IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH : BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER Assessment Year : 2010-11 The Pavagada Souharda Credit Co-operative Ltd., The Income Tax #3, I Floor, M G Rod, Officer, Kolar, Ward – 1, Karnataka – 563 101. Kolar.

Vs.

PAN: AAAAT7737L APPELLANT RESPONDENT Assessee by : Shri Ravishankar, Advocate Revenue by : Shri Subramanian .S, JCIT-DR Date of Hearing : 07-04-2025 Date of Pronouncement : 30-04-2025

ORDER

PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of the Addl/JCIT(A)-1, Chandigarh dated 19/09/2024 in respect of the A.Y. 2010-

11 and raised the following grounds:

“1. The processing of revised return under section 143(1) of the Income Tax Act, 1961 (hereinafter "the Act") in so far as it is against the appellant is opposed to law, equity and weight of evidence, probabilities, facts and circumstances of the case.

2. The appellant denies itself liable to be assessed to a total income of Rs.1,00,73,630/- as against the income returned at Rs. NIL for the impugned assessment year

2010-11 on the facts and circumstances of the case.

3. The learned Addl.CIT(A) has failed to appreciate that the CPC is not justified in processing the return under section 143(1) of the Act and disallowing the claim of deduction of Rs.1,00,73,630/- under section 8oP of the Act without providing an opportunity of hearing, thereby violating the principles of natural justice under the facts and circumstances of the case.

4. The authorities below have failed to appreciate that the disallowance of deduction under section 80P of the Act is not a permissible adjustment under section 143(1) of the Act under the facts and circumstances of the case.

5. The authorities below have failed to appreciate that the appellant is a credit co-operative society registered under the Karnataka Souharda Society Act, 1997 and is engaged in the business of providing credit facilities to its members, thus, it is lawfully eligible for claim of deduction under section 8oP of the Act.

6. Grounds on dismissal of first appeal on delay:

a. The learned Addl.CIT(A) has erred in dismissing the appeal by not condoning the delay in filing the first appeal, on the facts and circumstances of the case.

b. The learned Addl.CIT(A) has failed to appreciate that there existed `sufficient cause' for delay in filing the appeal before the first appellate authority and the learned Addl.CIT(A) ought to have condoned the delay by exercising power conferred under section 249(3) of the Act on the facts and circumstances of the case.

7. The authorities below have failed to appreciate that the appellant has surrendered the PAN, on the facts and circumstances of the case.

8. The appellant denies the liability to pay interest under section 234A, 234B and 234C of the Act in view of the fact that there is no liability to additional tax as determined by the learned assessing officer. Without prejudice the rate, period and on what quantum the interest has been levied are not in accordance with law and further are not discernible from the order and hence deserves to be cancelled on the facts and circumstances of the case.

9. The appellant craves leave to add, alter, delete or substitute any of the grounds urged above.

10. In view of the above and other grounds that may be urged at the time of the hearing of the appeal, the appellant prays that the appeal may be allowed and appropriate relief be granted in the interest of justice and equity.”

2. The brief facts of the case are that the assessee is a credit co-operative society and filed their return of income declaring Nil income after claiming deduction u/s. 80P(2)(a)(i) of the Act. The CPC processed the return and sent an intimation on 17/03/2011 in which they disallowed the claim of deduction. Before sending the intimation, the assessee was not intimated about the proposal to disallow but the intimation was sent by disallowing the