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TMI Blog2023 (11) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... belatedly. We rely on Case law Collector Land Acquisition Vs. Mst. Katiji & Ors, 1987 AIR 1353 (SC) and University of Delhi Vs. Union of India, Civil Appeal No. 9488 & 9489/2019 dated 17 December, 2019, hold that such a delay; supported by cogent reasons, deserves to be condoned so as to make way for the cause of substantial justice. We accordingly hold that impugned delay in filing this appeal is neither intentional nor deliberate but due to the circumstances beyond its control. The same stands condoned. Case is now taken up for adjudication on merits. 3. The grounds raised by the assessee read as under : "1) The order of the learned CIT (A) is erroneous both on facts and in law. 2) The learned CIT (A) erred in confirming the action of the Assessing Officer in rejecting the deduction u/s 80P(2) of the I.T.Act. 3) The leaned CIT (A) ought to have seen that the appellant is entitled for deduction u/s 80P of the I.T.Act and the claim for deduction of Rs. 38,22,781/- should have been allowed by the learned CIT (A). 4) The learned CIT (A) erred in holding that the appellant is not eligible for deduction u/s 80P (2) on the ground that the activities of the appellant also inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. Hence, he disallowed the deduction claimed by the assessee and added it to the returned income of the assessee and thus, completed the assessment u/s 143(3) of the Act and passed assessment order dt. 23.12.2019. 5. Feeling aggrieved with the order of Assessing Officer, assessee filed appeal and thereafter, it was migrated to the ld.CIT(A), NFAC, Delhi, who dismissed the appeal of the assessee by observing as under : "6.5 During the appellate proceedings, the appellant has mainly relied on the argument that these incidental services were provided to members like provident fund, Life Insurance for the benefit of members and were in a bona fide faith claimed as allowable. The appellant has also stressed that it has provided services to members only. 6.6 From the records, it is seen that out of total receipts of Rs. 16,01,11,047/-, interest on loan is only Rs. 91,66,381/- whereas receipts related to the income from services narrated by Assessing Officer are given below : Receipts (Insurance) Amount (Rs.) Micro Insurance premium from MACS 96,40,434/- NPS Contribution from MACS 40,02,554/- Loan Insurance premium I year - Aviya 8,44,243/- Loan Insurance premium II y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the extent of Rs. 38,22,781/-. Since the income was earned from the businesses which are not covered u/s 80P of the Act, the assessee is not eligible for deduction u/s 80P by the assessee is disallowed and the same is added back to the returned income." 8. The contention of the ld. AR before us is that the Assessing Officer has disallowed the receipt instead of the income earned by the assessee on the said amount. Therefore, the order passed by the ld.CIT(A) is not in accordance with the law. 9. Per contra, the ld.DR has submitted that the assessee has been earning income from the activities which are not fallen within the purview of section 80P of the Act as the primary activities of the assessee are referring to the insurance services and therefore, the Assessing Officer was rightly denied the deduction claimed by the assessee. 10. We have heard the rival submissions and perused the material on record. 10.1 Section 80P of the Act provides as under : Deduction in respect of income of co-operative Societies. (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivities other than those specified in clause (a) or clause (b) (either independently of, or in addition to, all or any of the activities so specified), so much of its profits and gains attributable to such activities as does not exceed,- (i) where such co-operative society is a consumers' co-operative society, one hundred thousand rupees; and (ii) in any other case, fifty thousand rupees. Explanation.-In this clause, "consumers' co-operative society" means a society for the benefit of the consumers; (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income; (e) in respect of any income derived by the co-operative society from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities, the whole of such income; (f) in the case of a co-operative society, not being a housing society or an urban consumers' society or a society carrying on transport business or a society engaged in the performance of any manufacturing operations with the aid of power, where the gross total income does not exceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is devoid of merit and we do not agree with the said contention. 13. The activities of the assessee are primarily in the nature of insurance activities as mentioned by the Assessing Officer and confirmed by the ld.CIT(A). In view of the above, we do not find any reason to state that the assessee is entitled to any deduction under section 80P(1) of the Act. Having held that in our opinion, the Assessing Officer is only entitled to disallow the deduction claimed by the assessee in the return of income with respect to insurance business. For the above said purposes, we deem it proper to remand back the matter to the file of Assessing Officer for the limited purpose with a direction to disallow the deduction claimed by the assessee in return of income which is directly relatable to the insurance activities, as it do not fall under section 80P(2) of the Act i.e., Insurance activities. Accordingly, we remand back the matter to the file of Assessing Officer for the limited purposes of verifying the deduction claimed in return of income and to pass a fresh order after affording due opportunity of hearing to the assessee in accordance with law. Further, the assessee is directed to appear b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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