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TMI Blog2015 (4) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the profit on sale of units of mutual funds as stated earlier. The assessee had not raised any issue with regard to denial of deduction under section 80P of the Act. The order of CIT(A) on such surmises was thus, incorrect. The second aspect of the issue is whether the assessee is entitled to the condonation of delay in filing the appeal late before CIT(A). The Hon’ble Supreme Court in MST. Katiji & Ors. [1987 (2) TMI 61 - SUPREME Court] had laid down the proposition that while considering the application for condonation of delay, sufficient cause pleaded by the party should be considered. The Hon’ble Supreme Court further held that sufficient cause for the purpose of condonation of delay should be interpreted with a view to do even-handed justice on merits in preference to approach which scuttles a decision on merits. The assessee before us has pleaded for the condonation of delay in filing the appeals late before the CIT(A), especially in the circumstances where the assessee was initially under the bonafide belief that it was not entitled to the deduction under section 80P of the Act and hence, the appeals were not filed in time. However, the issue now raised is the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d initial contributions were collected from the various members along with support contribution from the State Government Federation working in the field of Co-operative Societies. The major activity of the assessee was to provide credit guarantee to the small depositors of the various cooperative credit societies. For the same, the assessee was required to get the approval from Insurance Regulatory Authority of India (IRDA) and other authorities, which was not received by the assessee upto 31.03.2006. In view thereof, the collected contributions were invested into Government bonds / mutual funds and fixed deposits with other cooperative societies. The assessee was treating the said activity of providing credit guarantees as business of banking. The Assessing Officer rejecting the plea of the deduction under section 80P of the Act treated the revenue from sale of units as a separate taxable fund and worked out the net taxable income at ₹ 95,77,140/- in assessment year 2006-07. However, the Assessing Officer did not set off the loss on government securities amounting to ₹ 214,17,311/- against the gain from sale of units. The assessment in the case was completed and the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the decision was taken to abandon the project. However, since large parts of funds were locked up with Suvarna Sahakari Bank Ltd. which remained in liquidation between the years 2006 to 2009, the assessee was not wound up. However, because of the decision of abandoning the activity, the staff was curtailed and expenses were minimized. In view thereof, there was default in compliance to various acts and deeds which had to be carried on by the assessee. It was also pointed out by the learned Authorized Representative for the assessee that the assessee society was amalgamated into Maharashtra State Cooperative Societies Federation thereafter. Another plea raised by the learned Authorized Representative for the assessee was that because of the action of Assessing Officer in adopting gains arising from sale of securities as income of the assessee and not considering the loss arising therefrom, the real income has not been assessed in the hands of the assessee. 7. The learned Departmental Representative for the Revenue pointed out that the assessee had by an error claimed deduction under section 80P of the Act. It was further pointed out by the learned Departmental Representative fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4.Earlier, I was Chairman of MSGCL also. 6.In Maharashtra, many small-size / medium-size co-operative credit societies operate. These are called as PATSANSTHA. These credit societies are not under total control / overseeing of RBI. 5.MSGCL was an institution set-up with the lead from the Maharashtra State Government for the benefit of individual depositors. The reason of formation of MSGCL was the losses of individual depositors having fixed / saving deposits invested in various co-operative societies. Many small depositors suffered after the collapse of Bhudargad Co-operative Credit Society Limited. In the said event, life-time savings of many small depositors were lost. 6.After formation of MSGCL, various credit societies in Maharashtra became members of MSGCL. Capital was collected from various member credit societies of MSGCL. 7.As the prime intent of MSGCL was to provide risk cover / insurance to individual depositors, MSGCL was required to register with IRDA, i.e. Insurance Regulatory and Development Authority, India. As per the IRDA norms, reinsurance is necessary for any insurance activity. As such, correspondence was initialed with IRDA in this regard. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the MSGCL. The issues of merger of MSGCL into MSPFL were ongoing. Work of seeking government approvals was ongoing. Proper advice on the correctness of tax assessments was not received by MSGCL in that time. In this entire process, delay crept into the process of filing of appeals. 18. After proper guidance from the consultant, appeals were filed with prayer for condonation of delay. The said prayer was for condoning delay of - about 1,178 days for A.Y. 2006-07 - about 821 days for A.Y. 2007-08 - about 726 days for A.Y. 2008-09. 19. It is reiterated, the delay was purely un-intentional. MSGCL was always tax compliant as regards filing of returns, making TDS compliances, paying tax dues raised from time to time and so on. For Maharashtra State Co-op Credit Soc. Deposit Guarantee Corp. Ltd. (amalgamated into Rajya Sahakari Patsanstha Federation Limited) Omprakash Dadappa Koyte Chairman Place: Kopargaon District : Ahmadnagar 9. The assessee has in the appeal filed against the order of CIT(A) raised preliminary issue against the dismissal of appeal in limine. The CIT(A) had dismissed the condonation petition moved by the assessee holding that there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsonal machinery (no one in charge of the matter is directly hit or hurt by the judgment sought to be subjected to appeal) and the inherent bureaucratic methodology imbued with the note-making, file- pushing, and passing-on-the-buck ethos, delay on its part is less difficult to understand though more difficult to approve. In any event, the State which represents the collective cause of the community does not deserve a litigant non grata status. The Courts, therefore, have to be informed of the spirit and philosophy of the provision in the course of the interpretation of the expression sufficient cause . So also the same approach has to be evidenced in its application to matters at hand with the end in view to do even-handed justice on merits in preference to the approach which scuttles a decision on merits. 11. The assessee before us has pleaded for the condonation of delay in filing the appeals late before the CIT(A), especially in the circumstances where the assessee was initially under the bonafide belief that it was not entitled to the deduction under section 80P of the Act and hence, the appeals were not filed in time. However, the issue now raised is the correct computat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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