PALMERA CO OP HOUSING SOCIETY LIMITED,N D ROAD MUMBAI V. CIRCLE 19(1), MUMBAI, PIRAMAL CHAMBER, MUMBAI

ITA 5790/MUM/2024

AI Insights

The case involves M/s. Palmera Co Op Housing Society Limited, which appealed against the order of the CIT(A) that dismissed their appeal in limine due to a significant delay of 2202 days. The primary issue was the disallowance of a deduction under section 80P(2)(d) amounting to Rs.7,26,628, which was initially disallowed by the CPC in an intimation dated 29.04.2015. The assessee's rectification application under section 154 was rejected, leading to the appeal before the CIT(A), which was also dismissed due to the delay. The Tribunal noted that similar delays in previous years were condoned and the deductions were allowed, thus following the same reasoning and allowing the current appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 33864 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Other Referred Cases: Vishva Villa Co-op Housing Society Ltd. vs. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVITHA KAUSHIK
• Assessee Lawyers: RAJESH SHAH; LD
• Keywords: Opportunity of being heard; Reasonable cause; Bonafide belief
• Section: 154; 143(1); 139(1); 80P

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “SMC”, MUMBAI BEFORE SMT. BEENA PILLAI, JUDICIAL MEMBER ITA No.5790/M/2024 Assessment Year: 2014-15 M/s. Palmera Co Op Housing Society Limited, Pleasant Place, Ground Floor, 16, N.D. Road, Mumbai Maharashtra-– 400 012 PAN: AAAAP1848E Vs. Income Tax Officer, Circle 19(1), Piramal Chamber, Mumbai Maharashtra–400 012 (Appellant) (Respondent) Present for: Assessee by : Shri Rajesh Shah, Ld. A.R. Revenue by : Ms. Kavitha Kaushik, Sr. D.R. Date of Hearing : 01.01.2025 Date of Pronouncement : 02/01/2025 O R D E R Per : Beena Pillai, Judicial Member: Present appeal filed by the assessee arises out of order dated 10.09.2024 passed by the NFAC, Delhi for A.Y. 2014-15 on following grounds of appeal: “1. On the facts and the circumstances of the case and in law, the learned the CIT (A) erred in not condoning delay in filing of an appeal. 2 On the facts and the circumstances of the case and in law, the learned CIT (A) erred in not admitting the appeal on account of delay in filing of an appeal. 3 The learned CIT(A) erred in not deciding the appeal on merits. The learned CIT(A) ought to have passed the order on merit and not deciding in limine. ITA No.5790/M/2024 M/s. Palmera Co Op Housing Society Limited 2 4 The learned CIT(A) erred in not allowing deduction u/s.80P(2)(d) of Rs.7,26,628. 5 The appellant craves leave to add, amend, modify, substitute and I or cancel any of the ground of the appeal.” Brief facts of the case are as under: 2. The assessee is a co-operative society registered under Maharashtra Cooperative Societies Act. For the year under consideration the assessee filed its return of income declaring total income of Rs.38,20,880/-, after claiming deduction under section 80P of the Act. The CPC while processing the return disallowed the deduction claimed by the assessee under section 80P of the Act amounting to Rs.7,26,628/- vide intimation dated 29.04.2015. 2.1. Against the said intimation the assessee filed rectification under section 154 of the Act, that was rejected vide order dated 24.02.2017. Aggrieved by the order of the CPC under section 154 of the Act, the assessee preferred appeal before the Ld. CIT(A). 3. Before the Ld. CIT(A) there was a delay of 2202 days. The Ld. CIT(A) did not condone the delay and dismissed the appeal in limine, vide impugned order. Aggrieved by the order of the Ld. CIT(A) the assessee is in appeal before this Tribunal. 4. The Ld. A.R. at the outset submitted that, when the appeal for assessment year under consideration was pending before the Ld. CIT(A), appeals for assessment year 2012-13 & 2013-14 were ITA No.5790/M/2024 M/s. Palmera Co Op Housing Society Limited 3 also filed with a delay of approximately 3685 days which was similarly not condoned by the Ld. CIT(A). He submitted that against order for A.Y. 2012-13 & 2013-14, the assessee preferred appeal before this Tribunal and this Tribunal vide consolidated order dated 30.08.2024 allowed the claim of the assessee u/s 80P(2)(d) by condoning the delay before the Ld. CIT(A). 4.1. He submitted that the facts in the present year is similar to the facts considered by this Tribunal for A.Y. 2012-13 & 2013-14 (supra) and the delay therein was also caused due to the bonafide belief that the intimation issued under section 143(1)(a) of the Act would be rectified in the application filed by the assessee under section 154 of the Act. 5. On merits of the case the Ld. A.R. submitted that, only issue alleged in this appeal is on disallowance denied under section 80P(2)(d) of the Act. The Ld. A.R. submitted that prima- facie adjustment under section 143(1)(a) of the Act to disallow the claim under section 80P of the Act cannot be made without granting an opportunity of being heard to the assessee. 