RMS Karamchari Sakh And Bachat Sahakari Samiti Limited Vs ITO (ITAT Jaipur)
Delay Cannot Defeat Justice: Jaipur ITAT Revives Section 80P Claims by Condoning 452-Day ; 59-Day Delays
Summary:
The assessee, RMS Karamchari Sakh & Bachat Sahakari Samiti Limited, was a co-operative society registered under the Rajasthan State Co-operative Societies Act, 1953. Its principal object was the welfare & socio-economic upliftment of railway employees & their families. The society was managed by retired employees of the Indian Railways.
For AY 2023-24, the assessee filed its return declaring gross total income of ₹15,03,683. After claiming deduction of the income u/s 80P, it declared nil taxable income. While processing the return u/s 143(1), the AO disallowed the deduction because the return had been filed beyond the due date prescribed u/s 139(1).
For AY 2024-25, a similar adjustment was made in respect of the assessee’s deduction of ₹10,97,530 u/s 80P. The deduction was again denied solely because of the delayed filing of the return.
The assessee challenged the intimations before the CIT(A). However, the appeals were delayed by 452 days for AY 2023-24 & 59 days for AY 2024-25. The CIT(A) declined to condone the delays & dismissed both appeals in limine, without examining the eligibility of the assessee’s claims u/s 80P on merits. The assessee accordingly approached the Jaipur Tribunal.
Issue before the Tribunal
The principal issue was whether the assessee had demonstrated “sufficient cause” for the delays in filing the appeals before the CIT(A) & whether the matters should be restored for fresh adjudication on merits.
Although the grounds of appeal also challenged the disallowances made u/s 80P, the Tribunal did not adjudicate the substantive eligibility for deduction. Its decision was confined to the condonation of delay & restoration of the appeals.
Assessee’s explanation for the 452-day delay
For AY 2023-24, the assessee explained that it had appointed Shri Narendra Goswami as its counsel & handed over the records to him. However, the counsel’s father was suffering from terminal cancer of the large intestine. Since the counsel was the primary caregiver, he could not attend to the assessee’s legal proceedings within the prescribed time. His father subsequently passed away on 11 November 2024.
The society further submitted that it was managed by retired railway employees engaged in welfare activities. Since all the relevant records were with the appointed counsel, the society could not immediately engage another professional to file the appeal.
The Tribunal accepted that the delay had occurred due to circumstances affecting the counsel, who had been formally engaged by the assessee after payment of professional fees. The explanation did not indicate deliberate inaction, negligence or an intention to abandon the appellate remedy. Applying a liberal interpretation to the expression “sufficient cause”, the Tribunal condoned the delay of 452 days.
Explanation for the 59-day delay
For AY 2024-25, the assessee stated that the delay arose from a bona fide misunderstanding of the appellate procedure. The persons managing the society believed that the Income-tax Department would issue a separate formal demand notice & that an appeal was required to be filed only after receiving such notice. They did not understand that the intimation issued u/s 143(1) itself constituted an appealable order.
The Tribunal took into consideration the background of the society. It was managed by retired railway employees for the welfare of railway employees & their families, who were not conversant with the technical intricacies of income-tax law. The Tribunal found the explanation bona fide & held that it constituted sufficient cause for condoning the delay of 59 days.
Tribunal’s findings & legal reasoning
The Tribunal observed that provisions governing condonation of delay should receive a liberal, pragmatic & justice-oriented interpretation. When an assessee provides a credible explanation & there is no indication of mala fide conduct, the matter should ordinarily be decided on merits instead of being terminated on a procedural ground.
The CIT(A) had dismissed both appeals solely because the delays were not condoned. Consequently, the assessee’s substantive challenge to the disallowances u/s 80P had never been examined. The Tribunal held that condoning the delays would provide the assessee a reasonable opportunity of being heard & would enable the controversy to be decided once & for all.
The Tribunal also considered that restoration would prevent multiplicity of proceedings. It therefore condoned both delays & remanded the appeals to the CIT(A) for fresh adjudication on merits after providing the assessee a reasonable opportunity of hearing. The appeals were accordingly allowed for statistical purposes.
Practical implications
The decision confirms that a substantial delay can be condoned where it results from the serious illness or personal emergency of the appointed counsel, provided the explanation is genuine & supported by surrounding circumstances. A taxpayer who has entrusted the matter to a professional should not necessarily be deprived of appellate relief because the professional was prevented from acting due to circumstances beyond his control.
The ruling also recognises that a bona fide procedural misunderstanding by persons unfamiliar with tax law may constitute sufficient cause, particularly where the taxpayer is a welfare-oriented society managed by non-professionals.
Importantly, the Tribunal has not allowed the deduction u/s 80P on merits. The CIT(A) must now determine whether delayed filing of the returns legally bars the deduction, including the effect of section 80AC.
The ruling ultimately reinforces that procedural limitation should advance orderly adjudication, but should not extinguish a genuine claim without examination on merits where sufficient cause for delay is established.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
Aforesaid interconnected appeals have been filed by the Appellant – RMS Karamchari Sakha and Bachat Sahakari Samiti Limited Jaipur ( hereinafter referred to as the “assessee”), sought to set aside the impugned orders both dated 30.01.2026 passed by the Additional/Joint commissioner of Income Tax (Appeals)-11, Mumbai [hereinafter referred to as the ‘CIT(A)’] qua the assessment order for Assessment year 2023-24 & 2024-25 on the grounds inter-alia that:-
ITA No.704/JPR/2026 (A.Y.2023-24)
“1. The impugned addition made in the intimation order u/s 143(1) dated 02.02.2024 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted.
2. The Id. CIT(A) erred in law and on facts in dismissing the appeal by refusing to condone the delay, despite a duly filed application for condonation, and without affording adequate opportunity of being heard or adjudicating the issues on merits. The impugned order, having been passed in violation of the principles of natural justice, deserves to be quashed, or alternatively, the matter be restored to the file of the ld. CIT(A) for fresh adjudication on merits after condoning the delay.
3. Rs.15,03,680/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the disallowance of deduction made by the AO of Rs.15,03,680/- u/s 80P solely on the ground of delayed filing of return u/s 139(1) despite the fact that the assessee is a Co-operative Society engaged in the activity of accepting deposits from its members only and redeploying the funds by way of advancing loans to the members and investing surplus funds. The disallowance so made and confirmed, is being totally contrary to the provisions of law and facts kindly be deleted in full.
4. The appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.
ITA No.705/JPR/2026 (A.Y.2024-25)
“1. The impugned addition made in the intimation order u/s 143(1) dated 28.02.2025 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted.
2. The Id. CIT(A) erred in law and on facts in dismissing the appeal by refusing to condone the delay, despite a duly filed application for condonation, and without affording adequate opportunity of being heard or adjudicating the issues on merits. The impugned order, having been passed in violation of the principles of natural justice, deserves to be quashed, or alternatively, the matter be restored to the file of the ld. CIT(A) for fresh adjudication on merits after condoning the delay.”
3. Rs.10,97,530/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the disallowance of deduction made by the AO of Rs.10,97,530/- u/s 80P solely on the ground of delayed filing of return u/s 139(1) despite the fact that the assessee is a Co-operative Society engaged in the activity of accepting deposits from its members only and redeploying the funds by way of advancing loans to the members and investing surplus funds. The disallowance so made and confirmed, is being totally contrary to the provisions of law and facts kindly be deleted in full.
4. The appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.”
2. Briefly stated, facts necessary for consideration and adjudication of the issues at hand are: the assessee is Cooperative Society registered under Rajasthan State Cooperative Societies Act, 1953 with the principal object of promoting the welfare and socio-economic upliftment of railway employees and their families being managed by retired employees of Indian Railway. The assessee society filed its return declaring gross total income of Rs. 15,03,683/- and after claiming deduction of the same u/s 80P shown its income as Nil. However Assessing Officer while processing return made disallowance thereof on the ground that assessee society has filed return after due date prescribed u/s 139(1).
3. Assessee carried the matter before the Ld. CIT(A) by way of filing appeals who has dismissed the same in limine by not condoning the delay of 452 days for filing the appeal for A.Y. 2023-24 and delay 59 days in filing the appeal for A.Y. 2024-25 before the Ld. CIT(A). Feeling aggrieved with the impugned orders passed by the Ld. CIT(A), assessee society has come up before the Tribunal by way of filing the present appeals.
4. We have heard Ld. ARs for the assessee and Ld. DR for the Revenue and perused the record available on file.
5. So far as question of not condoning the delay of 452 days in filing the appeal before the Ld. CIT(A) is concerned, we have perused in para 4.2 at page 4 and 5 of the impugned order, wherein application for condonation of delay filed by the assessee society is extracted. It is categorically pleaded in the application for condonation of delay that counsel engaged by the assessee society namely Shri Narendra Goswami could not render his services due to the terminal illness of his father who was suffering from cancer of the large intenstine and who has unfortunately passed away on 11.11.2024. Narender Goswani being primary caregivers could not handle legal matters in time. Since, the assessee society is being run by retired employees of India Railway who are engaged in promoting welfare and socio-economic upliftment of railway employees and their families could not the appeal by engaging any other counsel as the entire record was with Narendra Goswami. We are of the considered view that when the entire delay in filing the appeal is arbitrated to the counsel who was hired by paying fee and he was unable to render services due to terminal illness of his father, by giving liberal interpretation to the provisions for condonation of delay, we find “sufficient cause” to condone the delay in filing the appeal which will provide opportunity of being heard to the assessee society to get their appeal decide on merits once for all. This will also stop the multiplicity of the proceedings.
6. So far as the delay of 59 days in filing the appeal for A.Y. 2024-25 by the assessee society is concerned, the assessee has come up with application for condonation of delay therein that the delay is due to bonafide misunderstanding of the assessee society that they would receive formal demand notice from the department and thought that the appeal was not to be filed on the basis of intimation order u/s 143(1) of the Act but on receipt of formal demand notice.
7. We are of the considered view that since the assessee society is being run by retired employees of Indian Railway for welfare of their families and they were not conversant the intricacies of the income tax law, we find it a “sufficient cause” to condone the delay of 59 days by giving liberal interpretation to the provisions for condonation of delay. Moreover to stop multiplicity of the proceedings and to provide reasonable opportunity of being heard on merits the delay of 59 days is condoned and appeals are being heard on merit.
8. Bare perusal of the impugned orders passed by Ld. CIT(A) dismissing the appeals filed by the assessee society go to prove Ld. CIT(A) has dismissed the appeal in limine without touching the merits of the case merely on the ground that delay which have not been condoned. Now the delay has been condoned by the Bench by remanding the appeals back to Ld. CIT(A) to decide on merits after providing reasonable opportunity of being heard to the assessee society.
9. Resultantly, the appeals filed by the assessee society are accordingly allowed for statistical purposes.
Order pronounced in the open court on 25-08-2026
