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Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC”, MUMBAI
Before: Justice (Retd.) C V Bhadang, Hon’ble & Shri B R Baskaran, Hon’ble
Per Justice (Retd.) C V Bhadang : These three appeals by the assessee pertaining to assessment years 2012- 13, 2013-14 and 2015-16 involve connected questions of law and fact. As such they are being disposed of by this common order.
The appellant-assessee is a co-operative housing society. The appellant is in receipt of ‘income from other sources’ by way of interest on fixed deposits with co-operative banks as well as interest on security deposit. The appellant had filed its Return of Income (RoI) for assessment years 2012-13, 2013-14 and , 2969 & 2972/Mum/2023 Dhruva Tara Co-operative Housing Society Ltd.
2015-16 within the stipulated period of filing of return where the accounts are subject to compulsory audit, which is 30.09.2012, 30.09.2013 and 30.09.2015 respectively. In so far as assessment years 2013-14 and 2015-16 are concerned, the last date is said to be extended till 31.10.2013 and 31.10.2015 respectively. Be that as it may, the appellant had filed the returns for the aforesaid years on 25.09.2012 [revised on 13.12.2012], 20.09.2013 and 26.09.2015, which were well before the date of filing the return of income.
The appellant had claimed deduction u/s. 80P(2)(d) of the Income tax Act, 1961 (Act for short), which was disallowed by the Assessing Officer. It appears that the appellant filed an application for rectification u/s. 154 of the said Act before the CPC. The CPC vide separate orders has found that the interest income earned by the co-operative society on an investment in a co-operative bank is not allowable as deduction and, therefore, the issue raised by the assessee does not come under the purview of section 154 of the said Act. Consequently, the application for rectification came to be rejected.
The appellant-assessee challenged the said order in appeal before the CIT(A). The CIT(A) by the impugned orders, which are challenged in these appeals, has dismissed the appeals on 29.06.2023 albeit on a reason different than the one articulated in the order rejecting the rectification application. The CIT(A) has found that the RoI was not filed within the due date of filing the return and, therefore, placing reliance on section 80AC of the said Act, the disallowance made by the Assessing Officer and the CPC was confirmed and the appeals came to be dismissed, which brings the assessee before us. , 2969 & 2972/Mum/2023 Dhruva Tara Co-operative Housing Society Ltd.
We have heard the learned counsel for the appellant and the learned CIT- DR. We have also perused the grounds of appeal – both before the CIT(A) as well as before this Tribunal and gone through the impugned orders.
6. It is submitted by the learned counsel for the appellant that the learned CIT(A) is in error in dismissing the appeals on the ground that the original return of income was not filed within the stipulated period. It is pointed out that the accounts of the assessee are subject to compulsory audit and, therefore, the last date for filing of return was 30th September, which in respect of assessment years 2013-14 and 2015-16 was extended to 31st October. It is pointed out that the return of income has been filed much before the due date. It is further submitted that the requirement of filing of return within time, in order to enable the assessee to claim deduction u/s. 80P(2) was introduced w.e.f. assessment year 2018-19 vide section 80AC of the said Act, which also the learned CIT(A) has failed to notice.
The learned CIT-DR has supported the impugned orders. It is submitted that in any case the interest received by the assessee, which is a co-operative society, on deposits with a co-operative bank are otherwise not eligible for exemption u/s. 80P(2) of the said Act and, therefore, notwithstanding the fact that the returns were filed within time or the necessity to file return within time was introduced for the first time w.e.f. assessment year 2018-19 would not lead to any different result. It is therefore submitted that the appeals be dismissed.
We have carefully considered the circumstances and the submissions made. The relevant dates for filing of the return and the date on which the , 2969 & 2972/Mum/2023 Dhruva Tara Co-operative Housing Society Ltd.
returns were actually filed by the appellant are not in dispute, apart from being matters of record. A perusal of the record, clearly brings out, that while in the rectification application, the CPC has refused to grant exemption on the ground that it was an income from interest received from a co-operative bank, the learned CIT(A) has dismissed the appeals on entirely different ground viz. of return of income not being allegedly filed within time. It is necessary to emphasize that the learned CIT(A) has not gone into the question, whether the interest income received from a co-operative bank was eligible for such exemption, although that was the specific ground raised before the CIT(A).
8. Before us the only ground raised by the assessee, is of the finding by the CIT(A) being erroneous on facts both about introduction of requirement to file the return of income within time in order to claim benefit of section 80P(2), which was first introduced from assessment year 2018-19 vide section 80AC and, secondly the return being indeed filed within time. We find that both these grounds are clearly borne out record. Therefore, we find that on this ground alone the appeal has to succeed.
9. However, as noticed earlier, the learned CIT(A) has not dealt with the ground whether such income from interest received from co-operative Bank is exempt u/s. 80P(2). Incidentally, this ground is also not taken in the grounds of appeal before us. Therefore, in our opinion, only course open is to restore the appeal back to the file of the learned CIT(A)for the limited purpose of deciding as to whether interest income received from the co-operative bank is eligible for exemption u/s. 80P(2) of the said Act. In that view of the mater, the appeals are partly allowed. The impugned orders passed by the learned CIT(A) are , 2969 & 2972/Mum/2023 Dhruva Tara Co-operative Housing Society Ltd.
hereby set aside. The appeals are restored to the file of the CIT(A) for disposal, according to law and for limited purpose of deciding as to whether the interest income received from the co-operative bank is eligible for deduction u/s. 80P(2) of the Act. Needless to mention that the appellant shall give necessary assistance to the learned CIT(A) to buttress its grounds based on section 80P(2) of the Act.
In the result, the appeals are allowed for statistical purpose.
Order pronounced in the open court on 12th December, 2023.