HUBLI SARAKU SAGANIKEDARARA SAHAKARI PATTINA SANGHA NIYMITA,HUBLI V. INCOME TAX OFFICER, WARD- 2(1), HUBLI, HUBLI

ITA 1043/BANG/2025

AI Insights

The case involves M/s. Hubli Saraku Saganikedarara Sahakari Pattina Sangha Niyamita, a cooperative credit society, which appealed against the order of the Ld.Addl/JCIT(A)-4, Mumbai, concerning the Assessment Year 2013-14. The primary contention was the disallowance of interest income from fixed deposits by the AO, which was upheld by the Ld.CIT(A). Subsequently, a penalty under section 271(1)(c) for furnishing inaccurate particulars was imposed, which the assessee contested. The Ld.CIT(A) dismissed the appeal due to the absence of the assessee at the hearing. The Tribunal found merit in the assessee's argument regarding the debatable nature of the interest income claim, referencing a Supreme Court decision in a similar case, and thus remitted the matter back to the Ld.CIT(A) for a thorough examination on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785246 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 05-05-2025
• Other Referred Cases: Mavilayi Service Co-operative Bank Ltd. v. CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BALUSAMY N
• Assessee Lawyers: KEERTHANA; SRINATH L; ADVOCATES
• Keywords: Set aside; Co-operative Credit Society
• Section: 271(1)(c)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH : BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 1043/Bang/2025 Assessment Year : 2013-14 M/s. Hubli Saraku Saganikedarara Sahakari Pattina Sangha Niyamita, No. 4-5, 3rd Floor, D Block, Shinde Complex, Neeligin Road, Hubballi – 580 029. PAN: AAAAH9467M Vs. The Income Tax Officer, Ward – 2(1), Hubli. APPELLANT RESPONDENT Assessee by : Ms. Keerthana M S & Shri Srinath L, Advocates Revenue by : Shri Balusamy N, JCIT-DR Date of Hearing : 15-10-2025 Date of Pronouncement : 27-10-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of the Ld.Addl/JCIT(A)-4, Mumbai dated 28/02/2025 in respect of the A.Y. 2013- 14. 2. The present appeal has been filed by the assessee with a delay of 5 days. In support of the said delay, an application has been filed. We have perused the said application and we are satisfied that there is sufficient Printed from counselvise.com Page 2 of 4 ITA No. 1043/Bang/2025 cause for not filing the appeal in time and therefore condoned the said delay in filing the appeal and proceeded to decide the appeal on merits. 3. The brief facts of the case are that the assessee is a co-operative credit society and claimed the interest as eligible for deduction u/s. 80P(2)(a)(i) of the Act. The AO disallowed the said interest on the ground that the same is earned from the fixed deposits maintained at the banks. Thereafter the assessee filed an appeal before the Ld.CIT(A) who had partly allowed the appeal and confirmed the disallowance of interest received from the fixed deposits from banks. Thereafter the assessing officer proposed to impose penalty u/s. 271(1)(c) of the Act on the ground that the assessee had furnished inaccurate particulars. The assessee objected the same but the AO had confirmed the penalty and as against the said penalty order, the assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) had dismissed the appeal on the ground that the assessee had not appeared before him. 4. As against the said order, the present appeal has been filed before this Tribunal. 5. At the time of hearing, the Ld.AR submitted that the reason for levying the penalty is not correct because, there was conflicting views given by the courts as well as the Tribunals and therefore the penalty could not be levied on the claim made by the assessee. The Ld.AR further submitted that the society had not received the hearing notices in its email and therefore they have not appeared before the Ld.CIT(A). On merits, the Ld.AR submitted that the interest claimed from the other co-operative societies and banks are highly debatable till the Hon’ble Supreme Court had decided the issue in the case of Mavilayi Service Co-operative Bank Ltd. v. CIT reported in 431 ITR 1 and therefore the claim made by the assessee could not be treated as furnishing inaccurate particulars and therefore the penalty could not be levied u/s. 271(1)(c) of the Act. 6. The Ld.DR relied on the orders of the lower authorities. Printed from counselvise.com Page 3 of 4 ITA No. 1043/Bang/2025 7. We have heard the arguments of both sides and perused the materials available on record. 8. The present appeal has been filed by the assessee against the ex-parte order passed by the Ld.CIT(A) and therefore the Ld.CIT(A) had no occasion to consider the issue on merits. Even though the submission made by the Ld.AR is an acceptable one, the merits of the issue could not be decided by us since the order of the Ld.CIT(A) is an ex-parte one and not on merits. 9. Considering the said facts and circumstances, we are inclined to set aside the order of the Ld.CIT(A) and remit this issue to the file of the Ld.CIT(A) for deciding the same on merits. We also direct the Ld.CIT(A) to consider the order of the Coordinate Bench of this Tribunal in assessee’s own case in ITA Nos. 1662 & 1663/Bang/2024 vide order dated 29/11/2024 for A.Ys. 2014-15 and 2015-16 wherein this Tribunal had considered the penalty issue which is more or less similar to the facts of the present case. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 27th October, 2025. Sd/- Sd/- (WASEEM AHMED) (SOUNDARARAJAN K.) Accountant Member Judicial Member Bangalore, Dated, the 27th October, 2025. /MS / Printed from counselvise.com Page 4 of 4 ITA No. 1043/Bang/2025 Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore Printed from counselvise.com "