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Facts
The assessee, a co-operative society, filed a nil income tax return for AY 2023-24. During processing under Section 143(1) of the Income Tax Act, the CPC determined the total income at Rs. 93,53,130/-, by disallowing carry forward losses, depreciation, and ICDS. The assessee appealed, arguing entitlement to Section 80P deduction per CBDT Circular 37/2016, but the Ld. Addl./JCIT(A) dismissed the appeal.
Held
The Tribunal held that the assessee is fully entitled to the deduction under Section 80P of the Act for the amounts added by the CPC. Relying on numerous ITAT decisions and the Bombay High Court judgment in GemplusJewellery, the Tribunal concluded that deduction under Section 80P(2) of the Act must be granted on the assessed income.
Key Issues
Whether a co-operative society is entitled to a deduction under Section 80P of the Income Tax Act against additions made by the CPC during processing under Section 143(1), concerning items like carry forward losses, depreciation, and ICDS, in light of CBDT circulars and judicial precedents.
Sections Cited
143(1), 80P, 80P(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH:COCHIN
Before: SHRI INTURI RAMA RAO & SHRI PRAKASH CHAND YADAV
Date of Hearing : 29.05.2025 Date of Pronouncement : 23.06.2025 O R D E R PERPRAKASH CHAND YADAV, JUDICIAL MEMBER:
Present appeal of the assessee is arising from the order of ld. Addl/JCIT(A) dated 25.2.2025 having DIN & Order No.ITBA/APL/S/250/2024-25/1073671327(1) and relates to the AY 2023-24.
Brief facts of the case as coming out from the orders of authorities below are that the assessee is a co-operative society, filed its income tax return for the impugned year on 30.10.2023 declaring nil income. The return of income filed by the assessee was processed u/s 143(1) of the Income Tax Act,1961 (in short “The Act”) determining the total income of the assessee society at Rs.93,53,130/-.
GraminJanatha Welfare Co-operative Society Ltd., Thrisuur Page 2 of 3 3. Aggrieved with the order of CPC, assessee filed an appeal before the ld. Addl/JCIT(A) and inter-alia argued that while processing the return of income, the CPC has disallowed an amount of Rs.93,53,130/-, being carry forward losses, depreciation and ICDS. It is the contention of the assessee that since the assessee is entitled for the deduction u/s 80P of the Act, therefore, in terms of the circular of CBDT No.37/2016, the disallowance made would automatically eligible for the deduction u/s 80P of the Act. However, ld. CIT(A) dismissed the appeal of the assessee relying upon the judgement in the case of Goetz India Ltd. reported in 284 ITR 323 (SC).
Aggrieved with the order of ld. Addl/JCIT(A), assessee has come up in appeal before us.
Counsel for the assessee argued that in terms of circular of CBDT No.37/2016 dated 2.11.2016, assessee is entitled for the deduction u/s 80P of the Act in respect of adjustments made by the CPC while processing the return of income and hence no income would remain for taxability.
Ld. D.R. relied upon the orders of authorities below.
After considering the rival submissions, we are of the view that assessee is fully entitled for the deduction u/s 80P of the Act with respect to the amounts added by the CPC while processing the return of income. There are umpteen number of judgements of the coordinate benches of ITAT, wherein it has been held that in view of the judgement of Hon’ble Bombay High Court in the case of GemplusJewellery reported in 330 ITR 175 (Bom.), deduction u/s 80P(2) of the Act is to be granted on the assessed income and hence the assessee is entitled for deduction u/s 80P of the Act.
In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 23rd June, 2025
Sd/- Sd/- (Inturi Rama Rao) (Prakash Chand Yadav) Accountant Member JudicialMember Bangalore, Dated 23rd June, 2025. VG/SPS Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Cochin. 5 Guard file By order
Asst. Registrar, ITAT, Cochin.