The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has condoned delays of up to 884 days in three appeals filed by a cooperative society, ruling that delay should be viewed pragmatically not pedantically for condonation of delay in filing appeal.
Jagruti Nagri Sahakari Patsanstha (assessee) is a cooperative society engaged in providing credit facilities to its members. The assessee filed a return declaring Nil income for Assessment Year (A.Y.) 2020-21 after claiming a deduction of Rs. 36,85,250 under Section 80P of the Income Tax Act, 1961.
The case was selected for scrutiny due to high interest expenditure, huge advances, and high liabilities compared to low income. Due to non-compliance with statutory notices, the Assessing Officer (AO) completed the assessment ex-parte making additions totaling Rs. 90,33,320, including disallowance of the Section 80P deduction of the Income Tax Act.
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Additionally, the assessee filed return of income for A.Y. 2018-19 declaring Nil income after claiming a Section 80P deduction. The AO assessed the income at Rs. 1,14,24,540 due to non-compliance. Additionally, a penalty of Rs. 79,00,920 was levied under Section 270A for A.Y. 2018-19.
Aggrieved by these orders, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] with delays of 367 days, 884 days, and 599 days, respectively. The CIT(A) dismissed all appeals refusing to condone the delays.
Aggrieved by the CIT(A)’s order, the assessee filed an appeal before the ITAT. The assessee cited reasons for the delay, including the senior citizen secretary’s health issues, depression, and lack of familiarity with digital systems. The assessee argued that the delay was unintentional and that the CIT(A) failed to provide an opportunity to substantiate its case, denying justice.
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On the other hand, the revenue contended that the assessee did not comply with notices issued by the authorities.
The two-member bench, comprising Dr. Manish Borad (Accountant Member) and Vinay Bhamore (Judicial Member) relied on the Supreme Court’s judgment in Collector Land Acquisition vs. MST Katiji which highlights principles for condoning delay, including that delays should be approached pragmatically rather than pedantically.
The Tribunal observed that substantial justice should prevail over technical considerations and that there is no presumption of deliberate delay. The Tribunal condoned the delays, finding the reasons provided by the assessee, such as the secretary’s health and technological challenges, sufficient. The tribunal set aside the CIT(A)’s orders and remitted all three appeals to the CIT(A) for fresh adjudication. The appeals of the assessee were allowed for statistical purposes.
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