MEHR-NAZ CO-OP HOUSING SOCIETY LTD ,MUMBAI vs. ITO 25(2)(1), MUMBAI

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ITA 1032/MUM/2026Status: DisposedITAT Mumbai26 May 2026AY 2021-225 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the matter to the file of the AO for de novo adjudication. The AO was directed to examine the Section 80P deduction claim after giving the assessee an adequate opportunity of being heard and verifying evidence, subject to a cost of Rs. 2,000/-.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed ex-parte. The assessee's primary grievance was the disallowance of deduction under Section 80P by the AO during processing under Section 143(1).

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order, and whether the disallowance of Section 80P deduction under Section 143(1) was justified.

Which sections of the Income-tax Act were involved?

Section 80P,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLE SANDEEP GOSAIN & HON’BLE BIJAYANANDA PRUSETH

For Respondent: Shri Aditya Rai ( SR. DR.)

आदेश / ORDER

PER SANDEEP GOSAIN, JUDICIAL MEMBER: This appeal is filed by the Assessee against the order of Ld. CIT (A), ADDLJCIT (A) -6 KOLKATTA vide DIN: - dated 12-Jan-2026 for the Assessment Year 2021-22.

The Assessee has raised the following grounds of appeal:

Ground No. 1

ITA 1032/MUM/2026 MEHR-NAZ CO-OP HOUSING SOCIETY LTD

The Additional CIT(A)-6 Kolkata (herein after referred to as 'CIT(A)') passed an ex- parte order dismissing the appeal of the appellants. The Appellants submit that since they had requested for an adjournment, the CIT(A) has erred in passing an ex-parte order without giving a further opportunity to the appellants and therefore the said order being against the principle of natural justice is bad in law.

The appellants therefore pray that the order be set-a-side and remanded back to the CIT (A) for adjudicating on merits

Ground No.2

Without prejudice to above, The Assistant Director of Income Tax (ADIT), CPC Bangalore (herein after referred to as AO), erred in disallowing the Appellant's claim for deduction under section 80P of Rs.9,27,425, being interest earned from Co- operative banks while processing the Return under section 143(1) The Appellants submit that this adjustment is beyond the scope of section 143(1) and is bad in law. The Appellants therefore pray that the order passed under section 143(1) be quashed.

Ground no. 3

Without prejudice to above Grounds, the AO erred in disallowing the deduction claimed under section 80P amounting to Rs.9,27,425 while processing the Return under section 143(1). The Appellants submit that they have satisfied all the conditions for claiming deduction under section 80P and therefore the AO ought to have allowed the deduction of Rs.9,27,425.

The Appellants therefore pray that the jurisdictional Assessing Officer i.e. ITO 17(2)(4) be directed to allow the claim of the Appellants and delete the addition of Rs.9,27,425.

2.

At the very outset, it was submitted by the Ld. AR that the assessee was ex parte before the Ld. CIT(A) and, even otherwise, the issue involved in the present appeal is squarely covered by the decision of the Coordinate

ITA 1032/MUM/2026 MEHR-NAZ CO-OP HOUSING SOCIETY LTD Bench of the ITAT in the assessee's own case. On the contrary, the Ld. DR relied upon the orders passed by the Revenue Authorities.

3.

We have considered the facts of the case and, after hearing the parties at length, perusing the material placed on record, the judgments cited before us, and the orders passed by the Revenue Authorities, we find that although the assessee was ex parte before the Ld. CIT(A), the only grievance raised in the present appeal relates to challenging the order of the Ld. CIT(A) in upholding the order of the AO in disallowing the assessee's claim for deduction under Section 80P of the Act amounting to Rs. 9,27,425/-. In this regard, it was submitted by the Ld. AR that the claim of the assessee under Section 80P(2)(d) of the Act is only in respect of interest received from Cooperative Societies/Cooperative Banks, and the computation of income clearly demonstrates that the assessee had duly offered taxable interest, thereby substantiating the correctness of the claim.

4.

Be that as it may, since the assessee was ex parte before the Ld. CIT(A), and after considering the entire facts of the present case and keeping in view the decision of the Coordinate Bench of the ITAT in ITA No. 9437/Mum/2025 (AY: 2020-21), we deem it appropriate to restore the matter back to the file of the AO for de novo adjudication.

5.

The AO shall examine the claim of deduction under Section 80P(2)(d) of the Act after giving adequate and sufficient opportunity of being heard to the assessee and after verifying the relevant evidences.

6.

Keeping in view our aforesaid discussion, we restore the matter back to the file of the AO to adjudicate this ground afresh by way of a de novo assessment. The AO shall decide the issue afresh after providing adequate

ITA 1032/MUM/2026 MEHR-NAZ CO-OP HOUSING SOCIETY LTD opportunity of being heard to the assessee, subject to payment of costs of Rs. 2,000/- by the assessee. The said amount shall be deposited in the Prime Minister’s Relief Fund, and a copy of the receipt shall be placed on record before the AO within 30 days from the date of receipt of this order. The assessee shall not seek adjournment on frivolous grounds and shall remain cooperative during the course of the proceedings. The assessee shall also be at liberty to raise new grounds or file fresh evidence in support of its case.

7.

Before parting, we make it clear that our decision to restore the matter to the file of the AO shall in no manner be construed as having any bearing on the merits of the dispute, which shall be adjudicated independently by the AO in accordance with law. Needless to mention, the AO shall provide adequate opportunity of being heard to the assessee.

8.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 26.05.2026.

Sd/- Sd/- BIJAYANANDA PRUSETH SANDEEP GOSAIN ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 26.05.2026

ITA 1032/MUM/2026 MEHR-NAZ CO-OP HOUSING SOCIETY LTD

Copy to: MEHR-NAZ CO-OP HOUSING SOCIETY LTD , MHR-NAZ CO-OP HOUSING SOCIETY LTD 1 91 MEHR-NAZ CHS LTD CUFFE PARADE., MUMBAI-400005, MAHARASHTRA ITO 25(2)(1), KAUTILYA BHAVAN. BANDRA EAST. 2 BKC., MUMBAI-400051, MAHARASHTRA 3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE

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