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Facts
The assessee, a cooperative housing society, challenged an intimation u/s 143(1) by the CPC which disallowed a deduction u/s 80P(2)(d). The appeal was dismissed by the Addl. CIT(A) due to a 685-day delay, which the assessee attributed to lack of professional guidance and challenges faced by its senior citizen office bearers, particularly during the Covid period.
Held
The Tribunal found the CPC's disallowance u/s 80P(2)(d) under Section 143(1) to be erroneous, as such an adjustment is beyond the scope of 143(1) without prior intimation. It further held that on merits, the assessee, being a cooperative housing society, is entitled to the deduction u/s 80P(2)(d) for interest from cooperative banks. The AO was directed to allow the deduction.
Key Issues
Scope of adjustments under Section 143(1); entitlement of cooperative housing societies to deduction under Section 80P(2)(d); condonation of delay in filing appeal.
Sections Cited
143(1), 80P(2)(d), 249(2), Income Tax Act, 1961
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Income Tax Appellate Tribunal, “H (SMC
Before: SMT RENU JAUHRI & SHRI PAVAN KUMAR GADALE
ORDER PER RENU JAUHRI, AM: “ These two appeals are filed by the assessee against the separate orders of the Add. Commissioner of Income Tax (Appeals) – 1, Vadodara (in short “CIT(A)”) passed u/s 143(1) of the Income Tax Act, 1961 (in short “the Act”). 2. Since issues involved in these two appeals are identical, hence they are clubbed, and a consolidated order is passed. For the sake of convenience, ITA No.
On the facts and in the circumstances of the case and in law, the order of the Ld. ADDL/JCIT(A)-1, erroneously dismissed the appeal on the ground of rejection of petition for the condonation of delay, without going into the merits of the case, despite there being sufficient causes with the assessee for not filing the appeal in time as per section 249(2) of the Income Tax Act, 1961, which obstructed its action to file the appeal within the time limit. ` 2. On the facts and in the circumstances of the case and in law, the order of the Ld. ADDL/JCIT(A)-1, erroneously rejected the petition for condonation of delay, attributing it to negligence or inaction rather than to the constraints faced by the assessee preventing the timely filing of the appeal within the 30-day limit. 3 On the facts and in the circumstances of the case and in law, the order of the Ld. ADDL/JCIT(A)-1, erroneously disallowed the condonation of delay, failing to recognize that the term "sufficient cause" for condonation of delay should be interpreted liberally to advance substantial justice. 4. On the facts and in the circumstances of the case and in law, the order of the Ld. ADDL/JCIT(A)-1, erroneously disallowed the condonation of delay, not appreciating that the term "sufficient cause" should be interpreted pragmatically in a justice-oriented approach rather than a technical detection of sufficient cause for explaining every day's delay, as illustrated in the case of Collector of Land Acquisition vs Mst. Kati Ji AIR 1987 SC 1353. A pedantic approach should be avoided while dealing with an explanation of the delay, applying the doctrine in a rational and pragmatic manner. 5. The learned ADDL/JCIT(A)-1 erred in observing that the Appellant has not mentioned specific ground for delay in filing the appeal nor furnished anything to prove that it had acted diligently and was not guilty of negligence, though the circumstances for delay was explained in detail.
3 M/s Splendor Complex Chs Ltd , Mumbai 2. The brief facts are that the assessee is a cooperative housing society which filed its return declaring income of Rs. 3,240/- for the A.Y 2020-21 on 30.09.2020. The Centralized Processing Centre (in short “CPC”) issued intimation u/s 143(1) of the Act, computing the income at Rs. 1,34,480/- on account of disallowance of deduction of the Act of Rs. 1,31,41,535/-, u/s 80P(2)(d). Aggrieved with the order, the assessee filed an appeal before the National Faceless Appeal Centre, Delhi. However, vide order dated 21.03.2024 the assessee’s appeal was dismissed on account of delay of 685 days which was not condoned by the Ld. Addl.CIT(A).
Before us, the Ld. AR contended that the delay was on account of the fact that the assessee had no qualified staff / employees and the society affairs are being managed by honorary officer bearers. The office bearers of the society are mostly senior citizens. During and after Covid period, they could not cope up with the requirement to file appeal within time due to lack of knowledge and lack of proper professional advice. As such there was a reasonable cause for the delay in filing the appeal which should have been condoned by the Ld. Addl. CIT(A).
We have considered the rival submissions. It is seen that the assessment has been finalized u/s 143(1) by making disallowance u/s 80P(2)(d) of the Act, for which no opportunity appears to have been given to the assessee. It is clearly provided in the Section that before making any 4 ITA No. 2036/MUM/2024 M/s Splendor Complex Chs Ltd , Mumbai adjustment an intimation has to be given to the assessee. Moreover, disallowance of claim of deduction u/s 80P(2)(d) of the Act is beyond the scope of adjustments allowed to be made u/s 143(1) of the Act. Accordingly, we hold that the order of the CPC u/s 143(1) was erroneous. Even otherwise, on merits, the assessee being cooperative housing society is entitled to claim deduction u/s 80P(2)(d) of the Act in respect of interest on investments, received from cooperative banks. Accordingly, we direct the AO to allow the deduction u/s 80P(2)(d) of the Act. .A.Y 2021-22.
As the facts and circumstances in this appeal are identical to ITA No 2712/Mum/2024, for the A.Y 2020-21 (except variance in figures), the decision rendered in above paragraphs would apply mutatis mutandis to this appeal also. Accordingly, we allow the appeal of the assessee and direct the AO to grant the claim of deduction u/s 80P(2)(d) of the Act.
In the result, both the appeals filed by the assessee are allowed. Order pronounced in the open court on 25.07.2024. /- S Sd/- Sd/- (PAVAN KUMAR GADALE) (RENU JAUHRI) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 25/07/2024