Madurai Electricity System PSCS Vs ITO (ITAT Chennai)
In Madurai Electricity System PSCS Vs ITO, the Chennai Bench of the ITAT considered whether deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961 could be denied solely due to non-submission of supporting documents. The assessee, a cooperative credit society engaged in providing credit facilities to its members, filed its return for AY 2022–23 declaring nil income after claiming deduction of ₹2.03 crore.
During scrutiny, the Assessing Officer disallowed the deduction on the ground that the assessee failed to furnish documentary evidence to establish that the interest income was derived from providing credit facilities to its members. The Commissioner (Appeals) upheld the disallowance on the same basis.
Before the Tribunal, the assessee explained that due to lack of professional assistance, it could not present necessary documents before the lower authorities and requested another opportunity to substantiate its claim. The Tribunal observed that the sole reason for denial of deduction was absence of supporting evidence and not examination of the merits of the claim. Considering the circumstances, the Tribunal condoned a delay of 12 days in filing the appeal and held that the assessee should be granted another opportunity to present relevant details.
