BHUVANESHWARI CO OP CREDIT SOCIETY LTD, AMINGAD,BAGALKOT V. INCOME TAX OFFICER, WARD-1 & TPS, BAGALKOT

ITA 3127/BANG/2025

AI Insights

The case involves the Bhuvaneshwari Co-op. Credit Society Ltd., which appealed against the orders of the CIT(A)/NFAC for the assessment years 2018-19 and 2019-20. The primary contention was the incorrect allotment and subsequent handling of two PANs (Permanent Account Numbers) by the Income Tax Department, which affected the society's ability to file tax returns under the correct status of 'Association of Persons' (AOP). The ITAT found that the AO had not adequately considered the society's submissions and the complexities arising from the incorrect PAN allotment. Consequently, the case was remanded for a thorough re-examination.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 847231 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Bangalore
• Assessment Year: 2018-2019
• Appeal Filed On: 29-12-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GANESH R GHALE
• Assessee Lawyers: VEERANNA M MURGOD
• Keywords: Condonation of delay; Opportunity of being heard
• Section: 147; 148

Judgement Text

"ITA Nos.3127 & 3128/Bang/2025 Bhuvaneshwari Co-Op. Credit Society Ltd., Bagalkot IN THE INCOME TAX APPELLATE TRIBUNAL “SMC’’ BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA Nos. 3127 & 3128/Bang/2025 Assessment Year: 2018-19 & 2019-20 Bhuvaneshwari Co-op. Credit Society Ltd. Amingad Tq. Hunagund, Dist. Bagalkot 587112 Karnataka PAN NO : ADCFS2692B Vs. ITO Ward 1 & TPS Bagalkot APPELLANT RESPONDENT Appellant by : Sri Veeranna M Murgod, A.R. Respondent by : Sri Ganesh R Ghale, D.R. Date of Hearing : 26.02.2026 Date of Pronouncement : 23.03.2026 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: These two appeals at the instance of the assessee is directed against the orders of the ld.CIT(A)/NFAC dated 22/08/2025 vide DIN and Order No: ITBA/NFAC/S/250/2025-26/1079888099(1) for the AY 2018-19 and dated 26/08/2025 vide DIN and Order No: ITBA/NFAC/S/250/2025-26/1080023130(1) for the AY 2019-20 passed u/s. 250 of the Income Tax Act, 1961 (in short “the Act”). Since issue involved in both these appeals are common, these are clubbed together, heard together and disposed of by this common order for the sake of convenience and brevity. 2. The assessee has raised the following grounds of appeal in ITA No: 3127/BANG/2025 for the AY 2018-19- Printed from counselvise.com ITA Nos.3127 & 3128/Bang/2025 Bhuvaneshwari Co-Op. Credit Society Ltd., Bagalkot Page 2 of 11 1. The learned Commissioner of Income Tax (Appeals) order is opposed to the Facts of the case and law. 2. Because, the learned Commissioner of Income Tax (Appeals) have denied to consider the appeal on merits and failed to provide sufficient opportunity to the appellant to present the arguments in this regards, wherein the appellant has mentioned that the appellant has been allotted with another PAN with AOP status against which the appellant has filed the return of income. 3. Because, the learned lower authorities have also not provide sufficient opportunity and failed to appreciate that the appellant was been allotted another PAN with AOP Status, against which the appellant has duly filed the return of income for the relevant Assessment Year. 4. The appellant craves leave to add/ alter any of the grounds of appeal before or at the time of hearing. 3. The assessee has raised the following grounds of appeal in ITA No: 3128/BANG/2025 for the AY 2019-20: - 1. The learned Commissioner of Income Tax (Appeals) order is opposed to the Facts of the case and law. 2. Because, the learned Commissioner of Income Tax (Appeals) have denied to consider the appeal on merits and failed to provide sufficient opportunity to the appellant to present the arguments in this regard, wherein the appellant has mentioned that the appellant has been allotted with another PAN with AOP Status against which the appellant has filed the return of income. 3. Because, the learned lower authorities have also not provide sufficient opportunity and failed to appreciate that the appellant was been allotted another PAN with AOP Status, against which the appellant has duly filed the return of income for the relevant Assessment Year. 4. The appellant craves leave to add/ alter any of the grounds of appeal before or at the time of hearing. 