NEELKANTH NIRANJAN PREMISES CO-OP SOCIETY LTD,MUMBAI vs. INCOME TAX OFFICER 23(2)(6), MUMBAI

PER PAWAN SINGH, JUDICIAL MEMBER;

“1. The Ld. CIT(A) erred in confirming the addition of deduction under section 80P(2)(d) of the Income Tax Act 1961 of Rs.2,53,830/- towards interest income earned from cooperative banks and erred in adding the same to the total income of the assessee.

2. The Ld. CIT(A) erred in charging interest under section 234A 234B and 234C of the Income Tax Act 1961.

3. The Ld. CIT(A) erred in invoking the penalty proceeding under section 271(1)(c) of the Income Tax Act 1961.

4. The appellant craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing.”

The assessee filled up the details of exempt income in Column No. 14 instead of column No.11, which relates to deduction under section 80P(2)(d). The CPC while processing the return of income not allowed such deduction. The assessee filed application for rectification under section 154. The application under section 154 was rejected by CPC and communicated to the assessee there is no mistake apparent. The ld. CIT(A) confirmed the action / non- allowance of deduction under section 80P(2)(d) with similar observation that there was no apparent mistake. The ld. AR of the assessee submits that ld CIT(A) was fully empowered to allow to correct the mistake occurred inadvertently while filing return of income under ITR-5. The assessee was denied relief due to hyper technical reasons. The ld. AR of the assessee relied upon the decision of Bombay High Court in Sanchit Software & Solutions (P) Ltd. vs CIT (2012) 25 taxmann.com 123 (Bom), wherein it was held that if the assessee sought to exclude some exempted income, but by mistake omitted to do so, revision could not be denied. The ld AR of the assessee prayed that he may be allow to correct the mistake and matter may be restored back to the file of jurisdictional assessing officer for verification of fact and the nature of interest income and dividend income which is claimed by assessee as exempt under section 80P(2)(d). The assessee has earned interest from Saraswat Co-op Bank Ltd. Patan Co-op Bank Ltd. and Maharashtra State Co-op Bank Ltd. The Co-operative banks are primarily co- operative society as has been consistently held in a series of decisions by this Bench. The ld. AR of the assessee submits that specific direction may be given to the assessing officer for verification of fact and passing the order afresh.

Considering the fact that such omission or correction was a rectifiable mistake and could be corrected by lower authorities. I am conscious of the fact that return was processed by CPC, however, the ld. CIT(A) was not precluded from correcting such mistake, instead of taking hyper technical approach.