Bakhtawar Co-Operative Housing Society Ltd. v. ITO

Case snapshot

Sections / provisions: 143(1); 249(3); 254(1); 80P(2)(d)

Questions before the Court / Tribunal

• Condonation of 13-year appellate delay; section 80P claim: The reported order concerns an exceptionally long appellate delay by a cooperative housing society. It is reported to have been condoned on the stated facts, with the section 80P(2)(d) claim restored for fresh adjudication rather than finally allowed on merits.

Material facts and background

ORDER Per Arun Khodpia, AM: This appeal is preferred by the assessee, directed against the order of Commissioner of Income Tax Appeal, ADDL/JCIT (A), Thiruvanantpuram [in short, “the Ld. CIT(A)”] dated 10.02.2026 for the assessment year 2012-13, which in turn arises from assessment order u/s 143(1) of the Income Tax Act, 1961 (“the Act”) dated 27.02.2013, passed by CPC, Bengaluru (in short, “the Ld. AO”). The grounds of appeal raised by the assessee are as under: 1. On the facts and the circumstances of the case and in law, the learning AddI/JCIT (A) erred in dismissing the appeal on account of delay in filing of an appeal without condoning the delay though the appellant had reasonable cause for delay in filing of an appeal. 2. On the facts and the circumstances of the case and in law, the learning Addl/JCIT (A) erred in dismissing the appeal in limine without considering the merits of the case. 3. On the facts and the circumstances of the case and in law, the learning Addl/JCIT (A) erred in not considering the following Grounds of Appeal: a) On the fact and circumstances of the case and in law C.P.C. Bangalore erred in disallowing deduction u/s 80P amounting to Rs. 13,77,502/- of...

intimation under section 143(1) of the Act dated 27.02.2013. The issue has been raised before the Ld. CIT(A) Appeals, who had dismissed the appeal of assessee treating the same barred by limitation being delayed by more than thirteen years in filing of the appeal. The assessee, being aggrieved with the decision of the Ld. CIT(A) Appeals, filed the present appeal before us. 3.

Appeals, an affidavit for condonation of delay in filing of appeal has been filed, stating the reasons for delay. As per the contents of the affidavit, it is explained that when the claim of deduction under section 80P(2)(d) of the assessee was rejected by the CPC, the part time accountant, who was dealing with the matters, under impression that the matter can be resolved by explaining it to the Ld. AO had pursued the same before the Ld. AO. Also, the assessing office informed that the rectification will be carried out. The Tax Consultant of the assessee society also advised for not filing of an appeal against the aforesaid adjustment. Further, due to the Pandemic Covid the office bearers as well as the accountant, who were changed, the matter remained unattended without anyone’s knowledge. Meanwhile, the refunds in respect of certain years were getting adjusted against the demand of assessment year 2012-13. The new committee, who had come into effect approached the New Tax Consultant to resolve the issue. Accordingly, they 3

Housing Society Ltd. Vs. ITO in ITA No. 1788/Mum/2026 vide order dated 05.05.2026, wherein the relevant findings of tribunal are as under: “7. We have considered the submissions of assessee and reasons furnished before us. We find that the assessee is a Co-operative Housing Society, which had tried its level best to get the rectification done through various communications with the department. In view of such facts and circumstance, while the bona fides of the assessee society cannot be disbelieved and in absence of any default on the part of the assessee. In the interest of justice, we condone the delay in filing of appeal before ld. CIT(A) and direct to decide the issuesin set aside afresh on merits.”

Appellant / assessee submissions

approached the Ld. AO for rectification and also advised that an appeal is to be filed with the Commissioner of Appeals. As per advice, an appeal was filed before the Ld. CIT(A) Appeals on 04.02.2026. It was the submission that the delay was neither willful nor intentional but occurred due to circumstances beyond control. The delay was caused because of dependance on the accountant and change of incumbents in the managing committee every three years. Further, the Covid conditions, also added the reasons for delay. It was the prayer that since the delay was purely on account of number of problems and circumstances faced by small societies, the same may be condoned in the interest of justice. On the contrary, the Ld. DR representing the revenue objected to the contentions of the assessee and have vehemently supported the orders of the Ld. CIT(A) Appeals. In rebuttal,the Ld. AR strongly placed his reliance on various decisions wherein the 80P(2)(d) was granted to the Co-Operative Housing Societies on similar facts and circumstances, as in the assessee’s case. The cases relied upon and listed as under: Sl. No. 1 2 3 4 5

