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Facts
The assessee, a cooperative society, was assessed at Rs. 7,28,899/- under Section 143(3), with claimed deduction under Section 80P of Rs. 19,79,677/-. Additions were made for interest on fixed deposits (Rs. 1,44,837/-), dividend income (Rs. 2,75,000/-), and income from other activities (Rs. 3,09,062/-), as these were deemed not to qualify for 80P deduction. The Ld. CIT(A) dismissed the assessee's first appeal ex-parte due to non-compliance with notices, confirming the additions.
Held
The Tribunal condoned the delay of 319 days in filing the second appeal, finding it bonafide and not deliberate, owing to managerial changes and lack of awareness of the order. The Tribunal set aside the CIT(A)'s order and remanded the case back to the Ld. AO for a de-novo assessment, granting the assessee a final opportunity for full compliance. The assessee was directed to pay costs of Rs. 2,500/- to the Income Tax Department.
Key Issues
Whether the delay in filing the second appeal should be condoned; whether the CIT(A) was justified in dismissing the first appeal ex-parte; and whether the additions made by the AO and denial of Section 80P deduction were correct, considering the assessee's partial compliance and request for further opportunity.
Sections Cited
Section 253, Section 143(3), Section 80P, Section 246A, Section 250, Section 80P(2)(d)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M JOSHI
Per Paresh M Joshi, J.M.:
This is an Appeal filed by the Assessee under section 253 of
the income tax Act 1961,[ herein after referred to as the Act
for the sake of convenience & brevity] before this tribunal as
and by way of a second appeal. The Assessee is aggrieved by
the order bearing Number:-ITBA/APL/S/250/2024-
25/1067153793(1) dated 30/07/2024 passed by the Ld.
CIT(A) u/s 250 of the Act, which is herein after referred to as
the “Impugned order”. The Relevant Assessment year is
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2017-18 and the corresponding previous year period is from
01.04.2016 to 31.03.2017.
Factual Matrix
2.1 That as and by way of an Assessment order made u/s
143(3) of the Act, the total income of the Assessee was
computed & assessed at Rs. 7,28,899/-. ROI was of Rs. Nil
claiming deduction u/s 80P of Rs. 19,79,677/-. The
addition of Rs 1,44,837/- was made on account of interest
on fixed deposit with nationalised bank and such income
does not qualify for 80P deduction. The addition of Rs.
2,75,000/- was made on account of dividend income. Yet
another addition of Rs. 3,09,062/- was made on account of
income from “other activities”. That the aforesaid
assessment order bears no:- ITBA/AST/S/143(3)/2019-
20/1019550986(1) and that the same is dated 30/10/2019
which is herein after referred to as the “impugned
assessment order”
2.2 That the assessee being aggrieved by the aforesaid
“impugned assessment order” prefers the first appeal u/s
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246A of the Act before the Ld. CIT(A) who by the
“impugned order” had dismissed the first appeal of the
assessee on the grounds and reasons stated therein. The
core grounds and reasons for the dismissal of the first appeal
was as under:-
“4. Decision: 4.1 I have gone through the appeal filed by the appellant against order u/s 143(3) of the Act. The issue to be decided here is whether the AO is justified in disallowing the claim u/s. 80P of the Act. 4.2 In this regard, notice u/s 250 of the Act was issued to the appellant by the erstwhile Commissioner of Income Tax (NFAC). Another notice u/s 250 of the Act was issued. Again one more notice u/s 250 of the Act was issued and duly served upon the appellant. For natural justice one more opportunity has been given to the appellant vide notice dated 19.07.2024 fixing the date of hearing on 29.07.2024. All the notices were duly served upon the appellant to its registered E-mail Id. The tabular form of the notices issued to the appellant is as under: Sr. No. Date of issue Compliance Status Remarks notice date 1 24.01.2021 08.02.2021 Served No reply
2 25.06.2024 04.07.2024 Served No reply
3 10.07.2024 18.07.2024 Served No reply
4 19.07.2024 (final 29.07.2024 Served No reply opportunity)
4.3 The appellant has not filed any submission till date in response to the above notices. Despite several opportunities given to the appellant to make submission in support of his claim, there is no response from the appellant. It is the appellant's plea that the A.O. has erred in rejected the deduction u/s. 80P(2)(d). However, despite various opportunities given to the appellant, the appellant failed to comply with the said notices.
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4.4 In view of the above, it appears that the non-compliance to notices is deliberate as all the notices have been duly served upon the appellant on the registered email. No response has been received from the appellant till date. It is reasonable to infer from the continued non-compliance that the appellant is not serious to pursue its appeal.”
2.3 The assessee being aggrieved by the “impugned order” has
preferred the instant second appeal before this tribunal and has
raised the following grounds of appeal in the form no. 36 against
the “impugned order” which are as under:-
“1.The Id.CIT(A) was not justified in ex-parte dismissing the appeal of the appellant, without deciding the appeal on merits, and that a fair and meaningful opportunity was not available to the appellant to present his case. 2.The Id CIT(A) was not justified in confirming the addition of Rs. 7,28,900/- us 80P without considering the facts and circumstances of the case. 3.The appellant carves leave to add, amend OR modify any of the grounds of appeal.”