4. Before us, at the outset the ld. A.R of the assessee vehemently submitted that there is a delay of 59 days in filing both these appeal before this Tribunal and also drew our attention on the application for condonation of delay along with an affidavit dated 23/12/2025 Printed from counselvise.com ITA Nos.3127 & 3128/Bang/2025 Bhuvaneshwari Co-Op. Credit Society Ltd., Bagalkot Page 3 of 11 filed by the assessee stating the reason for the delay, which are reproduced below:- Printed from counselvise.com ITA Nos.3127 & 3128/Bang/2025 Bhuvaneshwari Co-Op. Credit Society Ltd., Bagalkot Page 4 of 11 Printed from counselvise.com ITA Nos.3127 & 3128/Bang/2025 Bhuvaneshwari Co-Op. Credit Society Ltd., Bagalkot Page 5 of 11 Printed from counselvise.com ITA Nos.3127 & 3128/Bang/2025 Bhuvaneshwari Co-Op. Credit Society Ltd., Bagalkot Page 6 of 11 4.1 On going through the said application as well as the affidavits filed by the assessee for both these years, we take note of the fact that delay caused in filing was due to the fact that the assessee society was busy with completion of audit for FY 2024-25 conveying the AGM. Thereafter, understating the reason for dismissal by ld. CIT(A)/NFAC, the management further delayed to decide whether the matters need to be challenged before the ITAT and once convinced the management approached the counsel in this regard to file an appeal which resulted in a delay of 59 days in both these appeals. 4.2 Having perused the record and heard the ld. Counsel for the assessee as well as the ld. D.R., it is perceived that the explanation offered in the condonation applications as well as in affidavits are plausible and sufficient cause been shown by the assessee which prevented them from filing the appeal within the prescribed period and accordingly we inclined to condone the delay of 59 days in both these appeals and admit the appeals for adjudication on merits. 5. Brief facts of the case are that the assessee is a co-operative society registered under the Karnataka Co-operative Societies Act, 1959 and is engaged in the activities of accepting deposits and providing credit facilities to its members. The assessee when applied for the PAN initially, it was inadvertently issued with the Status of “Partnership Firm” bearing PAN: ADCFS2692B. The same was updated with the assessee’s bank account as part of bank’s KYC compliance. The assessee later on realized that the PAN so allotted in the Status of “Partnership Firm” is incorrect and accordingly discontinued the same and applied for correction in PAN and got a new PAN bearing no: ABSAS3923L. The bankers of the assessee were also requested to update PAN details however; the bank authorities were not able to discontinue the earlier PAN and hence Printed from counselvise.com ITA Nos.3127 & 3128/Bang/2025 Bhuvaneshwari Co-Op. Credit Society Ltd., Bagalkot Page 7 of 11 both the PAN were continued in bank accounts until the assessee realized the mistake and asked them to withdraw the earlier PAN. 5.1 The assessee also surrendered the earlier PAN on 10/04/2023 along with the affidavit before the ld. ITO, Ward-1, Bagalkot however, the same has not been cancelled yet. A fraud had been detected in the assessee society and hence the books of accounts could not be finalized and as such, the statutory auditor had not issued statutory audit report for the AY 2018-19 & 2019-20 and hence the assessee society could not file its return of income as an AOP under the new PAN allotted for these two assessment years. 5.2 Thereafter, notice u/s. 148 of the Act was issued and accordingly, the assessee filed its return of income for AY 2018-19 on 19/12/2023 and for the AY 2019-20 on 20/12/2023 and claimed deduction u/s. 80P(2)(a)(i) of the Act. The claim of the assessee that the assessee had accounted all those deposits and withdrawals of cash that have been claimed by the AO in the assessment order passed u/s. 147 of the Act. The AO however concluded the assessment proceedings for the AY 2018-19 by disallowing the entire claim of deduction u/s. 80P(2)(a)(i) of the Act amounting to Rs.4,49,768/- and by disallowing the claim of deduction u/s. 80P(2)(a)(i) of the Act amounting to Rs.9,10,389/- for the AY 2019- 20 as the assessee had not file the original return of income u/s. 139(1) of the Act. The AO contended that the assessee had not filed the original return of income u/s. 139(1) of the Act and the provisions of section 80AC of the Act make it amply clear that the deduction under part-C of chapter-VIA would be admissible only if the return of income is filed within the prescribed due date. 6. Aggrieved by the assessment completed u/s. 147 of the Act, the assessee preferred an appeal before the ld. CIT(A)/NFAC. Printed from counselvise.com ITA Nos.3127 & 3128/Bang/2025 Bhuvaneshwari Co-Op. Credit Society Ltd., Bagalkot Page 8 of 11 7. The ld. CIT(A)/NFAC dismissed both these appeals on the ground that during the course of appellate proceedings neither the assessee nor the A.R. of the assessee filed any written submissions or made any compliances despite getting several opportunities. The ld. CIT(A)/NFAC observed that the assessee had only sought adjournment and not bothered to file submission and relevant documents in respect of the grounds of appeal and statements of facts. 8. Again aggrieved by the order of ld. CIT(A)/NFAC, the assessee has filed the present appeals before this Tribunal. 