High Court of Orissa · Judgments and reasoned final orders
The Reserve Bank Employees Co-operative Credit Society Limited v. Principal Chief Commissioner of Income Tax, Odisha Region & Others
W.P.(C) No. 7708 of 2025 ·
Refusal under section 119(2)(b) to condone delay in filing returns and audit reports of a cooperative credit society for AYs 2018-19 to 2022-23 quashed where delay was caused by statutory audit pendency before the state Directorate of Cooperative Audit.
1. FACTS OF THE CASE
The petitioner, a cooperative credit society registered under the Odisha Co-operative Societies Act, 1962 whose members are employees of the Reserve Bank of India, Bhubaneswar, filed applications on 14.03.2024 under section 119(2)(b) read with CBDT Circular No. 13/2023 dated 26.07.2023 seeking condonation of delay in filing income-tax returns and tax audit reports for AYs 2018-19 to 2022-23 so as to claim deduction under section 80P. Under section 62 of the Odisha Co-operative Societies Act, 1962, audit of the society's accounts lay exclusively within the control of the Auditor-General of Co-operative Societies, Odisha, which completed the statutory audits for FYs 2017-18 to 2021-22 only between 07.09.2021 and 25.01.2024. By common order dated 13.06.2024, the PCCIT, Odisha Region rejected the applications on the ground that the society had not pursued the Audit Directorate aggressively enough and had failed to file timely unaudited returns.
2. DISCUSSION BY THE COURT
In an exhaustive 55-page judgment surveying judicial precedents across High Courts on section 119(2)(b), 'genuine hardship' (B.M. Malani v. CIT, (2008) 10 SCC 617; Sitaldas K. Motwani v. DGIT), and statutory cooperative audits (Subramania (Valparai) Primary Agricultural Cooperative Credit Society v. CIT;gevoel of CBDT Circular No. 13/2023), the Division Bench held that because the appointment of auditors and completion of statutory audit under the Odisha Co-operative Societies Act, 1962 were entirely beyond the petitioner's control, the delay resulted from circumstances impossible for the society to overcome unilaterally (lex non cogit ad impossibilia). Denying condonation would inflict severe financial hardship on a salaried employees' cooperative society otherwise statutorily entitled to deduction under section 80P.
3. JUDICIAL DECISION
The High Court quashed the PCCIT's common order dated 13.06.2024 passed under section 119(2)(b) and issued a writ of mandamus directing the authorities to condone the delay and allow the petitioner-society to file its returns of income along with audit reports for AYs 2018-19 to 2022-23 for processing its section 80P claim in accordance with law.
4. OUTCOME
In favour of the assessee (The Reserve Bank Employees Co-operative Credit Society Limited); PCCIT order dated 13.06.2024 quashed and writ petition allowed.
5. AKHB REVIEW POINT
AKHB analysis: Where a cooperative society's accounts must statutorily be audited by the State Cooperative Audit Directorate before tax audit and return filing, delay by the State audit machinery constitutes 'genuine hardship' and a circumstance beyond the assessee's control under section 119(2)(b) and CBDT Circular No. 13/2023.
Source and verification
Reviewed from the complete 55-page official High Court judgment PDF (20260109_ODHC010130642025.pdf, SHA-256: 906867329b295c8d306d33bd5f056fe82e4eb0fa99953b6c85f9c046dd96b3fd).
Original PDF: 55 pages · SHA-256: 906867329b295c8d306d33bd5f056fe82e4eb0fa99953b6c85f9c046dd96b3fd
Supplied source-reviewed note retained; original bytes and identity validation checked in this release. Substantive re-review is not claimed for this record.
Refers to the Income-tax Act, 1961 and allied statutory rules/circulars as applicable to the relevant assessment years.
No subsequent Supreme Court reversal or stay is recorded in the source judgment text.
AI disclosure and professional disclaimer
AI-assisted source review. Independent human approval is not represented.
General research only. Read the complete judgment and verify applicable law and subsequent treatment before reliance.