VAPI MARCHANT SAVING AND CREDIT CO-OP SOCIETY LIMITED ,VAPI vs. INCOME TAX OFFICER, WARD-9, VAPI, VAPI
Facts
The assessee, a cooperative society, failed to file its income tax return by the due date or within the extended period. Consequently, the Assessing Officer initiated reassessment proceedings. The assessee then filed a return of income, claiming a deduction of Rs. 14,61,780/- under section 80P(2)(a)(i) of the Income Tax Act, 1961.
Held
The Tribunal held that the assessee was not eligible for the deduction because the return of income was not filed within the prescribed time under section 139(1) of the Act. It was also noted that the interest income claimed for deduction was not solely from the business activity of extending credit facilities to its members. The reassessment proceedings are for the benefit of the revenue, and an assessee cannot convert them into a means to claim deductions not originally claimed.
Key Issues
Whether the assessee is eligible for deduction under section 80P(2)(a)(i) when the return of income was filed beyond the due date and whether the interest income was derived from the eligible business activity.
Sections Cited
80P(2)(a)(i), 139(1), 148, 80A(5), 147, 153A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SURAT BENCH “SMC” SURAT
Before: SHRI SANDEEP GOSAIN & SHRI OM PRAKASH KANT
IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH “SMC” SURAT
BEFORE SHRI SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER)
ITA No. 838/SRT/2023 Assessment Year: 2010-2011 Vapi Merchant Saving and Credit ITO Ward-9, Co-op Society Ltd., Income Tax Office, Nr. Vaishali Office No. 130, First Floor, Varun Vs. Char Rasta, NH-8, GIDC, Complex, Opp. Reliance Super Vapi-396191. Market GIDC, Vapi-396195. PAN NO. AAAAV 3925 E Appellant Respondent
: Mr. Hem Chhajed, AR Assessee by : Mr. J.K. Chandnani, Sr. DR Revenue by
: 09/10/2025 Date of Hearing Date of pronouncement : 30/10/2025
ORDER PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 30/09/2023, passed by the learned commissioner of Income- tax(appeals)-National Faceless Appeal Centre, Delhi [in short the Ld. CIT(A)] for assessment year 2010-11, raising following grounds:
The order passed by the Ld. CIT (A) is against law, equity & justice.
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The Ld. CIT(A) has erred in law and on facts in upholding The Ld. CIT(A) has erred in law and on facts in upholding The Ld. CIT(A) has erred in law and on facts in upholding rejection of decution claimed by appellant U/S 8OP of the rejection of decution claimed by appellant U/S 8OP of the rejection of decution claimed by appellant U/S 8OP of the Act. 3. The Ld. CIT(A) has erred in law and on facts by not allowing The Ld. CIT(A) has erred in law and on facts by not allowing The Ld. CIT(A) has erred in law and on facts by not allowing deduction of Rs. 14,61,780/- claimed claimed U/S U/S 80P(2)(a)(i) 80P(2)(a)(i) of the Act. 2. Briefly stated facts of the case that the assessee a cooperative stated facts of the case that the assessee a cooperative stated facts of the case that the assessee a cooperative society, did not file its regular return of income for the year under society, did not file its regular return of income for the year under society, did not file its regular return of income for the year under consideration before the due date prescribed under section 139(1 the due date prescribed under section 139(1) of the Income-tax Act, 1961 ( tax Act, 1961 (in short ‘the Act’). The assessee also did ). The assessee also did not file the return of income within the extended period available not file the return of income within the extended period available not file the return of income within the extended period available within the provision of section 139 of the act. within the provision of section 139 of the act.