9. Before us, the ld. A.R. of the assessee vehemently submitted that the assessment order was passed under the PAN: ADCFS2692B under the Status “Partnership Firm” which was surrendered by the assessee society on 10/04/2023 before the ITO,Ward-1, Bagalkot. The ld. A.R. of the assessee vehemently submitted that the assessee society had been allotted new PAN bearing No: ABSAS3923L under the status of AOP society and accordingly contended that the assessee society had duly filed the return of income. Lastly, the ld. A.R. submitted that because the ld. Lower authority had not provided sufficient opportunities to the assessee society, the case may be remanded back to the file of AO for the de-novo consideration. 10. The ld. D.R. on the other hand vehemently submitted that the assessee is very callous in its approach before both the authorities below and also filed the appeal before this Tribunal belatedly by 59 days and therefore, the appeals may be dismissed in limine. Further, the ld. D.R. submitted that if the bench is considering to remand the matter back to the file of AO, then it may be with cost. Printed from counselvise.com ITA Nos.3127 & 3128/Bang/2025 Bhuvaneshwari Co-Op. Credit Society Ltd., Bagalkot Page 9 of 11 11. We have heard the rival submission and perused the material available on record. The claim of the assessee is that initially the PAN was inadvertently issued with the status of “Partnership Firm” bearing PAN: ADCFS2692B. The assessee later realized that the PAN so allotted is under wrong status and accordingly applied for correction in PAN and got a new PAN bearing No: ABSAS3923L. We could not understand when the assessee applied for the correction of PAN, then how they got new PAN especially when the application for New PAN & application for correction of PAN are completely different. Therefore, we are of the considered opinion that these facts need to be examined by the AO & if the AO found that the assessee had applied for another new PAN then the AO may take actions as per law. Further, before us, the assessee claimed to have surrendered the earlier PAN on 10/04/2023 along with the affidavit before the AO, Ward-1, Bagalkot however, the same has not been cancelled yet. This fact may also be look into by the AO. We also take note of the fact that the bankers of the assessee although requested to update the new PAN details however, the bank authorities were not able to discontinue the old PAN and hence both the PAN were continued in the bank accounts until the assessee society realized the mistake and asked the bankers to withdraw the old PAN. We are of the considered opinion that because of this, the data were available with the income tax department with the old PAN that the assessee although made huge cash deposits however is a non-filer of income tax return. The claim of the assessee is that after the assessee had been allotted new PAN with the Status of AOP, the assessee in fact filed the return of income which is not considered by the AO. On going through the assessment order, we observed that all these facts were not examined by the AO and the AO had disallowed the claim of the assessee u/s. 80P(2)(a)(i) of the Act on the ground that assessee had not filed the original return of income u/s. 139(1) of the Act. The ld. A.R. of the Printed from counselvise.com ITA Nos.3127 & 3128/Bang/2025 Bhuvaneshwari Co-Op. Credit Society Ltd., Bagalkot Page 10 of 11 assessee before us contended that a fraud had been detected in the assessee society and hence the books of accounts could not reached finality and as such, the auditor could not issue statutory audit report for the AY 2018-19 & 2019-20 within the prescribed period. This being so, in the interest and justice and fair play and as requested by ld. A.R. of the assessee, we deemed it fit and proper to remit the entire issue in dispute to the file of AO for de-novo consideration in accordance with law. Needless to say, reasonable opportunity of being heard must be granted to the assessee. 11.1 While remitting the matter to the file of AO, we also considered necessary to impose a token cost of Rs.2,500/- for each assessment year totaling Rs.5,000/- to the assessee in aggregate owing to negligence shown to the statutory notices before the authorities below. The assessee shall deposit the cost warranted in favour of Prime Minister Relief Fund and the receipt thereof shall be furnished before the AO. With these terms the appeal of the assessee is restored to the file of AO for de-novo adjudication in accordance with law. We clarify that incase of further default, the assessee shall not be entitle for any leniency. It is ordered accordingly 12. In the result, the appeals filed by the assessee for both these assessment years are partly allowed for statistical purposes. Order pronounced in the open court on 23rd Mar, 2026 Sd/- (Waseem Ahmed) Accountant Member Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 23rd Mar, 2026. VG/SPS Printed from counselvise.com ITA Nos.3127 & 3128/Bang/2025 Bhuvaneshwari Co-Op. Credit Society Ltd., Bagalkot Page 11 of 11 Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. Printed from counselvise.com "