Case Law Details
Shirol Panchayat Samitti Karmchari Sahakari Vs ITO (ITAT Pune)
CIT(A) Cannot Reject Appeal Without Deciding Section 80P Claim on Merits; Delay of Over Seven Years Condoned Because Assessee Relied on Tax Consultant; Section 80P Disallowance by CPC Sent Back for Fresh Adjudication; ITAT Prefers Substantial Justice Over Technical Delay in Section 80P Appeal; CPC’s Power to Deny Chapter VIA Deduction for Late Return Questioned Before ITAT; ITAT Restores Section 80P Matter Because CIT(A) Did Not Examine Judicial Precedents; Lack of Tax Knowledge in Rural Cooperative Society Accepted as Reasonable Cause for Delay.
The Income Tax Appellate Tribunal (ITAT), Pune dealt with an appeal filed by Shirol Panchayat Samitti Karmchari Sahakari for Assessment Year 2015-16 against the order dated 14.11.2025 passed by the Addl./JCIT(A)-2, Visakhapatnam arising from an intimation order under Section 143(1) of the Income Tax Act, 1961.
No one appeared on behalf of the assessee despite service of notice, and the Tribunal proceeded ex parte with the assistance of the Departmental Representative.
The issue in dispute related to denial of deduction under Section 80P by the Centralized Processing Centre (CPC) on account of delay in filing the return of income. The assessee society had declared income of Rs.8,82,748 and claimed deduction under Section 80P. However, the return was filed on 22.11.2016 against the due date of 07.09.2015.
The assessee challenged the adjustment before the CIT(A), contending that prior to the Finance Act, 2021, CPC did not have authority under Section 143(1)(a)(v) to disallow deductions under Chapter VIA merely because the return was filed late. Reliance was placed on the decision of the Mumbai Bench of the Tribunal in Sai Prerana Coop. Credit Society Ltd. vs. ITO.
The appeal before the CIT(A) was delayed by 2659 days. The reasons for the delay were explained through an affidavit, which stated that the delay occurred due to lack of proper advice from the tax consultant regarding denial of deduction under Section 80P. The assessee also submitted that the society was situated in a village in Kolhapur District and depended entirely on tax consultants for income-tax matters because its members were not well versed with taxation issues.
The Tribunal observed that the assessee had made out a prima facie case based on judicial precedents holding that prior to the Finance Act, 2021, CPC had no express authority to disallow Chapter VIA deductions for delay in filing returns.
The Tribunal considered whether such a substantial delay should be condoned. Reference was made to the judgment of the Bombay High Court in Vijay Vishin Meghani vs. DCIT, where delay of 2984 days caused by improper legal advice was condoned. The Tribunal also referred to the Supreme Court judgment in Collector of Land Acquisition vs. Mst. Katiji, which held that substantial justice should prevail over technical considerations where delay is non-deliberate.
The Tribunal further noted the Bombay High Court’s observation that no litigant should be deprived of adjudication on merits unless the delay is deliberate, negligent, or lacking bona fides.
Considering the facts and circumstances, the Tribunal held that the delay in filing the appeal before the CIT(A) was not intentional and that the assessee was prevented by reasonable cause from filing the appeal within the prescribed time. Accordingly, the delay was condoned.
The Tribunal also observed that the CIT(A) had not adjudicated the issue on merits. Therefore, the matter was remanded back to the file of the CIT(A) for fresh adjudication in light of settled judicial precedents. The CIT(A) was directed to provide reasonable opportunity to the assessee and consider documents and evidence to be filed during the proceedings.
The assessee was also directed to remain vigilant in future proceedings and comply with notices issued by the CIT(A) without seeking unnecessary adjournments.
Accordingly, the appeal of the assessee was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT PUNE
The captioned appeal at the instance of assessee pertaining to A.Y. 2015-16 is directed against the order dated 14.11.2025 framed by Addl/JCIT (A)-2 Visakhapatnam arising out of Intimation Order dated 21.11.2017 passed u/s. 143(1) of the Income Tax Act, 1961 (in short ‘the Act’).
