MASINAN SAMABAY KRISHI UNNAYAN SAMITY,HOOGHLY vs. I.T.O., WARD - 23(1), HOOGHLY, HOOGHLY

Brief facts of the case are that the assessee is a Primary Agricultural Credit Cooperative Society registered under West Bengal Cooperative Society Act. The main activities of the PACS appellant-assessee are purchase and sale of agricultural implement, rural banking and providing credit facilities to its member, who are basically the farmers in rural location are dependent majority on the PACS appellant-assessee for their banking and agricultural development activity. The profit from the above activity of Rs.19,15,024/- for the assessment year 2018-19 from purchase and sale of agricultural implement and rural banking and providing credit facilities are subject to 100% deduction under section 80P of the Act. Therefore, its total income was ‘NIL’. At the time of filing of the return, the deduction of Rs.19,15,024/- inadvertently taken under section 80P(2)(C)(1) of the Act and CPC has been processed the return and disallowed Rs.18,15,024/- and charged tax of Rs.6,69,570/-. Thereafter the assessee filed rectification petition under section 154 of the Act. However, the rectification petition filed by the assessee was dismissed by the ld. Assessing Officer. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).

After considering the submissions of the assessee, the ld. CIT(Appeals) dismissed the appeal filed by the assessee saying that “it is seen from the Form 35 that the appellant has challenged the disallowance of Rs.18,15,024/- on account of deduction inadvertently claimed under section 80P(2)(c)(i) instead of 80P(2)(a)(i) and 80P(2)(a)(iv) which do not come in preview of the mistake apparent from record. The AO, CPC has made the adjustment on the (A.Y. 2018-2019) Masinan Samabay Krishi Unnayan Samity Ltd. basis of return filed by the appellant and information available in the return of income. Hence this ground is not considerable”.

I have heard both the sides. The only grievance of the assessee is that the ld. Addl./JCIT(Appeals) has not considered the case on merit, but he dismissed the assessee’s appeal saying that the scope of rectification is limited to correct the errors of facts or error of law on the basis of material available on record and also the assessee has claimed deduction under section 80P(2)(a)(i) instead of 80P(2)(a)(iv). Therefore, the CPC made the adjustment on the basis of return filed by the assessee. Hence, it cannot be rectified under section 154 of the Act. On this aspect, I am of the view that claiming deduction under wrong provision is not a ground to disallow the claim when the assessee is eligible for deduction under other provision of law.