2022 (5) TMI 1481 - AT - Income Tax

Tribunal allows Revenue's appeal delay due to Covid-19, upholds Assessee's deductions under Income Tax Act

Income Tax Officer, Non-Corporate Ward, Tamil Nadu Versus M/s. Irula Snake Catchers Industrial Co-operative Society Limited

Income Tax Officer, Non-Corporate Ward, Tamil Nadu Versus M/s. Irula Snake Catchers Industrial Co-operative Society Limited - TMI Issues:1. Condonation of delay in filing appeal due to Covid-19 pandemic.2. Disallowance of deduction u/s.80P(2) of the Income Tax Act.3. Taxability of interest income from cooperative banks.4. Taxability of charges received from video and still photography.Condonation of Delay:The Revenue filed an appeal against the CIT(A)'s order, which was delayed by 175 days. The Income Tax Officer attributed the delay to the Covid-19 pandemic and filed an application under Section 5 of the Limitation Act. The Tribunal, considering the circumstances and the Supreme Court's directions, condoned the delay and admitted the appeal for adjudication on merits.Disallowance of Deduction u/s.80P(2):The Assessee, a Co-operative Society promoting the interest of the 'IRULA' Community, claimed deduction u/s.80P(2) during assessment proceedings. The Assessing Officer disallowed the deduction, adding back interest income and video/still photography charges. The CIT(A) allowed the deduction related to u/s.80P(2) and video/still photography charges. The Revenue appealed, arguing that the bank interest and photography charges should be taxed differently.Taxability of Interest Income from Cooperative Banks:The Assessee received interest from a cooperative bank, 'TAICO.' The Tribunal considered precedents and observed that cooperative banks are first cooperative societies, entitled to deduction u/s.80P(2) of the Act. Citing judicial observations and the Supreme Court's ruling, the interest earned from the cooperative bank did not fall under income from other sources and was eligible for deduction.Taxability of Charges from Video and Still Photography:The Tribunal settled the issue of charges received from video and still photography. The Assessee argued that these charges were income by way of admission charges, ploughed back into the activities of the society. Referring to past assessments and the nature of the income, the Tribunal concluded that the income generated from camera charges was liable for deduction u/s.80P(2) of the Act. Consequently, the appeal of the Revenue was dismissed, affirming the deductions allowed by the CIT(A).In conclusion, the Tribunal upheld the deductions claimed by the Assessee under u/s.80P(2) and dismissed the Revenue's appeal. The judgment clarified the tax treatment of interest income from cooperative banks and charges received from video and still photography, providing a comprehensive analysis based on legal precedents and interpretations of the Income Tax Act.