Bangalore ITAT Holds That Limitation Period for Appeal Commences from Date of Actual Service, Not Date of Order — Section 80P Deduction Claim of Co-operative Society Restored for Fresh Adjudication
Overview
The Income Tax Appellate Tribunal (ITAT), Bangalore Bench, recently ruled in favour of SSMP Sahakari Sangha, a co-operative credit society, by condoning a purported delay of 56 days in filing an appeal before the appellate authority. The Tribunal held that when an assessee does not receive an assessment order through the postal channel and receives only a physical copy at a later date, the limitation period for filing an appeal must be counted from the date of actual receipt of such communication — not from the date on which the order was originally passed. The matter has been restored to the file of the learned Additional/Joint Commissioner of Income Tax (Appeals) for fresh consideration.
Background and Facts of the Case
SSMP Sahakari Sangha is a co-operative credit society registered under the Karnataka Co-operative Societies Act, 1959. The society's primary activities include accepting deposits from its members, extending credit facilities, and making investments.
For Assessment Year 2017-18, the society filed its return of income on 17 October 2017, declaring a gross income of ₹22,71,847. After availing deductions under Chapter VI-A of the Income Tax Act, 1961 — primarily under Section 80P — the assessee declared nil total income.
The return was subsequently picked up for scrutiny. Notices under Section 143(2) and Section 142(1) of the Income Tax Act, 1961 were duly issued and served. During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee had earned interest income from the following sources:
- Investments with BDCC Bank
- Investments with other co-operative banks
- Investments with nationalised banks
Relying on the Hon'ble Karnataka High Court's ruling in The Pr. Commissioner of Income Tax & Anr. Vs. The Totagars Co-Operative Sale Society, the AO classified this interest income as income from other sources and consequently disallowed the deduction claimed under Section 80P of the Act. The assessment was completed under Section 143(3) of the Act vide order dated 17 October 2019.
Appellate History and the Delay Controversy
Following the assessment order, the assessee filed an appeal before the learned Additional/Joint Commissioner of Income Tax (Appeals)-1. However, the appeal was filed on 11 January 2020, which the appellate authority computed as being delayed by 56 days from the prescribed statutory period.
The learned Addl./Joint CIT(A) examined the assessee's explanation but concluded that the reasons offered did not constitute sufficient cause for condoning the delay. Accordingly, the appeal was dismissed at the threshold itself — without any examination of the substantive question of whether the assessee was entitled to the deduction under Section 80P.
Aggrieved by this outcome, the assessee preferred an appeal before the ITAT Bangalore.
Grounds Raised Before the Tribunal
The assessee raised the following grounds before the Tribunal: