Delay Not Intentional: ITAT Revives Co-Operative Society’s Appeal in Tax Matter

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has given relief to Bakhtawar Co-Operative Housing Society Ltd in a long-pending income tax dispute for the Assessment Year 2012-13.

The case was related to the denial of deduction under Section 80P(2)(d) of the Income Tax Act. The Central Processing Centre (CPC), Bengaluru, had earlier disallowed the society’s deduction claim of Rs. 13,77,502 while processing the return under Section 143(1). As a result of this disallowance, the society’s taxable income increased from about Rs. 1,03,210 to Rs. 14,80,720.

The society later filed an appeal before the CIT(A). However, the appeal was rejected because it was filed after a delay of more than 13 years.

Before the Tribunal, the society explained the reasons for the delay. It had been said that its part-time accountant was of the view that the problem could be solved directly with the Assessing Officer by way of rectification proceedings. The society had also said that tax consultants had opined that filing an appeal was not necessary at that time. Then, due to the Covid-19 pandemic, change in office bearers, and change of accountants and committee members, the matter remained unattended for years.

The Tribunal accepted these explanations and observed that the delay was not intentional or due to any mala fide intention. It noted that small co-operative housing societies often face administrative difficulties and depend heavily on accountants and consultants.

The Tribunal also referred to several earlier decisions where similar deductions under Section 80P(2)(d) had been allowed to co-operative housing societies.

Relying on its earlier ruling in the case of Torino Co-operative Housing Society Ltd, the ITAT condoned the delay and restored the matter to the Assessing Officer for fresh examination of the deduction claim on merits.

The Tribunal directed the Assessing Officer to provide a proper opportunity of hearing to the assessee and asked the society to cooperate during the fresh proceedings.

As a result, the housing society’s appeal was allowed for statistical purposes.