SHRI HUMAD JAIN SAKH SAHAKARI SANSTHA MARYADIT,INDORE vs. ITO 2(1), INDORE

ITA 547/IND/2024Status: DisposedITAT Indore22 July 2025AY 2012-1330 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the AO initiated reassessment proceedings under Section 147 based on cash deposits but ultimately denied the deduction claimed by the assessee under Section 80P without making any addition on the original issue of cash deposits. The Tribunal, following the decision of the Hon'ble Bombay High Court in CIT vs. Jet Airways (I) Ltd., held that when the AO initiates proceedings under Section 147 on one issue but makes an assessment on a different issue, and when there are conflicting decisions from non-jurisdictional High Courts, the view favourable to the assessee should be adopted. The Tribunal applied the principle laid down in CIT vs. Vegetable Products Ltd. (SC) that if two reasonable constructions are possible, the one favouring the assessee must be adopted. Therefore, the Tribunal found the AO's order denying the deduction under Section 80P to be bad and illegal. The AO was directed to allow the deduction as claimed by the assessee. Grounds 1 and 2 were allowed. Ground 3 was not adjudicated as Grounds 1 and 2 were allowed.

What were the facts?

The assessee, Shri Humad Jain Sakh Sahakari Sanstha Maryadit, is a credit co-operative society. For Assessment Year 2012-13, the assessee did not file a return. The Assessing Officer (AO), based on information of cash deposits of Rs. 11,12,725/-, initiated reassessment proceedings under Section 147. The assessee subsequently filed a return declaring 'Nil' income after claiming a deduction of Rs. 5,13,800/- under Section 80P. The AO denied this deduction, assessing the total income at Rs. 5,13,800/-. The Commissioner of Income-Tax (Appeals) upheld the AO's order. The assessee is now appealing to the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the assessment order passed by the AO is bad in law, void ab initio, barred by limitation, illegal, and contrary to the facts and circumstances of the case, liable to be annulled, in terms of Section 147 read with Explanation 3 of the Income-tax Act, 1961, when the AO initiated proceedings based on cash deposits but ultimately made an addition by denying deduction under Section 80P. Assessee's contention: The AO initiated proceedings under Section 147 for cash deposits but made an addition on a new issue (denial of Section 80P deduction) without making any addition on the original issue. This is not legal as per Section 147 read with Explanation 3. Relied on CIT vs. Jet Airways (I) Ltd. (Bombay High Court). Revenue's contention: Relied on DCIT vs. Toor Finance Company Limited (Gauhati High Court), which did not agree with the interpretation of Section 147 read with Explanation 3 taken in Jet Airways Ltd. and upheld the AO's order. 2. Whether the CIT(A) was justified in confirming the order which is bad in law, void ab initio, barred by limitation, illegal, and contrary to the facts and circumstances of the case, liable to be annulled. 3. Whether the CIT(A) was justified in confirming the disallowance of Rs. 5,13,800/- claimed under Section 80P.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(3),Section 80P,Section 260A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI

For Appellant: Shri Ashish Goyal & N.D. Patwa, ARs
For Respondent: Shri Ashish Porwal, Sr. DR
Hearing: 03.07.2025Pronounced: 22.07.2025

Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first appeal dated 05.06.2024 passed by learned Commissioner of Income-Tax (Appeals)-AddI/JCIT(A)-2, Mumbai [“CIT(A)”] which in turn arises out of assessment-order dated 22.11.2019 passed by learned ITO-2(1), Indore [“AO”] u/s 143(3) r.w.s. 147 of Income- tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2012-13, the assessee

has filed this appeal.

Shri Humad Jain Sakh Sahakari Sanstha Maryadit ITA No. 547/Ind/2024 - AY 2012-13

2.

The background facts leading to present appeal are such that the assessee is a credit co-operative society. For AY 2012-13 under consideration, the assessee did not f

The order continues below.

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