Revenue / respondent submissions

approached the Ld. AO for rectification and also advised that an appeal is to be filed with the Commissioner of Appeals. As per advice, an appeal was filed before the Ld. CIT(A) Appeals on 04.02.2026. It was the submission that the delay was neither willful nor intentional but occurred due to circumstances beyond control. The delay was caused because of dependance on the accountant and change of incumbents in the managing committee every three years. Further, the Covid conditions, also added the reasons for delay. It was the prayer that since the delay was purely on account of number of problems and circumstances faced by small societies, the same may be condoned in the interest of justice. On the contrary, the Ld. DR representing the revenue objected to the contentions of the assessee and have vehemently supported the orders of the Ld. CIT(A) Appeals. In rebuttal,the Ld. AR strongly placed his reliance on various decisions wherein the 80P(2)(d) was granted to the Co-Operative Housing Societies on similar facts and circumstances, as in the assessee’s case. The cases relied upon and listed as under: Sl. No. 1 2 3 4 5

Court / Tribunal analysis and reasoning

4. We have considered the rival submissions, perused the material available on record and decisions relied upon by the assessee. Admittedly, an adjustment was made by CPC under section 143(1), by denying the claim of assessee regarding exemption under section 80P(2)(d) of the Act. It seems that the assessee society is entitled for such claim and the legitimate claim of the assessee society was denied by making a variation in the return of income. Regarding condonation of delay, we find substance in the submissions of the assessee that the delay was on account of certain reasons, which were beyond the control of assessee and it cannot be assumed that there would be any mala fide intentions or deliberate attempt of the assessee’s society in the incidence of such delay. We, thus, condone the delay in filing of appeal before the Ld. CIT(A) Appeals. 5. Further, under similar facts and circumstances, this bench had decided the issue by setting it aside to examine the claim of assessee under section 80P(2)(d), after factual verifications. This issue is equally covered by the decision of ITAT, Mumbai “SMC” bench in the case of Torino Co-operative

Housing Society Ltd. Vs. ITO in ITA No. 1788/Mum/2026 vide order dated 05.05.2026, wherein the relevant findings of tribunal are as under: “7. We have considered the submissions of assessee and reasons furnished before us. We find that the assessee is a Co-operative Housing Society, which had tried its level best to get the rectification done through various communications with the department. In view of such facts and circumstance, while the bona fides of the assessee society cannot be disbelieved and in absence of any default on the part of the assessee. In the interest of justice, we condone the delay in filing of appeal before ld. CIT(A) and direct to decide the issuesin set aside afresh on merits.”

6. Being the case of assessee identical and at parity with the facts and circumstances to the case of Torino Co-operative Housing Society Ltd. (supra), we, therefore, respectfully follow the aforesaid decision,as deemed appropriate set aside the matter to the file of Ld. AO for fresh adjudication. 7. Needless to say, the assessee shall be afforded with reasonable opportunity of being heard in the set aside proceeding. The assessee is also directed to cooperate and proactively assist in the set aside proceedings, failing which the Ld. AO would be at liberty to decide the appeal in accordance with the mandate of law. 8. In result, the appeal of assessee stands allowed for statistical purposes, in above terms. Order pronounced in the open court on 25 -05-2026.

Operative decision and relief

6. Being the case of assessee identical and at parity with the facts and circumstances to the case of Torino Co-operative Housing Society Ltd. (supra), we, therefore, respectfully follow the aforesaid decision,as deemed appropriate set aside the matter to the file of Ld. AO for fresh adjudication. 7. Needless to say, the assessee shall be afforded with reasonable opportunity of being heard in the set aside proceeding. The assessee is also directed to cooperate and proactively assist in the set aside proceedings, failing which the Ld. AO would be at liberty to decide the appeal in accordance with the mandate of law. 8. In result, the appeal of assessee stands allowed for statistical purposes, in above terms. Order pronounced in the open court on 25 -05-2026.

Authorities and precedents appearing in the judgment

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Ratio and legal principle

The decision turns on Condonation of 13-year appellate delay; section 80P claim. The operative result is classified as Quashed Or Set Aside. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with Condonation of 13-year appellate delay; section 80P claim. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Maintain a date-and-payment matrix for transfer, agreement, possession, investment and construction; capital-gains exemptions commonly turn on this chronology.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

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