2. When the case called for, none appeared on behalf of the assessee despite due service of notice of hearing. Even on previous date of hearing on 05.02.2026, there is no representation from the side of assessee. I therefore proceed to adjudicate the appeal exparte qua assessee with the assistance of ld. Departmental Representative.
3. I have heard ld. DR and perused the record placed before me. I note that in the instant appeal prima-facie adjustment has been made by CPC denying the deduction u/s.80P of the Act on account of delay in furnishing of return of income. The assessee in the return of income for A.Y. 2015-16 has shown the income of the society at Rs.8,82,748/- and claimed deduction u/s.80P of the Act. Return has been filed beyond the due date, i.e. as against the due date 07.09.2015 return has been filed on 22.11.2016. Assessee has challenged the adjustment made by CPC by filing the appeal before ld.CIT(A) taking a ground that prior to Finance Act, 2021 CPC had no authority to disallow the deduction under Chapter VIA for delay in furnishing the return of income. Reliance placed on the decision of Coordinate Bench, Mumbai in the case of Sai Prerana Coop. Credit Society Ltd. Vs. ITO – ITA No.3169/Mum/2022 order dated 20.02.2023. I further note that the appeal of the assessee was delayed by 2659 days. Reasons have been mentioned in the affidavit filed before ld.CIT(A) and the contents have been reproduced in para 2.2 of the impugned order and the major reason is on account of lack of proper advice from the Tax Consultant regarding the issue of denial of deduction u/s.80P of the Act. Admittedly, the society is located in a village Shirol in Kolhapur District and they are completely dependent upon the Tax Consultants for the income-tax matters and are not well versed in the Taxation matters. Assessee has also made prima-facie case that decisions have been rendered on the similar issue deciding that prior to Finance Act, 2021, CPC had no express authority is provided u/s.143(1)(a)(v) of the Act to disallow the deduction claimed under Chapter VIA of the Act on account of delay in furnishing the return of income.
4. The moot point is as to whether such a huge delay deserves to be condoned. At this stage, it is relevant to note the judgment of the Hon’ble Bombay High Court in the case of Vijay Vishin Meghani Vs. DCIT & Anr (2017) 398 ITR 250 (Bom) holding that none should be deprived of an adjudication on merits unless it is found that the litigant deliberately delayed the filing of appeal. In that case, delay of 2984 days crept in due to improper legal advice. Relying on Concord of India Ins. Co. Limited VS Nirmala Devi (1979) 118 ITR 507 (SC), the Hon’ble jurisdictional High Court condoned the delay.
5. The Hon’ble Supreme Court in the case of Collector of Land Acquisition vs. Mst. Katiji, 167 ITR 471 (SC) held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. The Hon’ble Jurisdictional High Court in the case of Vijay Vishin Meghani vs. DCIT, 389 ITR 250 (Bom.) held that in the matter of condonation of delay an overall view in the larger interest of justice has to be taken. None should be deprived of an adjudication on merits unless the Court of law or the Tribunal/Appellate Authority finds that the litigant has deliberately and intentionally delayed filing of the appeal, that he is careless, negligent and his conduct is lacking in bonafides.
6. Under these given facts and circumstances and also observing that delay in filing of appeal by the assessee before ld.CIT(A) is not intentional and due to ‘reasonable cause’ assessee was prevented to file the appeal within the stipulated time, I hereby condone the delay before ld.CIT(A) placing reliance on the decisions referred (supra).
7. Since ld.CIT(A) has not adjudicated the issue on merits, the matter is remitted back to the file of ld.CIT(A) for afresh adjudication in the light of settled judicial precedents. Needless to mention that ld.CIT(A) in the set aside proceeding shall provide reasonable opportunity to the asseseee and consider the documents/evidences to be filed by the assessee. Assessee is also directed to remain vigilant and make satisfactory compliance to the notice(s) of hearing issued by ld.CIT(A) and should refrain from taking adjournments unless otherwise required for reasonable cause. Effective grounds of appeal raised by the assessee are allowed for statistical purposes.
8. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 17th day of April, 2026.
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