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

ITA 301/COCH/2025

AI Insights

The case involves ESAF Swasraya Multistate Agro Cooperative Society Ltd, which appealed against the assessment order and the penalty levied under Section 270A of the Income Tax Act for the Assessment Year 2020-21. The appellant had initially filed a return declaring a total income significantly lower than what was assessed by the NFAC, which included an addition under Section 14A. The appellant's delay in filing the appeal was attributed to pursuing an alternative remedy under Section 154, which was dismissed before the appeal was filed. The CIT(A) refused to condone the delay, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711831 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2020-2021
• 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); 154; 14A

Judgement Text

"1 ITA No. 301 & 302/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.301 & 302/Coch/2025 Assessment Year: 2020-21 M/s. ESAF Swasraya Multi State Agro .......... Appellant Cooperative Society Ltd., JSR Square, Kalathod, Thrissur-680651, Kerala. 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, Delhi (in short “CIT(A)”), dated 25/02/2025 for Assessment Year (AY) 2020- 21. Printed from counselvise.com 2 ITA No. 301 & 302/Coch/2025 ESAF Swasraya Multistate Agro Cooperative Society Ltd vs. DCIT 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 2020-21 on 28/12/2020 declaring a total income of Rs. 98,50,11,020/-. Against the said return of income, the assessment was completed by the National Faceless Assessment Centre, Delhi (hereinafter referred to as “Assessing Authority”) vide order dated 22/09/2022 passed U/s. 143(3) r.w.s 144B of the Income Tax Act, 1961 (in short “the Act”) at a total income of Rs. 1,03,34,30,486/-. While doing so, the AO made an addition of Rs. 4,04,92,524/- U/s. 14A of the Act. 3. Being aggrieved, an appeal was filed before for the CIT(A) with a delay of 182 days. The appellant also filed a petition seeking condonation of delay on the ground that the delay had occurred as the appellant was pursuing the alternative remedy prescribed U/s. 154 of the Act against the assessment order and since, the petition U/s. 154 was disposed of on 22/02/2023 dismissing the petition. The appeal was filed within 30 days from the date of receipt of order passed U/s.154 of the Act on 22/03/2023. Thus, it is submitted that the appellant was beneficially pursuing the alternative remedy and therefore, it is prevented by a reasonable and sufficient cause in filing the appeal before the CIT(A)/NFAC. However, the CIT(A)/NFAC has refused to condone the delay and proceeded to decide the appeal on merits. 4. Being aggrieved, the appellant is in appeal before us in the present appeal. Printed from counselvise.com 3 ITA No. 301 & 302/Coch/2025 ESAF Swasraya Multistate Agro Cooperative Society Ltd vs. DCIT 5. 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 in filing the appeal before the CIT(A)/NFAC. We had carefully perused the explanation offered by the appellant before the CIT(A)/NFAC. The substance of the explanation is that the delay had occurred on account of pursing the alternative remedy prescribed U/s. 154 of the Act which in our considered opinion constitutes a reasonable cause for delay and therefore, the CIT(A) ought to have condoned the delay of 182 days and adjudicated the appeal on merits. We will be failing our duty if we do not give a finding as to the correctness of the approach adopted by the CIT(A)/NFAC. Having chosen to not to condone the delay, the CIT(A) ought not to have entered into on the merits of the issues in the appeal 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 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.” Printed from counselvise.com 4 ITA No. 301 & 302/Coch/2025 ESAF Swasraya Multistate Agro Cooperative Society Ltd vs. DCIT Therefore, we are of the considered opinion that the matter requires to remand to the file of the CIT(A)/NFAC for de novo disposal of the appeal in accordance with law after affording a reasonable opportunity of being heard to the assessee. 6. In the result, appeal of the assessee stands partly allowed. 7. With respect ITA No. 302/Coch/2025 (AY 2020-21), which is filed by the assessee against the order of the NFAC, Delhi vide order dated 25/02/2025 for the AY 2020-21 confirming the levy of penalty levied U/s. 270A of the Act. Since the quantum appeal of the assessee for the AY 2020- 21 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. 8. In the result, appeal filed by the assessee stands partly allowed. 9. 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 Printed from counselvise.com 5 ITA No. 301 & 302/Coch/2025 ESAF Swasraya Multistate Agro Cooperative Society Ltd vs. DCIT 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 "