KARAVALI SOUHARDA CREDIT COOPERATIVE LIMITED,DAVANAGERE vs. THE INCOME TAX OFFICER, WARD-1(3), DAVANAGERE

This appeal is filed by the assessee against the order dated 25.09.2023 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the AY 2016-17.

At the outset, there is a delay of 209 days in filing the appeal before the Tribunal. The assessee has filed affidavit stating that the order of the CIT(Appeals) was not served on the assessee and the assessee was unaware about it. The appellant could not see the proceedings in the e-filing portal and raised grievance on 18.11.2023, subsequently the grievance was closed by the AO on 10.4.2024. After much correspondence, in the last week of April, 2024 the appellant could know that his appeal has already been dismissed by the CIT(A). and subsequently the appeal was filed with a delay of 209 days which is due to technical glitches in the e-filing portal which is beyond the control of the appellant and therefore condonation of delay is requested.

After hearing both the parties, it is observed that there are sufficient reasons for the delay and following the judgment of the Hon'ble Apex Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others (1987) 167 ITR 471, delay in filing the appeal before the Tribunal is condoned.

Briefly stated the facts of the case are that the assessee is a Souharda Credit Cooperative and derives income from the banking activity, capital gain and other sources. It filed return of income on 22.09.2016 admitting total income at NIL. The case was selected for scrutiny and statutory notices issued to the assessee. The assessee submitted reply as called for. The AO noted from the documents furnished that the assessee derived income of Rs.52,51,302 and claimed deduction u/s. 80P on the entire income and declared taxable income at Nil. In this regard, show cause notice was issued to the assessee. The assessee’s claim was that the society is registered under the Karnataka Souharda Sahakari Act and is eligible for deduction u/s. 80P(2)(a)(i) of the Act and reliance was placed on the judgment of coordinate Bench of Tribunal in the case of M/s. Udaya Souharda Credit Coop. Society in dated 17.8.2018. The AO noted that the judgment of Hon’ble jurisdictional High Court on similar points has not been accepted and it has preferred appeal before the Hon’ble Supreme Court and the matter is pending there. The AO also noted that the assessee has different classes of members and they have no equal rights and violated the principle of mutuality and following the judgement of Hon’ble Apex Court in the case of Citizen Co-operative Society Ltd. vs ACIT reported in [2017] 84 taxmann.com 114 (SC) disallowed the deduction claimed u/s 80P of Rs.52,51,302. Aggrieved from the above order the assessee filed appeal before the ld. CIT(Appeals).