Vividoddhesha Prathamik Grameen Krushi Sahakar Sangh Niyamit Vs ITO (ITAT Panaji)
Panaji ITAT Admits Jurisdictional Challenge to Section 148 Approval and Restores ₹15.76 Lakh Section 80P Claim
The assessee, a primary agricultural cooperative credit society, had not filed its original return under section 139. Based on information regarding cash deposits of ₹2.99 crore, reassessment proceedings were initiated by issuing notice under section 148 on 6 April 2022.
In response, the society filed a return declaring nil income after claiming deduction of ₹15,75,509 under section 80P(2)(a)(i). The AO denied the deduction by invoking section 80AC, holding that the return had not been filed within the prescribed time under section 139. The CIT(A) confirmed the disallowance.
Before the ITAT, the assessee raised an additional jurisdictional ground contending that the section 148 notice was issued after three years from the end of AY 2018-19. Therefore, approval under section 151(ii) ought to have been obtained from the Principal Chief Commissioner or Chief Commissioner, whereas sanction had been granted by the Principal Commissioner of Income Tax, Hubli.
The Tribunal held that this additional ground was purely legal and went to the root of the reassessment’s validity. It was therefore admitted, despite not having been raised before the CIT(A).
The ITAT also noted that the assessee had not properly participated before the CIT(A), allegedly because the hearing notices were not known to it. Accordingly, without expressing any opinion on the merits, the Tribunal restored the entire appeal to the CIT(A) for fresh adjudication, including:
- validity of the approval obtained under section 151;
- legality of the reassessment proceedings; and
- eligibility for the section 80P deduction despite section 80AC.
The CIT(A) was directed to grant a reasonable opportunity of hearing, while the assessee was required to cooperate and furnish all relevant evidence. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT PANAJI
This appeal filed by the assessee is directed against the order dated 17.11.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2018-19.
2. There is delay in filing of the present appeal. After going through the application for condonation of delay, we are satisfied with the reasons mentioned in the application for condonation of delay duly supported by an affidavit that the appellant was prevented by sufficient cause for not filing the appeal within the prescribed time limit. After hearing Ld. DR, we condone the delay and proceed to adjudicate the appeal.
3. The appellant has raised the following grounds of appeal:-
“1. The impugned order of the Appellate Commissioner of Income Tax is liable to set aside in so far as the same is incorrect, irregular, improper, unlawful and opposed to the law and facts of the case.
2. Because, the learned lower authorities failed to appreciate that the appellant is a primary agricultural co-operative credit society and is eligible for deduction u/s 80P of the Income Tax Act, 1961. The learned lower authorities denied to allow deduction u/s 80P as the return of income has not been filed by the appellant within the time limit prescribed u/s 139(1) of the Income Tax Act, 1961 and have invoked the provisions of section 80AC of the Income Tax Act, 1961.
3. Because, the learned Commissioner of Income Tax (Appeals) has overlooked the facts of the case and have dismissed the appeal as the appellant failed to make the written submission in support of the grounds of appeal.
4. Because, the learned Commissioner of Income Tax (Appeals) erred in confirming the interest levied by the lower authorities u/s 234A, 234B, 234C and Fees u/s 234F of the Income Tax Act, 1961 for default in furnishing return of income which is against law and facts of the case.
5. The appellant craves leave to add / alter any of the grounds of appeal before or at the time of hearing.”
4. The assessee has also raised the following additional ground of appeal:-
“Additional Ground No. 1: Whether, on the facts and in the circumstances of the case and in law, the assessment order passed under Section 147 read with Section 144B of the Income Tax Act, 1961 is void ab initio, illegal, and without jurisdiction, as the mandatory jurisdictional notice under Section 148 dated 06.04.2022 was issued beyond the period of three years from the end of the relevant Assessment Year 2018-19, and the prior sanction for such issuance was accorded by the Principal Commissioner of Income Tax, (PCIT) Hubli on 05.04.2022, instead of the Principal Chief Commissioner or Chief Commissioner of Income Tax, which is a clear violation of the statutory mandate prescribed under Section 151(ii) of the Income Tax Act, 1961.”
5. Facts of the case, in brief, are that the assessee is an Association of Persons (AOP) being Primary Grameen Krushi Sahakari Samitee Maryadit and has not filed its return of income u/s 139 of the IT Act for the period under consideration. On the basis of information available on insight portal that the assessee has deposited cash of Rs.2,99,86,066/- in its bank account maintained with Belgaum District Central Cooperative Bank Ltd., however, failed to furnish sources of above cash deposit by furnishing return of income, therefore, the case of the assessee was reopened u/s 147 of the IT Act and notice u/s 148 of the IT Act was issued to the assessee on 06.04.2022. The assessee furnished return in response to above notice by declaring income of Rs.Nil after claiming deduction of Rs.15,75,509/- u/s 80P(2) (a)(i) of the IT Act. Subsequently, notices u/s 142(1) and show cause notices u/s 144 of the IT Act respectively were issued to the assessee. After considering the reply and submissions of the assessee, the Assessing Officer vide order dated 20.03.2024 completed the assessment proceedings u/s 147 r.w.s. 144B of the IT Act by determining the total income of the assessee at Rs.15,75,509/- as against the income of Rs.Nil returned by the assessee in response to notice u/s 148 of the IT Act The above assessed income includes addition of Rs.15,75,509/- being disallowance of deduction u/s 80P(2) (a)(i) of the IT Act on account of section 80AC of the IT Act, since the original return of income was not furnished by the assessee within the prescribed time limit u/s 139 of the IT Act.
6. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the material available on record, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee and confirmed the disallowance made by the Assessing Officer.
7. It is the above order against which the assessee is in appeal before this Tribunal.
8. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that the assessee has filed an application under Rule 11 of the Income Tax Appellate Tribunal Rules, 1963 for admission of additional ground which is purely legal in nature. In this regard, the assessee also filed an affidavit stating that the omission to raise this additional ground before Ld. CIT(A)/NFAC as well as in original memo of appeal filed before this Tribunal was completely inadvertent, bona-fide and due to oversight at the time of initial drafting. After considering the application which is duly supported by an affidavit, we deem it appropriate to admit this additional ground, since it goes to the root of the matter.
9. In this regard, we find that the above legal ground was not considered by Ld. CIT(A)/NFAC since it could not be raised before him. Apart from above, we also find that the assessee has also raised ground no.3 wherein it has been claimed that the assessee has not furnished any explanation in support of grounds of appeal since notices of hearing were not known to the assessee and Ld. CIT(A)/NFAC on the basis of statement of facts, grounds of appeal and material available on record decided the appeal against the assessee.
10. Considering the totality of the facts of the case and in the interest of justice and without going into merits of the case and with the consent of both the parties, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and restore the matter back to the file of Ld. CIT(A)/NFAC with a direction to decide the appeal afresh and as per fact and law on all grounds including the additional ground raised by the assessee before us after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard and to produce relevant documents, submissions and evidences in support of its contentions without taking any adjournment under any pretext, otherwise Ld. CIT(A)/NFAC shall be at liberty to pass appropriate orders as per law. Thus, the grounds of appeal including additional ground raised by the assessee are allowed for statistical purposes.
11. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on this 18th day of August, 2026.
