THE CHILDRENS AID SOCIETY EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD,MUMBAI V. INCOME TAX OFFICER - 27(3)(1), MUMBAI, MUMBAI

ITA 249/MUM/2025

AI Insights

The case involves The Childrens AID Society Employees Co-operative Credit Society Ltd., which appealed against the order of the CIT(A) that disallowed a deduction claimed under section 80P(2)(d) of the Income Tax Act, 1961, for interest received from a co-operative bank. The primary legal issue was whether the interest income from a co-operative bank qualifies for deduction under section 80P(2)(d). The Tribunal considered the delay in filing the appeal, which was attributed to an error in the email address used for communication by the CIT(A). The Tribunal found the delay justifiable and proceeded to examine the merits of the case, ultimately deciding in favor of the assessee based on established legal precedents.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46900 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Other Referred Cases: PCIT Vs Annasaheb Patil Matadi Kamgar Sahakari Pathpedi (2023) 150 taxmann.com 173 (SC), Sai Ankur Co-operative Housing Society Limited vs. ITO (2025) 171 taxmann.co, 44 (Mumbai -Trib), PCIT Vs Totagars Co-operative sales Society (2017) 78 taxmann.com 169 (Karnataka)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIHAR RANJAN SAMAL
• Assessee Lawyers: KUMAR KALE
• Keywords: Condonation of delay; Principle of natural justice; Co-operative Credit Society
• Section: 250

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 249/MUM/2025 (AY : 2014-15 The Childrens AID Society Employees Co-operative Credit Society Ltd., Chembur Childrens Home. V.N. Purva Marg, Mankhurd, Mumbai – 400088 Maharashtra. PAN No. AACAT3065B ……………. Appellant Versus ITO – 27(3)(1), 422, 4th Floor, Tower No.6, Vashi Railway Station Complex, Vashi, Mumbai-400703 ……………. Respondent Assessee by : Shri Kumar Kale-CA/ AR Revenue by : Shri Nihar Ranjan Samal, Sr. DR Date of Hearing – 20/03/2025 Date of Order – 09/04/2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. The appeal by the assessee is directed against the order passed by the Addl/JCIT(A)-1, Chandigarh /National Faceless Appeal Centre/ CIT(A) dated 29.02.2024 passed under section 250 of the Income Tax Act, 1961 (“the Act”) for the assessment year (A.Y.) 2014-15. Though, the assessee has raised multiple grounds of appeal, however, in our view the substantial grounds of appeal relate to deduction under section 80P(2)(d) only. 2 ITA No. 249/Mum/2025 The Childrens AID Society Employee Co-operative Credit Society Ltd. 2. Rival submissions of both the parties have been heard and record perused. The learned authorised representative (ld AR) of the assessee submits that there is delay of 259 days in filing appeal before Tribunal. The ld CIT(A) passed the impugned order on 29.02.2024, however, this appeal was filed on 14.01.2025. the delay in filing appeal was not intentional or deliberate but due to the facts that impugned order was not communicated to the assessee on the e-mail provided on form -35 while filing appeal in 2016. The assessee provided the e- mail address as [e-mail] , but notices were sent at different e-mail that is [e-mail] . The assessee came to know about the dismissal of their first appeal on 11.01.2015, when tax consultant forwarded e- mail to the assessee. The assessee filed appeal immediately. The ld AR of the assessee submits that delay in filing of appeal may be condoned and the appeal may be heard on merit. 3. On merit, the learned ld. AR of the assessee submits that while filing return of income the assessee claimed deduction of Rs.14,38,514/- under section 80P(2)(d) of the Act on account of interest received from co-operative bank. The AO disallowed such deduction by taking view that against the decision of Bombay High Court in case of Quepam Urban Cooperative Society (120 DTR 152), which is in favour of assessee, is not accepted by the revenue has filed Special Leave Petition (SLP) before Hon’ble Suprema Court, which has been admitted for hearing. The ld AR of the assessee submits that the said SLP has been dismissed by Hon’ble Supreme Court. Further in a series of decision by Various High Courts and by this bench, it has been consistently held that co-operative banks are primarily a co-operative society and the interest received from such co- 3 ITA No. 249/Mum/2025 The Childrens AID Society Employee Co-operative Credit Society Ltd. operative bank are eligible for deduction under section 80P(2)(d) to support its submission. The ld. AR relied upon the decision of Hon’ble Apex Court in PCIT Vs Annasaheb Patil Matadi Kamgar Sahakari Pathpedi (2023) 150 taxmann.com 173 (SC), wherein it was held that credit co-operative society cannot be termed as cooperative Bank and that being credit society, it was entitled for exemption under section 80(P)(2). 4. On the other hand, learned senior departmental representative (Sr. DR) for the Revenue supported the order of lower authorities. The ld Sr DR for the revenue submits that there was inordinate delay in filing appeal before Tribunal. The assessee filed appeal belatedly. The assessee has not explained the delay in filing appeal before Tribunal in proper manner. The assessee is relying on self- serving story of not serving the order of ld CIT(A) on the e-mail address provided on form-35. Carful perusal of both the e-mail address clearly shows that both the e-mail address belongs to the same person. The ld Sr DR of the revenue submits that the assessee still not explained the cause of delay in filing appeal in time before ld CIT(A), therefore the delay may not be condoned and the order of ld CIT(A) may be confirmed. 5. We have considered the submissions of both the parties and have gone through the orders of lower authorities. We have also deliberated on various case laws relied upon by the learned AR of the assessee. First, we shall consider the plea of assessee for condonation of delay in filing appeal before this Tribunal. We find that main contention of the ld AR of the assessee is that they havd not received copy of order passed by ld CIT(A) and that the impugned order was not sent on the e-mail address provided on Form-35, however, no evidence to substantiate 4 ITA No. 249/Mum/2025 The Childrens AID Society Employee Co-operative Credit Society Ltd. such fact is filed before us. Though, the assessee has filed affidavit of Satish Suryabhan Bansode, the Chairman of the assessee-society. Therefore, taking a liberal view and keeping the fact in mind that when technical issues are kept against the cause of natural justice, the cause of substantial justice may be proffered. The assessee is not going to be benefitted by filing appeal belatedly. Hence, the delay of 259 days in filing appeal before Tribunal is condoned. 6. On merit, we find that grounds of appeal raised by the assessee is in fact covered by a series of decision by this Bench as well as other Co-ordinate Benches of Tribunal wherein it has been consistently held that Co-operative Banks are primarily co-operative society and the interest or dividend earned from such Co- operative Bank are eligible for deduction under section 80P(2)(d). similar view was taken by coordinate bench of This Tribunal in Sai Ankur Co-operative Housing Society Limited vs. ITO (2025) 171 taxmann.co, 44 (Mumbai -Trib) and Karnataka High Court in PCIT Vs Totagars Co-operative sales Society (2017) 78 taxmann.com 169 (Karnataka) No contrary facts or law is brought to our notice to take other view. Thus, the grounds of appeal raised by the assessee are allowed. 7. In the result, the grounds of appeal raised by the assessee are allowed. Order pronounced in the open Court on 09/04/2025. SS Sd/-/- GIRISH AGRAWAL ACCOUNTANT MEMBER Sd/-/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, DATED: 09/04/2025 Self by author 5 ITA No. 249/Mum/2025 The Childrens AID Society Employee Co-operative Credit Society Ltd. Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai "