Bakhtawar Co-Operative Housing Society Ltd. Vs ITO (ITAT Mumbai)
13-Year Delay Condoned – Genuine 80P Claim Can’t Be Buried Under Technicalities” – Mumbai ITAT Gives Fresh Chance to Housing Society
In a relief-oriented ruling, the Mumbai ITAT condoned an extraordinary 13-year delay in filing appeal by a co-operative housing society and held that a legitimate claim for deduction u/s 80P(2)(d) deserves proper adjudication rather than rejection on technical grounds alone.
The dispute arose after CPC, Bengaluru while processing the return u/s 143(1), denied deduction of about ₹13.77 lakh u/s 80P(2)(d) claimed by Bakhtawar Co-operative Housing Society Ltd.. The society’s appeal before the CIT(A) was dismissed solely on limitation grounds since it was filed after more than 13 years.
Before the Tribunal, the society explained that the delay occurred due to multiple practical difficulties — reliance on a part-time accountant, belief that rectification would be carried out by the AO, incorrect professional advice against filing appeal, change in managing committees every three years, and disruptions caused during the Covid period.
The ITAT found merit in the explanation and observed that there was nothing to suggest any mala fide intention or deliberate negligence on part of the society. The Bench accepted that the delay had occurred due to circumstances genuinely beyond the control of the assessee.
Importantly, the Tribunal also noted that the assessee appeared otherwise entitled to deduction u/s 80P(2)(d), and denial of such claim merely through adjustment u/s 143(1) required proper examination.
Relying on several co-operative housing society decisions and following its earlier ruling in Torino Co-operative Housing Society Ltd., the ITAT condoned the delay and restored the matter back to the AO for fresh adjudication after factual verification.
The Tribunal emphasized that the assessee should be granted reasonable opportunity in the set-aside proceedings and directed the society to proactively cooperate during fresh adjudication.
Accordingly, the appeal was allowed for statistical purposes with directions for fresh examination of the 80P deduction claim.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal is preferred by the assessee, directed against the order of Commissioner of Income Tax Appeal, ADDL/JCIT (A), Thiruvanantpuram [in short, “the Ld. CIT(A)”] dated 10.02.2026 for the assessment year 2012-13, which in turn arises from assessment order u/s 143(1) of the Income Tax Act, 1961 (“the Act”) dated 27.02.2013, passed by CPC, Bengaluru (in short, “the Ld. AO”). The grounds of appeal raised by the assessee are as under:
1. On the facts and the circumstances of the case and in law, the learning AddI/JCIT (A) erred in dismissing the appeal on account of delay in filing of an appeal without condoning the delay though the appellant had reasonable cause for delay in filing of an appeal.
2. On the facts and the circumstances of the case and in law, the learning Addl/JCIT (A) erred in dismissing the appeal in limine without considering the merits of the case.
3. On the facts and the circumstances of the case and in law, the learning Addl/JCIT (A) erred in not considering the following Grounds of Appeal:
a) On the fact and circumstances of the case and in law C.P.C. Bangalore erred in disallowing deduction u/s 80P amounting to Rs. 13,77,502/- of the Income Tax Act 1961, CPC is also erred in considering due date of filing is 31/08/2012, however as accounts of all co-operative societies are subject to statutory audit provisions under respective governing laws, therefore due date for filing return of income under the Income-tax Act, 1961 is September 30 of every year.
b) On the fact and circumstances CPC erred in not allowing deduction u/s 80P amounting to Rs. 13,77,502/- of the Income Tax Act 1961.c
c) The CPC has erred in making addition of Rs.13,77,502/- by disallowing the claim of Provision of Sec 80P(2)(d). The CPC has assessed income of Rs.14,80,720/- as against the returned Income of Rs.1,03,210/-.
4. The appellant craves leave to add, amend, modify, substitute and/or cancel any of the ground of the appeal.”
2. The sole issue in the present appeal arises on account of denial of deduction under section 80P amounting to Rs. 13,77,502/- by the CPC vide intimation under section 143(1) of the Act dated 27.02.2013. The issue has been raised before the Ld. CIT(A) Appeals, who had dismissed the appeal of assessee treating the same barred by limitation being delayed by more than thirteen years in filing of the appeal. The assessee, being aggrieved with the decision of the Ld. CIT(A) Appeals, filed the present appeal before us.
