(1) r.w.s 208 of the Act were not applicable to this Assessment Year as the Appellant Society was not required to pay advance tax u/s 208 of the Act. 8. On the facts and in the circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeal), National Faceless Appeal Centre is erred in observing that the Appellant Society has not filed the return of income as well as not paid the amount equal to amount of advance tax which was payable by it and thereby dismissing the appeal. However, there is no tax payable as per the return of income and further, the Appellant has paid Rs. 5,00,000/- on 16-03-2020 before filing of first appeal
The appellant craves leave to add, amend, alter, modify, substitute, vary, delete, and rescind all or any of the above ground(s) of appeal before or at the time hearing.”
We have heard both the sides and perused the material on record.
There is a delay of 117 days in filing the appeal. In the affidavit filed along with application seeking condonation of delay, the Appellant has stated as under: “5. I further state and declare that our Manager on resuming the office have tried to find out CA or Advocate who handles the Appellate Matters. Finally in the month of June 2024 he approached B. R. Sawant, Chartered Accountant who handles Appellate matters to accept the assignment. 6. I further state and declare that due to the aforesaid facts and circumstance, the Society could not file the Appeal within prescribed time. 7. I further state and declare that the said delay in filing appeal is unintentional, bonafide and not deliberate and 3 A.Y.2017-2018
moreover Society does not stand to benefit due to delay in filing the appeal.”
7.1. We have no reasons to doubt the explanation provided by the Appellant. In the case of Collector of Land Acquisition Vs. Mst. Katiji & others AIR 1987 1353 (SC) the Hon’ble Supreme Court has, while dealing with the issue of condonation of delay, emphasized that substantial justice should prevail over technical considerations. Every day’s delay must be explained does not mean that a pedantic approach should be taken and that the aforesaid doctrine must be applied in a rational common sense and pragmatic manner, more so in circumstances where a litigant does not stand to benefit by lodging the appeal late (as is the case in appeal before us). Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. In the present the Appellant has provided sufficient explanation for delay in filing the appeal before the Tribunal. In our view, no benefit would have accrued to the Appellant by delaying filing of appeal. When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred. Therefore, delay of 117 days in filing the present appeal is condoned. Accordingly, we proceed to examine the grounds raised in the present appeal.
The facts emerging from the record are that the Assessee is a Co-operative Society registered under Maharashtra Societies Act, 1960. For the Assessment Year 2017-18, Assessment under Section 144 read with Section 147 of the Act was framed on the Appellant vide, Assessment Order dated 25/12/2019, whereby an addition of INR.71,56,152/- was made in the hands of the Appellant rejecting
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the Appellant’s claim for deduction under Section 80P(2)(a)(i) of the Act.
Being aggrieved, the Appellant preferred an appeal before the CIT(A) which was dismissed vide order, dated 28/12/2023. Hence the present appeal has been preferred by the Appellant before the Tribunal.
On perusal of the order impugned we find that the CIT(A) dismissed the appeal holding that the same was not liable to be admitted in view of the provisions contained in Section 249(4)(b) of the Act which read as under: “Section 249(4) 8[(4) No appeal under this Chapter shall be admitted unless at the time of filing of the appeal,-
(a) where a return has been filed by the assessee, the assessee has paid the tax due on the income returned by him; or (b) where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of advance tax which was payable by him” 8. On perusal of the above provisions contained in Section 249(4)(b) of the Act, we are of the view that the same are not applicable in the present case and therefore, the CIT(A) erred in dismissing the appeal at the admission stage without examining the merits by placing reliance on the same. In the present case neither advance tax was payable by the Appellant nor was any tax due on income returned by the Appellant since it was the contention of the Appellant that the Appellant was entitled to claim deduction under Section 80P(a)(i) of the Act. Thus, finding merit in the contention advanced on behalf of the Appellant, we set aside the order, dated 28/12/2023, passed by the CIT(A) with the directions to the CIT(A) to adjudicate all grounds raised in appeal filed by the Appellant
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before the CIT(A) on merits as per law after taking into consideration the submission and supporting documents filed by the Appellant. All the rights and contentions of the Appellant are left open. The CIT(A) is also directed to grant the Appellant a reasonable opportunity of being heard. In terms of the aforesaid, Ground No.1 raised by the appellant is allowed while all other grounds raised by the Assessee are dismissed as having been rendered infructuous.
In result, the present appeal preferred by the Assessee is allowed for statistical purposes.
Order pronounced on 08.11.2024. (Amarjit Singh) Judicial Member मुंबई Mumbai; िदनांक Dated : 08.11.2024 Milan, LDC
आदेश की "ितिलिप अ"ेिषत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant 2. ""थ" / The Respondent. आयकर आयु"/ The CIT 3. 4. "धान आयकर आयु" / Pr.CIT 5. िवभागीय "ितिनिध ,आयकर अपीलीय अिधकरण ,मुंबई / DR, ITAT, Mumbai 6. गाड" फाईल / Guard file. आदेशानुसार/ BY ORDER, स"ािपत "ित //// उप/सहायक पंजीकार /(Dy./Asstt.