M/S SUMER PARK BUILDING NO.1 CO.OP.HSG. SOC. LTD,MUMBAI vs. NATIONAL FACELESS APPEAL CENTRE, MUMBAI

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ITA 1132/MUM/2022Status: DisposedITAT Mumbai27 December 2022AY 2018-194 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted the contradictory treatment of the assessee's status by the CPC and the denial of deduction under Section 80P. It observed that the assessee is a registered Co-operative Housing Society and the deduction was denied on technical grounds.

What were the facts?

The assessee, a Co-operative Housing Society, claimed a deduction under Section 80P on interest earned from other Co-operative Societies. The CPC denied this deduction, processing the return under Section 143(1)(a) and treating the assessee as an AOP or Artificial Judicial Person.

What were the issues?

Whether the assessee, a Co-operative Housing Society, is eligible for deduction under Section 80P on interest earned from other Co-operative Societies, and whether the denial of this deduction on technical grounds was justified.

Which sections of the Income-tax Act were involved?

Section 80P,Section 143(1)(a),Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI SANDEEP SINGH KARHAIL & SHRI GAGAN GOYAL

Hearing: 12/10/2022Pronounced: 27/12/2022

ORDER PER GAGAN GOYAL, A.M: These two appeals by assessee are directed against the order of National Faceless Appeal Centre, Delhi [for short ‘NFAC’] under section 250 of the Income Tax Act, 1961 (for short ‘the Act’) vide common orders dated 13.04.2022 for Assessment Years (AY) 2018-19 & 2019-20 respectively. We shall first take up appeal of assessee for A.Y. 2018-19 as lead case. The assessee has raised the similar grounds of appeal

for both the AYs except variation of amounts in figure, which are as under:

1.

1. In denying the appellant a deduction u/s 80P(2)(d) of Rs. 24,91,090 in respect of interest earned from other Co-operative Societies notwithstanding the consistent view taken in this regard by the various Benches of the Hon'ble Mumbai ITAT.

2 & 1133/Mum/2022 M/s Sumer Park Building No. Co.Op. Hsg. Soc. Ltd.

2. In denying the relief by relying on various technical defects whereas we plea that a liberal view ought to have been taken in the matter as the deduction was not to be denied to the appellant on merits.

3. In taking record that the appellant is a Co-operative Housing Society operated solely for its members but then holding that no evidence of registration etc. was provided by the appellant. The NFAC had not sought this further information from the appellant in the various notices that were repeatedly served on the appellant whereas the name of the appellant itself clearly suggested that it was a co- operative housing society.

4.

In holding that the appellant’s plea was that the adjustment made could not have been made u/s 143(1) (a) and that this ground could not be adjudicated as the present appeal was u/s. 154.

5. In not appreciating that a similar deduction claimed for AY 20-21 had been allowed while processing the return.”

2.

Brief facts of the case are that assessee is a Co-operative housing society which is operating solely for the benefits of its members, filed its return of income on 16-07-2018 declaring Nil income after claiming deduction under section 80P amounting to Rs. 24,91,090/-.

3.

The return of income was processed under sec 143(1) (a) of the Act and deduction claimed under sec 80P was denied to the assessee and assessee was assessed as an AOP for AY 2018-19. It is pertinent to mention that we are dealing with appeal for AY 2019-20 also, the same action being taken in that year also and deduction was denied to the assessee on the ground that assessee being Artificial Judicial Person.

4. There is no dispute about the entitlement of deduction allowable to the assessee under section 80P. In one year, CPC Bangalore is denying deduction under section 80P despite the fact that they hold assessee as an AOP (AY-2018- 19), whereas the same deduction was disallowed in another year by holding assessee as an Artificial Judicial Person (AJP) (AY 2019-20). This fact is on record 3 & 1133/Mum/2022 M/s Sumer Park Building No. Co.Op. Hsg. Soc. Ltd. about processing of return by CPC, Bangalore itself is contradictory. It is clearly emerging out after study of both the intimations that CPC Bangalore is not allowing deduction u/s 80P to the assessee whether assessee claims status of AOP or AJP.

5.

We have carefully considered the intimation issued by the CPC Bangalore under sec 143(1), order of rectification under sec. 154 and order of Ld.CIT(A) u/s. 250 (NFAC), Delhi. In our observation following facts emerged out of the various orders mentioned supra relevant to the adjudication of the matter as under: I. As per PAN data base the status of the appellant is Artificial Judicial Person (AJP). II. For AY 2018-19 assessee claimed its status as BOI whereas in rectification order CPC Bangalore mentioned status as Artificial Judicial Person (AJP), for the same year CPC Bangalore treated as an AOP for the purposes of processing u/s 143(1). III. Assessee is a Co-operative housing society duly registered with the registrar housing society since 2005 (certificate submitted). IV. The denial of deduction to the assessee is not falling in any of the sub clause of section 143(1) (a). V. The same assessee on similar set of facts got deduction u/s 80P for AY 2020-21 (copy of intimation furnished).

6.

In view of the above-mentioned facts emerged out of the documents on record, it is apparently clear that CPC Bangalore itself was not sure about the status of the assessee. For the same reason assessee can’t be punished by disallowing deduction rightfully claimed. In view of above application filed by the assessee u/s 154 clearly falls in the category of mistake apparent from record.

7.

The findings of Ld. CIT (A) are baseless and failed to consider relevant facts based on records, hence not sustainable. In above terms we set aside the order of Ld.CIT(A) and direct CPC Bangalore to allow the claim of the assessee with

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