2023 (7) TMI 1161 - AT - Income Tax

Deduction u/s 80P(2)(i)(a) denied - treating the assessee as a cooperative bank than a cooperative society u/s.2(19) - HELD THAT - We find no merit in the Revenue s instant arguments seeking to invoke sec.80P(iv) of the Act in light of case of Mavilayi Service Cooperative Bank Ltd 2021 (1) TMI 488 - SUPREME COURT holding that an assessee s status has to be seen as per it s registration and nature of membership hardly forms the eligibility criteria to deny the impugned deduction. We accept the assessee s instant sole substantive grievance accordingly. Condonation of 1806 days delay as attributable to various communication gaps and other miscellaneous reasons - Hon ble apex court s landmark decision Collector, Land Acquisition vs., MST Katiji 1987 (2) TMI 61 - SUPREME COURT has settled the law long back that all such technical aspects must make way for the cause of substantial justice. We, therefore, condone the impugned delay.

Summary

Issues involved:
The main issue in this case is the disallowance of deduction under sec.80P(2)(i)(a) of the Income Tax Act, 1961, based on the classification of the assessee as a cooperative bank rather than a cooperative society u/s.2(19) of the Act.

Sec.80P(2)(i)(a) Deduction Disallowance:
The assessee's appeal for assessment year 2010-2011 contested the disallowance of deduction under sec.80P(2)(i)(a) of Rs. 62,89,701/- by the CIT(A) and the Assessing Officer, treating the assessee as a cooperative bank instead of a cooperative society u/s.2(19) of the Act.

The Revenue argued that the assessee was a cooperative bank with both regular and nominal members, seeking to invoke sec.80P(iv) of the Act. However, referencing the Supreme Court's decision in Mavilayi Service Cooperative Bank Ltd. vs. CIT [2021] 431 ITR 1 (SC), it was established that the assessee's status should be determined based on its registration, and the nature of membership does not affect eligibility for the deduction. Consequently, the assessee's grievance was accepted.

Delay Condonation:
The assessee's appeal, filed on 12.03.2029, suffered a delay of 1806 days due to communication gaps and miscellaneous reasons. Citing the Supreme Court's ruling in Collector, Land Acquisition vs. MST Katiji [1987] 167 ITR 471 (SC), which prioritizes substantial justice over technical aspects, the delay was condoned, and the appeal was allowed in favor of the assessee.

Final Decision:
The Appellate Tribunal ITAT PANAJI, comprising Shri Satbeer Singh Godara and Shri G.D. Padmahshali, allowed the assessee's appeal for assessment year 2010-2011, overturning the disallowance of deduction under sec.80P(2)(i)(a) amounting to Rs. 62,89,701/- by the lower authorities. The delay in filing the appeal was condoned, emphasizing the importance of substantial justice in legal proceedings.