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2015 (4) TMI 912 - AT - Income TaxCondonation of delay in furnishing the appeal - Mistake found in order of CIT appeal - Bonafide belief for not to claim deduction under section 80P of the Income Tax Act,1961, resulting in delay in appeal - Held that:- The assessee has in the appeal filed against the order of CIT(A) raised preliminary issue against the dismissal of appeal in limine. The CIT(A) had dismissed the condonation petition moved by the assessee holding that there was no merit in the claim of the assessee vis-à-vis deduction claimed under section 80P of the Act. The CIT(A) has further noted that the assessee by way of ground of appeal No.1 had raised the issue of deduction under section 80P of the Act. However, we find that the CIT(A) by mistake has made the said observation. The perusal of the ground of appeal filed with the Form No.35 reflects that one issue raised by the assessee i.e. while taxing the interest on Government Securities as an independent taxable income at ₹ 95,77,140/-, the learned AO erred in not setting off the loss on sale Government Securities amounting to ₹ 214,17,311/- against the profit on sale of units of mutual funds as stated earlier. The assessee had not raised any issue with regard to denial of deduction under section 80P of the Act. The order of CIT(A) on such surmises was thus, incorrect. The second aspect of the issue is whether the assessee is entitled to the condonation of delay in filing the appeal late before CIT(A). The Hon’ble Supreme Court in MST. Katiji & Ors. [1987 (2) TMI 61 - SUPREME Court] had laid down the proposition that while considering the application for condonation of delay, sufficient cause pleaded by the party should be considered. The Hon’ble Supreme Court further held that sufficient cause for the purpose of condonation of delay should be interpreted with a view to do even-handed justice on merits in preference to approach which scuttles a decision on merits. The assessee before us has pleaded for the condonation of delay in filing the appeals late before the CIT(A), especially in the circumstances where the assessee was initially under the bonafide belief that it was not entitled to the deduction under section 80P of the Act and hence, the appeals were not filed in time. However, the issue now raised is the correct computation of income in the hands of the assessee i.e. where on the one hand, the Assessing Officer had taxed gains arising on sale of securities in the hands of the assessee, similar loss arising on the sale of securities merits to be considered to the set off against the said gains on sale of securities. The second aspect pointed out by the assessee was the status of the assessee society wherein though it was formulated by the State government to carry on the specific purpose, but same could not be carried on as necessary approvals were not granted to the assessee. Thereafter, there was a decision to wind up the affairs but same could not be wound up because of holding up of money with cooperative societies which in turn, were in liquidation. In the entirety of the above said facts and circumstances, we are of the view that there was a reasonable cause for the delay in filing the appeals in time before the CIT(A) and since the assessee society was operating under the supervision of State government, we are of the view that the said delay in filing the said appeal late by 1178 days in assessment year 2006-07, before the CIT(A), merits to be condoned. Accordingly, we condone the same. - Decided in favour of assessee.
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