9911796707
TMI Blog2025 (5) TMI 1496X X X X Extracts X X X X X X X X Extracts X X X X ..... opposed to law and contrary to the facts of the case and against equity and principles of natural justice. 2) The Appellant is a Co-operative Society registered under Kerala Co-operative Societies Act, 1969 providing credit facilities to its members. The loans are provided to members only and not to non- members/public. 3) Being a co-operative society carrying on the activity of providing credit facilities to its members, the appellant is eligible for deduction of its business income under section 80P(2)(a)(1) of the Act. 4) The amount of Rs. 99,73,924/- is the profit as per P&L account. From this profit we have arrived at the gross total income of Rs. 1,53,59,677/- by adding back the various reserves which related to the loans provided to members as bad debts, overdue interest etc. created by the society Rs. 2,20,55,207/-, provision for gratuity Rs. 79,413/-, donation disallowed Rs. 20,500/- and also the depreciation charged in the P&L Rs. 1,09,286/-, total comes to Rs. 2,22,64,406/- which are claimed as an expenditure in the P&L and also by deducting the corresponding opening reserves reversed during the year Rs. 1,64,96,757/- and also the depreciation as per IT rules Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be treated as part of income from providing credit facility to members, may be allowed as deduction u/s 80P(2) (a) (i). 3. At the outset, there is a delay of 96 days in filing both these appeals before this Tribunal. The assessee for both these years have filed the separate application for condonation of delay& grounds of petition along with an affidavit in original. Since the grounds of petition for condoning the delay as well as the contents of the affidavit submitted before us are same, we are reproducing the application, grounds of petition and affidavit for the Assessment year 2015-16 below for ease of reference & convenience. 3.1 Before us, the ld. A.R. of the assessee submitted that if the delay is not condoned, the assessee would be put to a great hardship and irreparable injury and on the other hand, no hardship or injury would be caused to the revenue if condonation of delay is allowed. 3.2 The ld. D.R. on the other hand submitted that appeal may be dismissed in limine without adjudicating the same as the assessee could have filed the appeal within 60 days from the date of the receipt of the order of the ld.CIT(A)/NFAC. Further the ld. DR submitted that the filing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be decided on merits after hearing the parties. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the 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. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 3.5 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injusti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Information Description Value AIR-001 Deposited cash of Rs. 10,00,000/- or more in a saving Bank Account 2,70,23,297 CIB-410 Deposit in cash aggregating Rs. 2,00,000/- or more, with a Banking company 2,41,50,000 4.1 Subsequent to reason recorded, a notice u/s 148 of the Act was issued on 31.03.2021 and in response, the assessee could filed its return of income only on 21.02.2022 due to glitches in the income tax portal on account of switch over to the new portal by declaring total income at Rs. NIL claiming deduction u/s 80 P(2)(a)(i) of the Act of Rs. 1,53,59,677/-. However on the one hand the AO treated the return filed against notice u/s 148 as non-est and on the other hand issued notice u/s 143(2) of the Act on 21.03.2022. The AO also issued 3 nos. of notices u/s 142(1) of the Act as well as a show cause notice dated 19/02/2022. The AO after considering the reply of the assessee during the course of assessment proceedings held that the assessee had failed to prove the source of credits in its bank account. Further the AO was of the view that the assessee has not submitted any concrete evidence to prove and in response to show cause notice also the assessee did not furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellaneous income of Rs. 36,19,407/-, Reserve for due to the item of Rs. 1,30,04,655/- and arrear on interest of Rs. 26,48,290/- during the year and therefore did not qualify for deduction u/s 80P(2)(a)(i) of the Act as it is not earned from the business of providing credit facility to its members and accordingly disallowed and brought to tax. Thus, The AO completed the assessment u/s 143(3) r.w.s 147 r.w.s 144B of the Act on 26.03.2022 on a total assessed income of Rs. 6,69,43,001/-. 5. Aggrieved by the order of the AO passed u/s 143(3) r.w.s 147 r.w.s 144B of the Act on 26.03.2022, the assessee preferred an appeal before the ld. CIT (Appeals)/NFAC. 6. The ld. CIT(A)/NFAC partly allowed the appeal of the assessee after calling for the remand report from the LJAO. Regarding the addition made u/s 69A of the Act, the ld. CIT(A)/NFAC observed that the burden of proof had been discharged by the assessee in the remand report proceedings. Further, the ld. CIT(A)/NFAC held that on the basis of cogent explanation and supporting evidence during preparation of remand report, after due verification, it has been accepted by the revenue that members are owners of the deposited cash and not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passing the order under section 154 read with section 250 of the act, the ld. CIT(A)/NFAC has wrongly mentioned the addition figure as Rs. 1, 61,41,520/- as against the actual figure of Rs. 53,85,753/-. 9. The ld. DR on the other hand relied upon the order of the ld. CIT (A)/NFAC. 10. On going through the orders of the AO as well as the ld. CIT (A)/NFAC, we find that the issue involved in the present case is whether the Net profit of Rs. 99,73,924/- as declared in the profit and loss account will be treated as the amount eligible for deduction or the adjusted Net Profit amounting to Rs. 1,53,59,677/- declared as gross total income? Further, whether the entire net profit as claimed to be from providing the credit facilities to its members& treated as profits and gains of business or profession or whether interest & Income from House property is to be excluded & treated under respective heads? 11. We have heard the rival submissions and perused the materials available on record. It is an undisputed fact that the assessee is a cooperative Society registered under the Kerala Cooperative societies act & providing credit facilities to its members only. Further, the assessee society al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undisputed fact that the net profit as per profit and loss account after adjusting the loss from the trading activity is Rs. 99,73,924.49. The assessee has added back the reserves and provisions created during the year amounting to Rs. 2,22,64,406.60 and deducted reserves and provisions released during the year as well as depreciation allowable as per IT rules amounting to Rs. 1,68,78,654.05 in order to arrive at the net profit of Rs. 1,53,59,677.04 as per the provisions of the income tax act and also declared as gross total income. The learned CIT(A)/NFAC by observing that nothing has been brought on record in assessment proceedings, remand report/appellate proceedings, to establish allowability of such excess amount under section 80P(2)(a)(i) of the act and hence the addition of Rs. 53,85,753/- was sustained. However, ongoing through the statement of total income submitted by the assessee before the learned CIT(A)/NFAC, we find the same as self-explanatory. Therefore, we have no hesitation in holding that the net profit declared as a gross total income amounting to Rs. Rs. 1,53,59,677.04 is the actual net profit of the cooperative Society as per the provisions of the income tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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