Case Law Details
The Tungabhadra Credit Co-operative Society Vs ITO (ITAT Bangalore)
ITAT Bangalore directed AO that claim in respect of interest on fixed deposits if any is not allowed u/s. 80P(2)(d) of the Income Tax Act has to be considered in accordance with law by allowing the expenditure u/s. 57 of the Income Tax Act.
Facts- Claim of the assessee regarding deduction u/s. 80P(2)(a)(i) of the Income Tax Act was dismissed by the AO relying on the decision of Hon’ble Supreme Court in the case of Citizen Co-operative Society Ltd. vs. ACIT.
Conclusion- Held that in the first round of litigation, this Tribunal did not have the benefit of the above referred decisions by Hon’ble Supreme Court as it has been passed after this Tribunal pronounced the order. In the interest of justice, we once again remit these issues to the Ld.AO to consider the claim of assessee in accordance with the decisions of Hon’ble Supreme Court in case of Mavilayi Service Co- operative Bank Ltd. v. CIT (supra) and Kerala State Co-operative Agricultural and Rural Development Bank Ltd. vs. AO (supra). We also direct the Ld.AO to consider the decisions of this Tribunal wherein the claim in respect of interest on fixed deposits if any is not allowed u/s. 80P(2)(d) has to be considered in accordance with law by allowing the expenditure u/s. 57.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
Present appeals arises out of order passed by the NFAC, Delhi vide order dated 24.01.2024 for A.Y. 2013-14 and 02.02.2024 for A.Ys. 2014-15 & 2017-18.
2. At the outset, the Ld.AR submitted that, there is delay of 88 days in filing the appeal for A.Y. 2013-14 and delay of 79 days in filing the appeal for A.Ys. 2014-15 & 2017-18 before this Tribunal. The assessee has furnished affidavit in support of the delay explaining the reasons which is scanned and reproduced as under:
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2.1. It is submitted by the assessee that the reason causing delay in filing appeals before this Tribunal was because the authorized representative was not following up with the proceedings in respect of all the notices and the impugned order were sent by the office of Ld.CIT(A). It is submitted that the assessee was not aware about the same.
2.2. It is submitted that, upon the Auditor being changed by the assessee, the ex-parte order passed by the Ld.CIT(A) was informed to the assessee for all the three years.
2.3. The Ld.AR submitted that immediately the assessee approached the present AR and an appeal was filed before this Tribunal. He prayed that the assessee was under a bonafide belief that, the notices forwarded by assessee to the then tax consultant was being taken cognizance of by the erstwhile tax consultant. He thus prayed for the delay to be condoned as there is no malafide mistake / intention that could be attributable on the assessee in causing the delay in filing the present appeal before this Tribunal.
2.4. On the contrary, the Ld.DR though vehemently opposed the condonation of delay was of the opinion that the issue should be decided on merits.
We have perused the submissions advanced by both sides in the light of records placed before us.
3. From the affidavit filed by the assessee, there does not arise any malafide intention on behalf of assessee for not filing the present appeal before this Tribunal.
3.1. In our view, the assessee has made out a reasonable cause for the delay that is caused in filing the present appeals before this Tribunal. Nothing to establish any contrary intention has been filed by the revenue before this Tribunal. In our opinion there is a sufficient cause for condoning the delay as observed by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 in support of his contentions.
3.2. We place reliance on following observations by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 wherein, Hon’ble Court observed as under:-
“The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits”. The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy.
And such a liberal approach is adopted on principle as it is realized that :
1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties.
……….. 1.Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.”
3.3. Considering the submissions by both sides and respectfully following the observation by Hon’ble Supreme Court, we find it fit to condone the delay caused in filing the present appeals as it is not attributable to the assessee.
In any event, though the procedural law pertaining to the limitation has been drafted to construe it strictly, the fact remains that, considering such technicalities will not advance the cause of justice.
3.4. We take support from the observations of Justice Krishna Iyer wherein he has quoted at various occasion while dealing with technicalities that “any interpretation that alludes substantive justice is not to be followed and that substantive justice must always prevail over procedural technicalities”. Even Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 has laid down a ratio of similar principles. Respectfully following the thoughts propounded by Late Hon’ble Justice Krishna Iyer, as well as various decisions of Hon’ble Supreme Court on similar issues, I condone the delay caused in filing the present appeals before this Tribunal.
Accordingly, we condone the delay in filing the present appeals before this Tribunal.
4. At the outset, the Ld.AR submitted that this is the second round of litigation. He submitted that this Tribunal had remitted the issue to the Ld.AO to consider the claim of assessee regarding deduction u/s. 80P(2)(a)(i) of the act in accordance with law. The Ld.AR submitted that the assessing officer once again dismissed the claim of assessee by relying on the decision of Hon’ble Supreme Court in case of Citizen Co-operative Society Ltd. vs. ACIT reported in 397 ITR 1. He submitted that the authorities below has not considered the decision of Hon’ble Supreme Court in case of Mavilayi Service Co- operative Bank Ltd. v. CIT reported in 431 ITR 1 as the facts of the assessee is different from the facts considered by Hon’ble Supreme Court in case of Citizen Cooperative Society Ltd. vs. ACIT (supra).
4.1. On the contrary, the Ld.DR relied on the orders passed by authorities below.
We have perused the submissions advanced by both sides in the light of records placed before us.
5. Admittedly, the recent decisions of Hon’ble Supreme Court in case of Mavilayi Service Co- operative Bank Ltd. v. CIT (supra) and Kerala State Co-operative Agricultural and Rural Development Bank Ltd. vs. AO reported in (2023) 154 taxmann.com 305 has not been considered by the authorities below.
5.1. In the first round of litigation, this Tribunal did not have the benefit of the above referred decisions by Hon’ble Supreme Court as it has been passed after this Tribunal pronounced the order. In the interest of justice, we once again remit these issues to the Ld.AO to consider the claim of assessee in accordance with the decisions of Hon’ble Supreme Court in case of Mavilayi Service Co- operative Bank Ltd. v. CIT (supra) and Kerala State Co-operative Agricultural and Rural Development Bank Ltd. vs. AO (supra). We also direct the Ld.AO to consider the decisions of this Tribunal wherein the claim in respect of interest on fixed deposits if any is not allowed u/s. 80P(2)(d) has to be considered in accordance with law by allowing the expenditure u/s. 57. Various decisions of this Tribunal may also be referred to for the sake of completeness of this issue.
Accordingly, the grounds raised by assessee in all the three appeals stands partly allowed for statistical purposes.
In the result, all the three appeals filed by the assessee stands allowed for statistical purposes.
Order pronounced in the open court on 12th August, 2024.
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