ITAT Refuses to Condone 7-Year Delay in Section 80P(2) (d) Dispute; Company Fails to Justify Massive Delay

ITAT Refuses to Condone 7-Year Delay in Section 80P(2) (d) Dispute; Company Fails to Justify Massive Delay

The present five appeals have been filed by a company named Vissanji A 1 Friends Cooperative Housing Society Limited before the Income Tax Appellate Tribunal (ITAT), Mumbai, relating to the Assessment Years 2011-12 to 2015-16. The final decision on the matter was announced on November 19, 2025. 

All appeals were against intimation orders passed under section 143(1), where the CPC disallowed the society’s claim of deduction under section 80P(2)(d) relating to interest income from co-operative banks. All first appeals before the CIT(A) were dismissed because they were filed after a massive delay of around 7 years, and the CIT(A) refused to condone the delay. The final decision on the matter was announced on November 19, 2025. 

Across all the years, the assessee raised common ground:

• CIT(A) wrongly rejected appeals due to delay.
• CIT(A) wrongly applied section 80AC, saying late return filing makes the 80P claim invalid, though 80AC was not applicable for years before AY 2018-19;
• CPC wrongly disallowed deduction u/s 80P(2)(d) in 143(1) processing, which is not allowed as a “prima facie adjustment”;
• For some years, credit for the self-assessment tax credit was not given.

Since all the issues raised in the five years were related to the issue, the tribunal decided to release a common order for all five appeals. The present order appeals to all five appeals.

The assessee is a cooperative housing society, registered under the Maharashtra Co-operative Societies Act, 1960, with registration No. BOM/HSG/FN/8793, on March 31, 2016, and filed its income tax return (ITR) for the year, disclosing a total income of Rs. 4.86 lakh, including income from house property and income from other sources, mainly interest received. The assessee also claimed deductions under section 80P (2)(d) of Rs. 154,008 in respect of interest income. The return was processed by the Centralised Processing Centre of the Income Tax Department (CPC), Bengaluru, and an intimation order was issued dated August 16, 2016. The CPC Bengaluru declared the total income of the assessee at Rs. 5.03 lakh. When the return was successfully processed, the CPC Bengaluru disallowed the assessee’s claim of deduction made under section 80P(2)(d) of Rs. 60,853 and raised a demand of Rs. 60,850 on the assessee. 

The aggrieved assessee first approached the CIT(a) by filling out Form No. 35 with a delay of seven years and one month. The CIT(A) found that the intimation for AY 2015-16 was issued on June 18, 2016, and served on June 20, 2016. The assessee had 30 days to file the appeal, but instead filed it only on November 16, 2023. The CIT (A) analysed the reasons given by the assessee behind the delay and found no “sufficient cause” to condone such a long delay.

Afterwards, the assessee approached the tribunal. The present appeal to the tribunal was also filed about 342 days late. The assessee submitted two affidavits explaining the reason behind the delay. The tribunal noted that the returns for all years were filed late, the first appeals were filed after 7 years, and the ITAT appeals were also delayed, showing a pattern of continuous non-compliance.

In affidavits, the assessee mentioned that their society is run by senior citizens. The accountant handled all tax matters and used his personal email. The notices were sent to the same email address, and he did not inform society about the notice. He left his role, and the new accountant could only discover the final orders in 2025. Hence, the delays were unintentional and due to a lack of awareness. However, the assessee could not serve any solid evidence in support of its claims. The excuses showed only carelessness, not a genuine cause. The Tribunal stated that the assessee was “exploiting the process of law” to reopen time-barred matters and that no bona fide reasons were demonstrated to justify condonation of delays running into several years.

The tribunal endorsed the decision of CIT (A), since the delay was itself not condoned by CIT (A), the tribunal ruled that the delay of more than 7 years before CIT(A) and 342 days before ITAT was not justified. Also, the assessee failed to show any solid evidence supporting the cause of the delay. The conduct reflected neglect, not bona fide reasons. Therefore, the tribunal dismissed all five appeals as barred by limitation, without going into the merits of the deduction under section 80P(2)(d).