Record of Hearing
3.1 The hearing in the matter took place before this Tribunal
on 29.01.2026 when the Ld. AR for & on behalf of the
Assessee appeared before us & interalia contended that the
“Impugned Order” is bad in law, illegal & not Proper. It is in
the violation of the principles of natural justice. It therefore
deserves to be set aside. It was next contended that the
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registry of this tribunal has calculated the delay of 320 days
in filling the present second appeal. It was submitted that
the “impugned order” is dated 30/07/2024 and the instant
appeal ought to have been filed on or before 30/09/2024.
However the instant appeal was filed on 15/08/2024
resulting in delay of 319 days. A condonation of delay
application along with affidavits in support are placed on
record of this tribunal. With regard to delay it was submitted
that delay was not intentional and there are no malafide
conduct on the part of the assessee. The delay was bonafide.
It was further submitted that earlier manager of the assessee
society was one Mr. Rajesh Vani who was not aware of the
impugned order and that the same was not checked on the
portal. The assessee’s counsel too failed to inform the
assessee in this regard. On 17/12/2024 Shri Rajesh Vani
was transferred and on 18/12/2024 a new manager Mr.
Vijendra Singh Parmar took over who too was not aware
about passing of the “impugned order”. However in August
2025 when counsel was filling the income tax return the
assessee society came to know of the fact of the passing of
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the impugned order and then they proceeded to file the
present appeal. Reliance was placed on affidavit of Mr.
Rajesh Vani the earlier manager dt. 27/01/26 and that of
new manager Mr. Vijendra Singh Parmar dt. 27/01/26. Copy
of transfer order dt. 18/12/24 of Vijendra Singh Parmar was
too relied upon. These affidavits and transfer order are part
of condonation of delay application and were relied upon in
the course of hearing and contents were read out of all the
documents so placed on record. Per contra the Ld. DR for the
revenue stated that he leaves the issue of condonation of
delay on the wisdom of this tribunal. We after hearing both
the parties condone the delay as sufficient cause is shown
the delay is not deliberate. Reasons for delay are bonafidely
explained. Appeal admitted and taken up for hearing.
3.2 The Ld. AR then invited our attention to internal page 1,
unnumbered para 1 of the “impugned assessement order”
and submitted that in the assessment proceedings only part
compliance could be made by placing on record profit and
loss a/c, balance sheet, trading a/c and the remaining
compliance could not be made on details as sought by Ld.
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AO. Attention was then invited to the internal page 3 of the
“impugned assessment order” were in it is recorded by the
Ld. AO that the assessee has failed to furnish the evidence/
information in respect of claim for deduction u/s 80P. In
brief the Ld. AR stated that during the assessment
proceedings save and except few compliances as stated above,
the other compliances could not be made. In so far as the
“impugned order”is concerned it was submitted by Ld. AR
that assessee society is located in deep rural areas of MP and
so also it’s operations. The Ld. AR finally prayed that one
more opportunity be provided so that orders of lower
authorities at least could be on meritorious grounds and
assessee in this regard would cooperate with the dept. of
income tax. Per contra Ld. DR for the revenue submitted that
heleaves the issue to the wisdom of the bench. Hearing was
then concluded.
Observations Findings & conclusions
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4.1 We have to decide the legality, validity and proprietary of the
“impugned order” basis records of the case & the rival
submission canvassed before us.
4.2 We have carefully perused the records of the case and have
heard the submissions.
4.3 We basis records of the case & after hearing & upon
examining the rival contentions of the Ld. AR & the Ld. DR
canvassed before us, are of the considered opinion that In
the “impugned assessment order” part compliance was
made and now the assessee wants to make full compliance
and is seeking a final opportunity. The Ld. AR has assured
that if opportunity is provided all the necessary material,
information would be furnished to the Ld. AO without fail &
in time. The impugned order is not on merits too. In these
facts and circumstances we set aside the impugned order as
and by way of remand back to the file of Ld. AO on denovo
basis. We direct the assessse to do full compliance before Ld.
AO. Under the circumstances we direct the assessee to pay
cost of Rs. 2500/- to the dept. of income tax by a challan
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under the category “others”. No credit of the said amount
would be available to the assessee against any taxes, penalty,
interest etc.
4.4 In the premises drawn up by us, we set aside the
“impugned order” as and by way of remand back to the file
of Ld. AO on denovo basis.
Order
5.1 In the result the “Impugned order” is set aside as and by
way of remand back to the file of the Ld. AO with cost (supra).
5.2 The appeal of the assessee is allowed for statistical purpose.
Pronounced in open court on 06.02.2026.
Sd/- Sd/-
(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER
Indore Dated : 06/01/2026 Patel/Sr. PS
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Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore
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