SRI ANJANEYA VIVIDODDESHA SOUHARDA SAHAKARI NIYAMITA,HARIHARA vs. THE INCOME TAX OFFICER, WARD-1, DAVANAGERE

We have heard both the parties and have perused the affidavit. For the sake of convenience, the contents of affidavits are extracted hereunder. “I, Rudramma K H, Chief Executive Officer of M/s. Sri. Anjaneya Vividoddesha Souharda Sahakari Niayamita having its PAN AAEAS1302A situated at No. 001, Near Grama Devote Temple, Gowdra Basappa Complex, Shimoga Road, Harihara — 577 601, do hereby solemnly affirm and state on oath as under: 1. The Deponent is a credit a cooperative society Governed by the Karnataka state Souharda Co-operative Act, 1997 was established in the year November, 2001. 2. The Deponent is filing return of income regularly and audited by the Chartered Accountant as per the provisions of the respective Act. 3. The assessment order for the AY 2017-18 was passed on 07/12/2019 and aggrieved by the impugned order, the Deponent had filed first appeal before the Hon'ble Commissioner of Income tax (appeal) National Faceless appeal centre, New Delhi. 4. The said appeal was dismissed by the Hon'ble Commissioner of Income tax (Appeal), National Faceless appeal centre as the appellants employees were viewing the notices in the mail and updating the concerned authority to take necessary action and the concerned authority had ignored the mail since they are already read by some else. Further, we were not able to view the notices and submitted/download notices/order which was duly brought to view the notices of the income tax department 5. That the issues involved in appeal are squarely covered by various High Court judgments in favour of the Appellant. Hence, the Appellant prays that its case may kindly be allowed to be contested in appeal on merits and should not be shunned away on the technical grounds of delay in filing of the appeal. To meet the ends of justice, it is humbly prayed that judicious view may kindly be taken while considering the condonation of delay. 6. That the Deponent preferred an appeal before the Hon'ble Tribunal and that the appeal is filed with a delay of 438 days which is on account of technical glitches in the e-proceedings and not noticed by the concerned authority for the above stated reason in para 4. 7. That I was advised by the legal consultant to file an appeal before the Hon'ble ITAT for relief but the appeal has already become barred by time limitation. Nevertheless, the appeal was filed before this Hon'ble ITAT on date 20th June, 2024

Perusal of the above affidavit would show that the NAFC office has not sent the mail at the correct mail Id due to which the staff personal of the assessee were not able to see the notices of income tax. Further there was some technical glitches also there due to which the assessee was not able to file appeal on time. These submissions made by the AR of the assessee remains unrebutted by the Ld DR. Therefore, we hereby condone the delay in filing the present appeal for the reasons mentioned in the affidavit.

Now we decided the appeal on merits.

Facts leading to the filing of present appeal are, the assessee, a Credit Co-operative society, registered under the Karnataka Souharda Co- operative Act, derives income from banking activities. It has claimed

Dissatisfied with the reply of the assessee the AO framed the assessment and denied the exemption of 80(P). The AO has basically relied on the judgment of Hon’ble Apex Court in the case of Citizen Cooperative society case dated 08.08.2017, in Civil Appeal Number- 10245 of 2017(84 taxmann.com 114), to hold that assessee being registered under Souharda Shekari Act is not akin to other Co-operative societies and hence it’s income cannot be treated as exempt lacking principle of mutuality.

Aggrieved with the order of the AO assessee filed appeal before the CIT(A), who dismissed the appeal of the assessee ex-party ignoring the mandate of section 250(6) of the Act.

Now the assessee has come up in appeal before us and raised following grounds.

At the outset the counsel for the assessee submitted that the AO has failed to appreciate that Souharda Society is also one form of Co- operative society.

Ld. DR relied on the orders of authorities below and vehemently contended that the AO’s view is correct and tenable in law.

After hearing both the parties, we observe that Ld CIT(A) has failed to specify whether any notice of hearing was actually served on assessee or not. Further the CIT(A) has also overlooked the provisions of section 250(6) of the Act, which mandates that the CIT(A) would decide each

Recently in the case of Sirisa Taluka ITA Number 1131/Bang/2024 dated 18.07.2024, which is authored by one of us the Bench has restored the matter to the file of AO with following observations

In view of the above we deem it appropriate that the matter would go back to AO for fresh adjudication in view of the guidelines of the Apex Court in the case of Mavilayi Service Co-operative Bank Ltd., & Ors. Vs. CIT(Supra). Needless to say that the AO will provide sufficient opportunities to the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes.