2026 (2) TMI 766

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....n of income on 31st of March 2018 declaring a total income of Rs. 593,070 after claiming the deduction under section 80P(2)(a)(i) to the extent of Rs. 1,368,234/-. The return of income was picked up for scrutiny by issuance of notice under section 143 (2) on 13 August 2018 as well as notice under section 142 (1) on 17 June 2019. The only issue examined during the course of assessment proceedings was that whether the assessee is eligible for deduction under section 80P of the act and whether the interest income earned by the assessee on its own fund is taxable under the head income from other sources under section 56 or not. Further the assessee has earned a godowns rent of Rs. 90,302/- which is credited to the profit and loss account and whether the same is eligible for deduction as business income or is chargeable to tax under the head income from house property. 3. The learned assessing officer during the course of assessment proceedings found that there are 2684 regular members and 642 associate members of the society as on 31st of March 2017. Therefore, the concept of mutuality the basic requirement for deduction under section 80P is missing in this case. The learned assessi....

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....er of assessment under section 143 (3) of the income tax act. 6. On the same date the learned assessing officer passed an order under section 154 read with section 143 (3) of the income tax act on 15/11/2019 which is worded identically as the assessment order determining the total income of the assessee at Rs. 4,833,039. 7. The assessee preferred an appeal against the order passed under section 143 (3) of the act dated 15/11/2019 before the learned CIT - A on 23/12/2024. In form No. 35 the assessee submitted at serial No. 14 that there is a delay in filing of the appeal and at serial No. 15 the assessee submitted the reason for such delay. The reason for delay was stated that assessee has filed appeal against the order passed under section 154 read with section 143 (3) of the act dated 15/11/2019 before the learned CIT - A which is identically worded assessing the total income of the assessee at the same figure and therefore earlier it was thought that there is no need to file a duplicate appeal before the learned CIT - A and therefore no such appeal was filed. Later on, advice by the chartered accountant to the assessee that it is better to file an appeal against the assessm....

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....d u/s. 154 r.w.s. 143(3) of the Act. He submitted that Assessee is in Appeal before the Ld. CIT(A) against that order but as the Assessee has been advised that apparently, both the orders are same, the Assessee should have filed an Appeal under the original Assessment Order also because the scope of the provisions of section 143(3) and section 154 of the Act are different. He submits that when the Assessee is pursuing Appeals on the same ground, the delay should have been condoned, and Appeal should have been admitted by the Ld. CIT(A) and decided on the merits of the case. 10. With respect to the merits of the case, he submitted that Assessee is a co-operative society which is entitled to deduction u/s. 80P(2)(a)(i) of the Act which was denied to the Assessee. He submitted that the deduction under section 80P(2)(a)(i) of the act is directly decided by the honourable Karnataka High Court in favour of the assessee in the decision of Guttigedarara Credit Co-operative Society Ltd. vs. Income-tax Officer, Ward 2(2), Mysore [2015] 60 taxmann.com 215 (Karnataka)/[2015] 234 Taxman 476 (Karnataka)/[2015] 377 ITR 464 (Karnataka)[09-06-2015], Tumkur Merchants Souharda Credit Cooperative L....

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....the Act "will have lesser leverage in favor of the assessee than appeal filed "against order u/s 143(3) of the Act/". Thus, the appeal was filed. In condonation petition all these facts were stated but ld. CIT (A) did not condone the delay. We find that both are the alternative remedies of appeal preferred by the assessee, and there is nothing wrong if assessee had a bona fide belief that both the orders in substances are same, appeal against any of them would serve the purposes of the assessee. Bit out of abundant precaution later this appeal was filed, thus, we find that delay in foiling of appeal of 1835 days is for sufficient cause and deserves to be condoned. Thus, we hold that the ld. CIT (A) is not right in not condoning the delay in filing of the appeal. We reverse the orders of CIT (A) on this count. We allow ground No. 2 - 6 of the appeal. 13. Further as the issue of deduction under section 80P(2)(a)(i) is squarely covered in favour of the assessee by the decision of the honourable Karnataka High Court in case of He submitted that the deduction under section 80P(2)(a)(i) of the act is directly decided by the honourable Karnataka High Court in favour of the assessee in ....