MUMBAI: In a significant relief to a cooperative housing society, the Mumbai bench of the Income-Tax Appellate Tribunal (ITAT) has condoned a delay of more than 13 years in filing an appeal and restored its tax deduction claim for fresh adjudication, observing that a genuine claim should not be defeated due to procedural lapses.The case involved a housing society in the tony area of Nepean Sea Road, whose claim for deduction of Rs 13.77 lakh under Section 80P of the Income-Tax (I-T) Act was disallowed for the financial year 2011-12, resulting in a substantial increase in the society’s income. This section allows for a deduction on interest earned from investments with other cooperative societies, such as banks.The commissioner (appeals) dismissed the appeal submitted by the society in Feb 2026, as more than 13 years had lapsed and it was time-barred.Challenging this action before the ITAT, the society argued that the delay occurred because its part-time accountant and tax consultant believed the issue could be resolved through rectification proceedings before the I-T officer rather than through an appeal. It also cited changes in the society managing committee members, dependence on accountants and disruptions caused during the Covid-19 pandemic.A tax expert points out that changes in the managing committee after each election, lack of a smooth transition, especially owing to internal conflicts, and high turnover among office administrative staff result in housing societies facing such challenges. “A condonation of a lapse of 13 years was based on the specific facts of this case — even so it is quite significant,” he said.In this case, the ITAT bench observed that the delay occurred due to circumstances beyond the housing society’s control and not because of any mala fide intention.The tax tribunal noted that the housing society appeared prima facie entitled to the tax deduction claimed and its legitimate claim was denied through an adjustment made during return processing. Refunds due to the housing society in respect of certain years were getting adjusted against the tax demand for the financial year 2011-12.The ITAT directed the income-tax officer to re-examine the tax benefit claimed after carrying out necessary factual verification, including giving an opportunity to the housing society to present its submissions.
