ESAF SWASRAYA MULTISTATE AGRO COOPERATIVE SOCIETY LTD,THRISSUR V. DCIT, CIRCLE 1(1) & TPS, THRISSUR

ITA 300/COCH/2025

AI Insights

The case involves ESAF Swasraya Multistate Agro Cooperative Society Ltd., the appellant, contesting an income tax assessment and subsequent penalty for the Assessment Year 2017-18. The appellant filed their return declaring a total income, which was later assessed at a higher amount by the AO, including an addition under Section 14A of the Income Tax Act. The appellant's delayed appeal to the CIT(A) was not condoned, leading to the current appeal before the ITAT. The tribunal considered the impact of the COVID-19 pandemic on the appellant's ability to file the appeal on time and referenced a Supreme Court decision to support their decision to set aside the CIT(A)'s order and direct a hearing on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711829 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2017-2018
• Other Referred Cases: Commissioner, Nagar Parishad Bhilwara vs. Labour Court, Bilwara and Another
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURESH SIVANANDAN
• Assessee Lawyers: PAUL RENJAN
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reasonable cause
• Section: 143(3); 14A

Judgement Text

"1 ITA No. 299 & 300/Coch/2025 ESAF Swasraya Multistate Agro Cooperative Society Ltd vs. DCIT IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SONJOY SARMA, JM ITA No.299 & 300/Coch/2025 Assessment Year: 2017-18 M/s. ESAF Swasraya Multi State Agro .......... Appellant Cooperative Society Ltd., JSR Square, Kalathod, Thrissur-680651, PAN: AAAAE4592Q vs. DCIT .......... Respondent Circle-1(1) & TPS, Thrissur. Appellant by: Shri Paul Renjan, CA Respondent by: Shri Suresh Sivanandan, CIT-DR Date of Hearing: 05.06.2025 Date of Pronouncement: 22.07.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Printed from counselvise.com 2 ITA No. 299 & 300/Coch/2025 ESAF Swasraya Multistate Agro Cooperative Society Ltd vs. DCIT Delhi (in short “CIT(A)”), dated 25/02/2025 for Assessment Year (AY) 2017- 18. 2. Briefly the facts of the case are that the appellant is a Multi State Cooperative Society self-help group. The appellant filed its Return of Income for the AY 2017-18 on 29/10/2017 declaring a total income of Rs. 12,97,03,653/-. Against the said return of income, the assessment was completed by the ACIT, Circle-2(1), Thrissur (hereinafter referred to as “AO”) vide order dated 17/12/2019 passed U/s. 143(3) of the Income Tax Act, 1961 (in short “the Act”) at a total income of Rs. 14,26,91,684/-. While doing so, the AO made an addition of Rs. 1,29,88,031/- U/s. 14A of the Act being 1% of the average value of the investments. 3. Being aggrieved, an appeal was filed before for the CIT(A) with a delay of 833 days. The CIT(A) had refused to condone the delay in the absence of any sufficient and reasonable cause for the delay and also proceeded to decide the appeal on merits. 4. Being aggrieved, the appellant is in appeal before us in the present appeal. 5. It is submitted that the appellant could not file the appeal against the assessment order within the prescribed time, and also because of the Printed from counselvise.com 3 ITA No. 299 & 300/Coch/2025 ESAF Swasraya Multistate Agro Cooperative Society Ltd vs. DCIT difficulties being faced by the Nation on account of COVID-19 Pandemic and the CIT(A) ought not to have refused to condone the delay. 6. We heard the rival submissions and perused the material available on record. The short issue that arises for our consideration is whether the CIT(A) was justified in refusing to condone the delay of 833 days in filing the appeal before the CIT(A)/NFAC. We find that the order passed by the AO was received by the appellant on 17/12/2019 and therefore, the appeal is required to be filed within 30 days from the date of receipt of the Appellate Order ie., on or before 16/01/2020 whereas the appellant filed the appeal before the CIT(A)/NFAC on 30/03/2022 and thus, there is a delay of 833 days. We find that the entire period of 833 days is covered by the COVID-19 Pandemic period and the Hon'ble Supreme Court taking cognizance of the difficulties faced by the citizens of the Nation had extended the limitations prescribed under various Statutes. In view of the order of the Hon'ble Supreme Court, it cannot be said that there is a delay in filing the appeal. Accordingly, in these circumstances, the CIT(A)/NFAC ought to have condoned the delay and adjudicate the appeal on merits and we will be failing in our duty if we fail to refer to the findings of CIT(A) on merits. The CIT(A)/NFAC having chosen to not to condone the delay, ought not to have adjudicated the issued in appeal on merits in view of the decision of the Hon'ble Supreme Court in the case of Commissioner, Nagar Parishad Bhilwara vs. Labour Court, Bilwara and Another reported in 2009 (3) SCC 525 has taken a view that while Printed from counselvise.com 4 ITA No. 299 & 300/Coch/2025 ESAF Swasraya Multistate Agro Cooperative Society Ltd vs. DCIT deciding an application for condonation of delay the High Court ought not to have gone into the merits of the case. It has been further held:- “5. While deciding an application for condonation of delay, it is well settled that the High Court ought to have gone into the merits of the case and would have only seen whether sufficient cause had been shown by the appellant for condoning the delay in filing the appeal before it. We ourselves have also examined the application filed under section 5 of the Limitation Act before the High Court and, in our opinion, the delay of 178 days has been properly explained by the appellant. That being the position, we set aside the impugned order of the High Court to its original file. The High Court is requested to decide the appeal on merits in accordance with law after giving hearing to the parties and after passing a reasoned order.” Therefore, we set-aside the order of the CIT(A)/NFAC and direct the CIT(A)/NFAC to dispose of the appeal on merits, as there was a sufficient and reasonable cause for delay, after affording a reasonable opportunity of being heard to the appellant. 7. In the result, appeal filed by the assessee stands partly allowed. 8. With respect ITA No. 300/Coch/2025 (AY 2017-18), which is filed by the assessee against the order of the NFAC, Delhi vide order dated 25/02/2025 for the AY 2017-18 confirming the levy of penalty levied U/s. 270A of the Act. Since the quantum appeal of the assessee for the AY 2017- 18 was restored back to the file of the CIT(A)/NFAC, we hereby restore this penalty appeal to the file of the CIT(A)/NFAC. Printed from counselvise.com 5 ITA No. 299 & 300/Coch/2025 ESAF Swasraya Multistate Agro Cooperative Society Ltd vs. DCIT 9. In the result, appeal filed by the assessee stands partly allowed. 10. Ex-consequenti, both the appeals filed by the assessee are partly allowed. Order pronounced in the open court on 22nd July, 2025. Sd/- Sd/- (SONJOY SARMA) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 22nd July, 2025 okk sps Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File Assistant Registrar ITAT, Cochin Printed from counselvise.com "