ITAT Condones 2202-Day Delay in Appeal Filing, due to Bona Fide Belief in Rectification u/s 154 [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) condoned a 2202-day delay in filing the appeal, as there was a bona fide belief on the part of the assessee that the disallowance made under intimation would be rectified under section 154 of the Income Tax Act, 1961.

The assessee had appealed against the order passed by the Commissioner of Income Tax Appeals [CIT(A)] for the assessment year (AY) 2014-15.

In this case, the assessee is a cooperative society registered under the Maharashtra Cooperative Societies Act. For the AY 2014-15, the assessee filed its Income Tax Returns (ITR) and declared a total income of Rs. 38.20 lakhs.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

The assessing officer (AO) disallowed the deduction claimed by the assessee under section 80P of the Act amounting to Rs.7,26,628. Although the assessee filed a rectification under Section 154 of the Income Tax Act, 1961, it was rejected.

Read More: ITAT Condones Delay, Remands matter to CIT(A) for Fresh Adjudication for Fair Hearing [Read Order]

It is to be noted that there was a delay of 2202 days in filing the appeal before the CIT(A). The  CIT(A) did not condone the delay and dismissed the appeal filed by the assessee. Aggrieved by the above decision, the assessee appealed for relief before the ITAT.

The assessee’s counsel submitted that during the appeal for the relevant assessment year, similar appeals for A.Y. 2012-13 & 2013-14 were filed with a delay of 3685 days, which was not condoned by the CIT(A), and that the tribunal later condoned the delay and allowed the assessee's claim under Section 80P(2)(d) of the Income Tax Act in a consolidated order dated 30.08.2024. The counsel contended that the present case has similar facts, with the delay caused by the bona fide belief that the intimation under section 143(1)(a) would be rectified under section 154 of the Income Tax Act.

Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

The ITAT, by relying on the decision of the Mumbai ITAT in the assessee's own case with identical facts for AY 2012-13 & 2013-14, noted that there was a reasonable cause due to a bona fide belief that the disallowance made under intimation would be rectified under section 154 of the Act.

Read more: Assessee’s Limited Familiarity with E-portal System: ITAT Condones 611 Day Delay

The bench also relied on the decision of the ITAT in the case of Vishva Villa Co-op Housing Society Ltd. vs. ITO in ITA No.682, 683 & 684/M/2024, in which the co-ordinate bench of the tribunal held that “the assessee is cooperative housing society and it was under a bonafide belief that it had filed a rectification, which was not disposed of till date, therefore delay in filing of first appeal cannot be held to be laches on the part of the assessee. Thus, delay in filing appeal before the first appellate authority is condoned. “

In conclusion, the ITAT, comprising Beena Pillai (Judicial Member), allowed the appeal filed by the assessee and condoned the delay of 2202 days in filing the appeal before the CIT(A).

To Read the full text of the Order CLICK HERE

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