RAHEJA SHERWOOD COOPERATIVE HOUSING SOCIETY LTD ,MUMBAI vs. ITO WARD 41(4)(3), MUMBAI

This appeal has been preferred by the Assessee against the order dated 27.06.2025, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2020-21.

In this case, the Assessee had declared its total income at Rs.38,15,171/- and claimed the deduction of Rs. Rs.35,10,843/- u/s 80P(2)(D) of the act, by filing its return of income for the A.Y under consideration on dated 09/01/2021, which was subsequently selected for complete scrutiny under CASS and resulted into assessing the income of the assessee to the Rs.17,16,067/- while disallowing of deduction claimed u/s 2 M/s. Raheja Sherwood Cooperative Housing Society Ltd. 80P(2)(d) of the act to the tune of Rs.17,94,776/-. It appears from the Assessment Order that during the assessment proceedings, the Assessee also filed the revised computation of the income, accepting its mistake in declaring the income at Rs.38,15,171/- as against the total interest income earned to the tune of Rs.21,76,613/- in effect, However, the Assessing Officer rejected such claim of the Assessee, mainly on the ground that the Assessee failed to revise its return of income.

In the appeal proceedings before the Ld. Commissioner, the Assessee fairly conceded its mistake on the ground that period involved pertains to Covid-19 and the actual interest income earned remained to be claimed due to inadvertent mistake, such as claiming of total interest of income Rs. 38,15,171/- in lieu of actual interest income earned to the tune of Rs. 21,76,613/- from various banks, including co-operative banks and State Bank of India and Reliance Infra.

This Court observes from the impugned order that the Ld. Commissioner by considering peculiar facts that the Assessee has not filed any Audit Report in Form No. 3CED, either on the ITD portal or before the Assessing Officer or even before him as well. Further despite of giving opportunity by the AO, the Assessee failed to revise its return of income, rejected the claim of the Assessee and dismissing 1st appeal. Whereas the Ld. Counsel for the Assessee by drawing attention of this Court to the CBDT circular No. 08/2021, demonstrated that from above circular, it clearly appears that last date for filing belated return and revised return u/s 139(5) of the act, was extended up to 31/05/2021 by the CBDT considering the Covid-19 period and the notice u/s 143 (2) was issued by the Assessing Officer subsequently on dated 29/06/2021, when no time was left to the assessee for revising its return of income and 3 M/s. Raheja Sherwood Cooperative Housing Society Ltd. therefore in aforesaid circumstances, the Assessee having left no option, revised its computation of income before the Assessing Officer and further claimed the same before the Ld. Commissioner as well.

This Court having considered the peculiar facts and circumstances of the case and orders passed by the Authorities below and rival claims of the parties, is in agreement with the Ld. DR that the Assessing Officer is not empowered to entertain any claim, whether fresh or revised, except by filing appropriate revised return of income. However, there is no prohibition for the appellate authorities to admit fresh claim made by Assessee to decide the issue, as per principle enunciated by the Hon'ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT reported in [2006] 284 ITR 323 (SC).

The Hon'ble Bombay High Court in the case of CIT V/s Pruthvi Brokers & Shareholders (2012) 23 taxmann.com 23, has held that even if the Assessee has failed to claim a deduction either in the return of income or by filing revised return of income, the Assessee can make such claim subsequently and the Appellate Authority can consider such claim.

The Hon'ble Bombay High Court in the case of Sesa Goa Ltd. Vs. Addl. CIT 430 ITR 114, has also held that the Assessee could make additional claim for deduction before the appellate authorities, which ought to be considered.

Even otherwise Article 265 of the constitution mandates that “no tax shall be levied or collected except by authority of law.”

Coming to the instant case again, from the aforesaid facts and circumstances and the documents placed on record by the Ld. Counsel for the assessee and observations made by the authorities below, it has become clear that there is some variation in the amounts declared and actual interest income earned by the Assessee and period involved pertains to Covid-19, when the entire nation was on hold, thus, for just and proper decision of the case and substantial justice and fair play, the case is remanded to the file of the Ld. Jurisdictional Assessing Officer {JAO} for decision fresh, by considering the revised computation of the income, already filed before him. The Assessee is also directed to file copy of revised computation of income already filed, just for brevity and convenience of the JAO.

The assessee’s appeal is allowed for statistical purposes.