5.1. He submitted that, it was vide Finance Act, 2021, w.e.f. A.Y. 2021-22 that any disallowance of claim under chapter VIA could be made, if the return was furnished beyond the due date as per section 139(1) of the Act. Ld. A.R. submitted that, in the present facts of the case, the assessment year under consideration is 2014-15 and therefore no disallowance could be made under chapter VIA, without granting an opportunity of being heard to the assessee. The Ld. A.R. relied on the decision of this co- ITA No.5790/M/2024 M/s. Palmera Co Op Housing Society Limited 4 ordinate Bench of the Tribunal in assessee’s own case for A.Y. 2012-13 & 2013-14 in ITA No.2900 & 2899/M/2024 vide order dated 30.08.2024 and in the case of Vishva Villa Co-op Housing Society Ltd. vs. ITO in ITA No.682, 683 & 684/M/2024 for A.Y. 2013-14, 2012-13 & 2014-15 vide order dated 27.06.2024. 5.2. On the contrary, the Ld. D.R. relied on the orders passed by the authorities below. I have perused the submissions advanced by both the sides in the light of the records placed before me. 6. No doubt there is a huge delay in filing the appeal before the Ld. CIT(A). However, as observed by this Tribunal in assessee’s own case in identical facts and circumstances for A.Y. 2012-13 & 2013-14 (supra) there is a reasonable cause due to bonafide belief that the disallowance made under intimation would be rectified under section 154 of the Act. This Tribunal while condoning the delay in assessee’s own case in identical facts and circumstances for A.Y. 2012-13 & 2013-14 (supra) placed reliance on the observation in the case of Vishva Villa Co-op Housing Society Ltd. vs. ITO (supra) as under: “6. We find that the facts of this case are similar as in the case of Vishva Villa Co-operative Housing Society Ltd. (supra). The relevant portion of the order is reproduced below: “7. We heard both the parties and also peruse the relevant material based on record. First of all the assessee has explained the reason for delat in filing of the first appeal before CIT(A) that earlier CA of the assessee had filed rectification application u/ 154 before the AO/CPC, then assessee was under bonafide belief that the adjustment would get rectified and even CA also did not advice the society to file an appeal when application was disposed of for certain period. It is later on when demand notice was issued then assessee was advised to file an appeal. Thus, ITA No.5790/M/2024 M/s. Palmera Co Op Housing Society Limited 5 looking to the fact that assessee is cooperative housing society and it was under a bonafide belief that it has filed a rectification which was not disposed of till date, therefore delay in filing of first appeal cannot be held to latches on part of the assessee. Thus, delay in filing appeal before the first appellate authority is condoned. 8. On merits in both the years, adjustment has been made by the CPC u/s. 143(1) treating the interest received from the Co- operative Bank as income from other sources by disallowing the claim of section 80P(2)(d). 9. First of all prior to assessment year 2021-22 there was no such provision for disallowing the claim of deduction within the scope of section 143(1)(a). Prima adjustment was permissible only with regard to claim of deduction u/s. 10AA, 80 IA, 801AB, 801B, 80IC, 801D or section 80-IE. It was from the Finance act 2021 with effect from A.Y. 2021-22, disallowance of claim of deduction under chapter VIA can be made, if the return has been furnished beyond the due date of return of income filed u/s. 139(1). Here in this case the CPC has treated the due date of return of income as on 31/08/2012 for A.Y. 2012-13 and 05/08/2013 for A.Y. 2014- 15, whereas the return has been filed by the assessee on 02/09/2012 and 20/09/2013 respectively. 10. Admittedly assessee is a Co-operative Housing Society registered under Maharashtra Society act 1960 and as per the said act of the Cooperative Housing Societies have to get their accounts audited ones there is requirement to furnish and audit before from Charted Accountant, and therefore the due date was 31/10/2012 and 31/10/2014 for the A.Y 2012- 23 and 2014 15 respectively and thus assessee had filed the return of income within the due date of under section 139(1). Thus even under amended provision no prima facie adjustment have been made no prima facie adjustment on account of deduction u/s.80P could have been made. In the early provision of adjustment u/s. 143(1)(a) no such disallowance could have been made. Accordingly, we hold that disallowance made by the CPC u/s. 143(1)(a) on the claim of deduction u/s. 80P is beyond the scope of adjustment u/s. 143(1) accordingly the adjustment is deleted.” 7. Respectfully following the orders of the co-ordinate benches, we hereby allow the appeal of the assessee. The AO is directed to delete the disallowance of claim of deduction u/s 80P(2)(d) of the Act.” 6.1. On merits also, this Tribunal in assessee’s own case allowed the claim u/s 80P(2)(d) as observed in the reproduction hereinabove. There is nothing contrary to the observations of ITA No.5790/M/2024 M/s. Palmera Co Op Housing Society Limited 6 this Tribunal in assessee’s own case (supra) as well as in case of Vishva Villa Co-op Housing Society Ltd. vs. ITO (supra) that has been brought on record by the Revenue in order to deviate from the view taken therein. 6.2. Respectfully following the orders of the co-ordinate Bench of the Tribunal, I direct the Ld. AO to delete the disallowance made under section 80P of the Act. Accordingly, the grounds raised by the assessee stand allowed. In the result, the appeal filed by the assessee stands allowed. Order pronounced in the open court on 02.01.2025. Sd/- (BEENA PILLAI) JUDICIAL MEMBER Mumbai, Dated: 02.01.2025. * Kishore, Sr. P.S. Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai. "