VRAHATAKAR SAHAKARI SANSTHA MARYADIT AMLETHA,AMLETHA vs. ITO-1, RATLAM

ITA 379/IND/2025Status: DisposedITAT Indore22 January 2026AY 2017-1810 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, in view of the principle of natural justice and noting that no prejudice would be caused to the revenue, decided to remand the matter back to the CIT(A) for adjudication afresh. The Tribunal acknowledged the assessee's prayer to restore the appeal to the CIT(A) for a proper adjudication and the revenue's agreement with this prayer, with a condition that the assessee should not seek unnecessary adjournments. The CIT(A) was directed to give the assessee an opportunity of hearing and pass an appropriate order, uninfluenced by the earlier order. The assessee was also directed to participate diligently in the hearings. The issue of the validity of the Section 250(6) compliance and the merits of the Section 80P deduction were effectively left undecided by the ITAT, as the matter was sent back to the first appellate authority. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Vrahatakar Sahakari Sanstha Maryadit, a co-operative society, filed its return for AY 2017-18 declaring Nil income after claiming deduction under Section 80P. The Assessing Officer (AO) denied this deduction, assessing total income at Rs. 20,95,570/-. The assessee appealed to the Commissioner of Income-Tax (Appeals) [CIT(A)], who dismissed the appeal for non-prosecution. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT). The assessee also sought to admit additional evidence before the ITAT.

What were the issues?

1. Whether the dismissal of the assessee's appeal by the CIT(A) for non-prosecution was valid, considering the mandate of Section 250(6) of the Income-tax Act, 1961, which requires the order to be in writing and state the points for determination, decision, and reasons. Assessee's Contention: The CIT(A) failed to comply with Section 250(6) by not providing a reasoned order, even though the dismissal was for non-prosecution. Revenue's Contention: The revenue agreed with the assessee's prayer to restore the matter to the CIT(A) for proper adjudication, with a request for the assessee not to seek unnecessary adjournments. 2. Whether the assessee, a Primary Agricultural Credit Co-operative Society (PACS), is eligible for deduction under Section 80P for its various income streams, including interest from loans to members, sale of agricultural inputs, PDS commission, and interest on deposits with a co-operative bank. Assessee's Contention: The AO incorrectly treated the assessee as a 'bank' and disallowed the deduction without proper examination. The assessee is a PACS, eligible for deduction under various sub-sections of Section 80P, supported by Supreme Court judgments like Mavilayi Service Co-op Bank Ltd. The AO ignored specific statutory provisions and judicial precedents. The AO's order was mechanical, non-speaking, and lacked factual adverse findings. Revenue's Contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 80P,Section 143(3),Section 139,Section 250(6)

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

For Appellant: Shri Kaide Kangsawala, AR
For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 12.01.2026Pronounced: 22.01.2026

Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first-appeal bearing DIN: ITBA/APL/S/250/2024-25/1073849333(1) dated 28.02.2025 passed by learned Commissioner of Income-Tax (Appeals)-Addl./JCIT(A)-4, Mumbai [“CIT(A)”] which in turn arises out of assessment-order dated 31.10.2019 passed by learned ITO-1, Ratlam [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).

Vrahatakar Sahakari Sanstha Maryadit ITA No. 379/Ind/2025 - AY 2017-18

2.

The background facts leading to present appeal are such that the assessee, a co-operative society, filed its return of incom

The order continues below.

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