ITAT Restores Co-operative Housing Society’s 80P Claim After 2,698-Day Delay, Accepts Covid-Era as Sufficient Cause

The case concerns Chairman Florida Estate “B” Co-operative Housing Society Ltd., which had claimed a deduction under Section 80P in its return for AY 2015-16. An intimation under Section 143(1)(a) was issued in March 2016 disallowing the claim, but no appeal was filed at that point. The Society later explained that its then chairman, a retired wing commander who handled tax matters, passed away in April 2018, and no one else was aware of the pending tax issues. Matters came to light only upon receiving a recovery letter in January 2020, and soon thereafter, the COVID-19 outbreak further disrupted procedural steps. The Society eventually filed a rectification request under Section 154 in March 2023 and, after it failed, filed an appeal with the CIT(A) with an enormous delay of 2,698 days.

The CIT(A) dismissed the appeal in limine solely on limitation without examining the 80P issue on the merits.

Main Issue: Whether the extraordinary delay of 2,698 days in filing an appeal against the 143(1)(a) intimation disallowing the 80P deduction could be condoned, and if so, whether the Section 80P claim should be restored for adjudication on merits.

Tribunal’s Decision: The Tribunal condoned the entire delay of 2,698 days, relying on the principles laid down by the Supreme Court in Collector, Land Acquisition v. Katiji and Inder Singh v. State of Madhya Pradesh. It was observed that the Society comprised retired defence personnel who were not equipped to handle tax compliance, and the sudden demise of the chairman who managed financial affairs created a genuine and unavoidable lapse. The subsequent COVID-19 situation further compounded the delay. The ITAT held that the circumstances demonstrated bona fide reasons, with no element of negligence or deliberate inaction.

The Tribunal noted that the CIT(A) had never examined the claim under Section 80P because the appeal was dismissed as time-barred. Therefore, the ITAT restored the matter to the CIT(A) for fresh adjudication in accordance with Section 250(6), with directions to provide a reasonable hearing and consider judicial precedents relied upon by the assessee. The connected appeal, arising from the 154 order and involving the same Section 80P issue, was dismissed as infructuous.

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