High Court allows Co-operative Society appeal delay for 2005-06 assessment, emphasizes depositor impact. Costs awarded, remanded for further consideration.

The High Court condoned the delay in filing the appeal by a Co-operative Society under liquidation for the Assessment Year 2005-06, considering the impact on depositors. The appellant was directed to pay costs, and the matter was remanded for adjudication on merits. The appeal was disposed of with no order as to costs, and pending applications were to be closed.

---

---

Issues Involved:
The issues involved in the judgment include the delay in filing the appeal, assessment of income tax for the appellant for the Assessment Year 2005-06, disallowance of deductions under Non-Performing Asset (NPA) provision and Section 80P of the Income Tax Act, and the impact on depositors of the appellant bank.

Delay in Filing the Appeal:
The appellant, a Co-operative Society under liquidation, filed an appeal against the assessment order for the Assessment Year 2005-06 with a delay of 1529 days. The Tribunal dismissed the appeal due to the delay, stating that the reasons for delay were not relevant. The appellant contended that despite plausible reasons, the delay should have been condoned. The Bench considered the impact on depositors and decided to condone the delay, subject to the payment of costs.

Assessment of Income Tax:
The appellant, engaged in banking business, filed returns for the Assessment Year 2005-06 showing a loss. The assessment was reopened due to the cancellation of the banking license by RBI. The income was determined at a higher amount, disallowing deductions under NPA provision and Section 80P of the Act. Appeals were filed at various levels challenging the assessment, leading to the present appeal before the High Court.

Impact on Depositors:
The appellant bank, under liquidation, was being operated by the official liquidator. The delay in filing the appeal had implications on the depositors, as funds were being paid to them in a pro-rata basis. The Bench considered the plight of the depositors and decided to condone the delay to ensure that the appeal is adjudicated on its merits, without causing prejudice to the respondents.

Conclusion:
The High Court, after considering the circumstances and the impact on the depositors, decided to condone the delay in filing the appeal. The appellant was directed to pay costs and the matter was remanded back to the Respondent for adjudication on merits in an expeditious manner. The appeal was disposed of with no order as to costs, and pending miscellaneous applications were to be closed.

---