U.P. Cooperative Federation Ltd. Vs ITO-2(3) (ITAT Lucknow)
No Limitation Bar Where Special Audit Directions Exist: Lucknow ITAT Dismisses Appeal of U.P. Cooperative Federation; s.153(3)(ii) Overrides s.153(2A)
Lucknow ITAT (Bench “B”) in U.P. Cooperative Federation Ltd. vs. ITO-2(3), Lucknow (ITA No.260/LKW/2023, AY 2003-04, order dated 19.12.2025) dismissed the assessee’s appeal and upheld the assessment framed on 25.08.2014.
The Tribunal rejected the assessee’s primary plea that the assessment was time-barred u/s 153(2A) and accepted Revenue’s stand that the case was covered by Section 153(3)(ii), since the assessment was made to give effect to findings/directions of ITAT and the Hon’ble High Court relating to special audit u/s 142(2A). It was noted that the validity of special audit, exclusion of limitation period and related issues had already attained finality against the assessee up to the Supreme Court, and the assessee itself had prolonged proceedings by repeatedly challenging the audit and not cooperating with the auditor.
On merits, the Tribunal also upheld disallowance / restriction of deduction u/s 80P, observing that the assessee failed to produce audited accounts and supporting evidences, despite repeated opportunities and binding directions. The plea that additions were “tax-neutral” due to 80P deduction was rejected. The conduct of the assessee in avoiding special audit and non-production of books was heavily relied upon to sustain the assessment.
Accordingly, the Tribunal found no infirmity in the order of CIT(A) and dismissed all grounds raised by the assessee
FULL TEXT OF THE ORDER OF ITAT LUCKNOW
