2025 (4) TMI 146 - AT - Income Tax

Delay in filing the appeal before the Commissioner of Income Tax (Appeals) CIT(A) - Assessee vehemently argued that intimation u/s 143(1) was never communicated or served on the assessee either through email or in physical form and that the assessee came to know about adverse order against them when notice u/s 245 was served on assessee in July 2023 and that after obtaining copy of the order/ intimation of CPC the assessee filed appeal with only 75 days of delay - HELD THAT - We find that such facts were clearly mentioned in column -15 of Form-35 that intimation u/s 143(1) was not served. In our view the CIT(A) in such circumstances either ought to have obtained report from the jurisdictional AO and a specific submission on such issue from assessee. No such exercise was carried out by CIT(A). Admittedly the ld CIT(A) sought written submissions of the merit of the alleged additions. We find that in Stride Multitrade Private Limited 2021 (9) TMI 1008 - BOMBAY HIGH COURT held that when Ld. CIT(A) asking the petitioner (assessee) to furnish ground wise written submission on the grounds of appeal it would mean that condonation of delay application has been allowed by Ld. CIT(A). We find the assessee has filed affidavit of one of its members who is also authorised signatory and stated all such facts on oath. Thus keeping in view of the facts that there is no melafide or intentional delay in filing appeal before ld CIT(A) rather due to the facts explained hereinabove the order of ld CIT(A) on dismissing the appeal assessee is set aside. Deduction u/s 80P(2)(d) - We find that there are order of CPC that is at Serial No. 22 the deduction under section 80P(2)(d) is allowed and at serial No.27 it has not been allowed thus there is conflicting order/ adjustment which is not liable to be sustained. We further find that in Chheda Heights Co-operative Housing Society 2024 (12) TMI 1549 - ITAT MUMBAI it has been held that prior to AY 2021-22 such adjustment could be made within the scope of section 143(1). Similar view was taken in Chanderlok Co-operative Society 2024 (6) TMI 1441 - ITAT MUMBAI . Thus respectfully following the decisions of coordinate bench the appeal of the assessee is allowed.

Summary

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment include:

1. Whether the delay in filing the appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] should be condoned.

2. Whether the disallowance of the deduction under Section 80P(2)(d) of the Income Tax Act by the Assessing Officer (AO) was justified.

ISSUE-WISE DETAILED ANALYSIS

1. Condonation of Delay in Filing Appeal

Relevant Legal Framework and Precedents: The legal framework for condonation of delay involves assessing whether there was a reasonable cause for the delay. The principle established by the Jurisdictional High Court in Stride Multitrade Private Limited Vs ACIT suggests that if CIT(A) asks for ground-wise submissions, it implies that the delay has been condoned.

Court's Interpretation and Reasoning: The Tribunal noted that the CIT(A) did not issue a specific show cause notice regarding the delay, which implied that the delay was condoned. The Tribunal emphasized the principle that substantial justice should prevail over technicalities.

Key Evidence and Findings: The assessee argued that the intimation under Section 143(1) was not communicated and only became aware of it upon receiving a demand notice in 2023. The Tribunal found that the CIT(A) failed to obtain a report from the jurisdictional AO or seek a specific submission from the assessee on the delay issue.

Application of Law to Facts: The Tribunal applied the principle from the Stride Multitrade case, concluding that the CIT(A)'s actions implied condonation of delay. The Tribunal also considered an affidavit from the assessee's authorized signatory, supporting the claim of non-receipt of the intimation.

Treatment of Competing Arguments: The Tribunal favored the assessee's argument, noting the lack of evidence from the revenue to counter the claim of non-receipt of the intimation.

Conclusions: The Tribunal set aside the CIT(A)'s dismissal of the appeal due to delay, allowing the appeal to proceed on merits.

2. Disallowance of Deduction under Section 80P(2)(d)

Relevant Legal Framework and Precedents: Section 80P(2)(d) allows certain deductions for cooperative societies. The Tribunal referenced prior decisions, such as Chheda Heights Co-operative Housing Society Vs ITO, which clarified the scope of adjustments under Section 143(1).

Court's Interpretation and Reasoning: The Tribunal found conflicting entries in the CPC's order, where the deduction was both allowed and disallowed. This inconsistency was deemed unsustainable.

Key Evidence and Findings: The Tribunal noted the CPC's order had contradictory entries regarding the deduction, which supported the assessee's claim.

Application of Law to Facts: The Tribunal applied the precedent set in similar cases, determining that the adjustment made by the CPC was outside the permissible scope for the relevant assessment years.

Treatment of Competing Arguments: The Tribunal favored the assessee's position, supported by the cited precedents, over the revenue's argument for disallowance.

Conclusions: The Tribunal allowed the deduction under Section 80P(2)(d), finding the CPC's adjustment unjustified.

SIGNIFICANT HOLDINGS

The Tribunal established several core principles:

- The implied condonation of delay by CIT(A) when ground-wise submissions are requested, aligning with the Stride Multitrade precedent.

- The necessity for CIT(A) to seek specific submissions or reports when contesting delay claims, emphasizing substantial justice over procedural technicalities.

- The unsustainability of conflicting entries in CPC orders, affirming the allowance of deductions under Section 80P(2)(d) when justified by precedent.

Final Determinations on Each Issue:

- The Tribunal allowed the appeals for all assessment years, setting aside the CIT(A)'s dismissal due to delay and affirming the deduction under Section 80P(2)(d).