2022 (1) TMI 642 - AT - Income Tax

Tribunal Allows Appeals on COVID-19 Filing Delay & Upholds Deductions

The appeals of three assessees for A.Y. 2015-16, addressing delay due to COVID-19 lockdown, were allowed by the Tribunal, condoning the filing delay. ... Revision u/s 263 by CIT - AO had accepted these taxpayer identical section 80P(aa) deduction claims pertaining to the interest income derived from nationalized banks - Pr. CIT holds that the hon'ble apex court's decision in Totgars Co-operative Society Ltd. [2010 (2) TMI 3 - SUPREME COURT] as well as CIT vs. Nawanshahar Central Co-op Bank Ltd. [2005 (8) TMI 28 - SC ORDER] have already held that such deduction isn't available to a society like the assessee but banks only and also referred to the CBDT Circular No. 18/2015 to the very fact - HELD THAT:- Issue of as to whether a cooperative society is eligible for section 80P(aa) deduction qua, the interest income derived from deposits made in the nationalized banks is no more res integra as the Tribunal coordinate bench decision in [2021 (9) TMI 1327 - ITAT HYDERABAD] takes note of the hon'ble jurisdictional High Court decision in Vavveru Coop. Rural Bank [2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT] hold that both the Assessing Officers therein had not committed any error in not disallowing the assessees' section 80P(2)(d) deduction claims in issue qua the respective interest income derived form fixed deposit in nationalised banks. The PCITs' revision direction under challenge herein forming subject matter of these two appeals stand reversed on the very analogy therefore. We adopt the foregoing detailed discussion mutatis mutandis to hold that the Pr. CIT's revision direction therein under challenge are not sustainable in law. The same stand reversed in all the instant three cases therefore. - Decided in favour of assessee. Issues involved:1. Delay in filing appeals2. Correctness of the Pr. CIT's revision direction regarding section 80P(aa) deduction claimsAnalysis:1. Delay in filing appeals:The judgment addresses the delay in filing appeals by three assessees for A.Y 2015-16 due to a communication gap between the office, staff, auditor, and counsel. The delay of 315, 322, and 318 days was attributed to the circumstances surrounding the COVID-19 pandemic lockdown. The Tribunal considered the exclusion of limitations between 15.3.2020 to 2.10.2021 by the apex court's directions and thus condoned the delay in filing the appeals.2. Correctness of the Pr. CIT's revision direction:The substantive issue revolved around the Pr. CIT's revision direction regarding the correctness of the regular assessments for the three assessees, where section 80P(aa) deduction claims related to interest income from nationalized banks were accepted. The Pr. CIT deemed these deductions erroneous based on legal precedents and a CBDT Circular. The Tribunal analyzed the issue in light of a previous decision and a jurisdictional High Court ruling, concluding that cooperative societies are eligible for section 80P(2a) deduction concerning interest income from deposits in nationalized banks. The Tribunal found no error in the Assessing Officers' acceptance of the deduction claims and reversed the Pr. CIT's revision direction, citing the requirement for an assessment to be both erroneous and prejudicial to the revenue for revision proceedings to be initiated.The judgment ultimately allowed the appeals of the three assessees, reversing the Pr. CIT's revision directions in all three cases based on the legal analysis and findings provided in the detailed discussion.