2.1 Subsequently, the Subsequently, the Assessing Officer recorded reasons to Assessing Officer recorded reasons to believe that income escaped assessment and issued notice under believe that income escaped assessment and issued notice under believe that income escaped assessment and issued notice under section 148 of the act, on 31/03/2017. In response, the assessee section 148 of the act, on 31/03/2017. In response section 148 of the act, on 31/03/2017. In response filed return of income for the first time declaring Nil income after return of income for the first time declaring Nil income after return of income for the first time declaring Nil income after claiming deduction of claiming deduction of ₹14,61,780/- under section 80P(2)(a)(i) under section 80P(2)(a)(i) of the Act. The bifurcations of interest income reported by the assessee in The bifurcations of interest income reported by the assessee in The bifurcations of interest income reported by the assessee in the return of income is reproduced as under: the return of income is reproduced as under:
Sr. No. Particulars Interest Income Interest Income 1. Interest income from bank F.Ds Interest income from bank F.Ds Rs.3,25,542/ Rs.3,25,542/- 2. Inter Interest income from bank saving Rs.29,443/ Rs.29,443/- accounts accounts 3. Interest received from members Interest received from members Rs.25,25,308/ Rs.25,25,308/- 2.2 During During During reassessment reassessment reassessment proceeding, the Assessing proceeding, the Assessing proceeding, the Assessing Officer Officer Officer brought to the knowledge of the assessee that in view of provision of brought to the knowledge of the assessee that in view of prov brought to the knowledge of the assessee that in view of prov section 80A(5) of the A section 80A(5) of the Act, the assessee was not eligible for the ct, the assessee was not eligible for the deduction otherwise than by return of income filed under the due deduction otherwise than by return of income filed under the due deduction otherwise than by return of income filed under the due
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date prescribed under section 139(1) of the A ed under section 139(1) of the Act. But the learned ct. But the learned counsel for the assessee submitted that counsel for the assessee submitted that while claiming deduction claiming deduction under section 80P(2)(a)(i) under section 80P(2)(a)(i) of the Act, there was no requirement of no requirement of filing return under section 139 (1) of the A n under section 139 (1) of the Act once the two ct once the two conditions are fulfilled, conditions are fulfilled, firstly, credit cooperative society is , credit cooperative society is established for credit credit facility to its members and secondly all the bers and secondly all the members are shareholders of the society shareholders of the society. The Assessing Officer . The Assessing Officer rejected the contention of the assessee and refer rejected the contention of the assessee and refered to the decision of to the decision of the Hon’ble Supreme Court in the case of Sun Engineering Works P the Hon’ble Supreme Court in the case of Sun Engineering Works P the Hon’ble Supreme Court in the case of Sun Engineering Works P Ltd (1992) 198 ITR 297 ,320(SC) Ltd (1992) 198 ITR 297 ,320(SC) wherein it is held that proceeding wherein it is held that proceeding under section 147 are for the benefit of the R 147 are for the benefit of the Revenue and not for the evenue and not for the assessee. The Assessing Officer rejected claim of the assessee on assessee. The Assessing Officer rejected claim of the assessee on assessee. The Assessing Officer rejected claim of the assessee on the merit relying on the decision of Hon’ble the merit relying on the decision of Hon’ble Gujarat Gujarat High Court dated 25/04/2016 in t dated 25/04/2016 in the case of state bank of India in ITA 486 of bank of India in ITA 486 of 2015 and 47 of 2015, wherein it is held that in case of a society 2015 and 47 of 2015, wherein it is held that in case of a society 2015 and 47 of 2015, wherein it is held that in case of a society engaged in providing credit facility to its members, it is the interest engaged in providing credit facility to its members, it is the interest engaged in providing credit facility to its members, it is the interest income derived from credit provided to its members, which is income derived from credit provided to its members, which is income derived from credit provided to its members, which is deductible under section 80P(2)(a)(i) of the A er section 80P(2)(a)(i) of the Act and interest derived ct and interest derived by depositing surplus funds by depositing surplus funds to a bank is not attributable to bank is not attributable to business income and cannot be claimed deduction under section business income and cannot be claimed deduction under section business income and cannot be claimed deduction under section 80P(2)(a)(i) of the act. 80P(2)(a)(i) of the act.
On further appeal, the Ld. CIT(A) also upheld On further appeal, the Ld. CIT(A) also upheld the finding of the the finding of the learned Assessing Officer. Aggrieved, the assessee is in appeal learned Assessing Officer. Aggrieved, the assessee is learned Assessing Officer. Aggrieved, the assessee is before the Tribunal by way of raising grounds ribunal by way of raising grounds as reproduced above. s reproduced above.
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Before us learned counsel for the assessee referred to delay in Before us learned counsel for the assessee referred to delay in Before us learned counsel for the assessee referred to delay in filing the appeal. The learned counsel filing the appeal. The learned counsel referred to the affidavit filed referred to the affidavit filed on behalf of the society and submitted that delay of five days was on behalf of the society and submitted that delay of five days on behalf of the society and submitted that delay of five days due to non service of the order and the assessee came to know from due to non service of the order and the assessee came to know from due to non service of the order and the assessee came to know from the Income-tax portal portal, only in thereafter immediately appeal was only in thereafter immediately appeal was filed.
4.1 In view of the explanation filed by the assessee for the delay e explanation filed by the assessee for the delay e explanation filed by the assessee for the delay supported by way of an affidavit, we are of the opinion that assessee supported by way of an affidavit, we are of the opinion that assessee supported by way of an affidavit, we are of the opinion that assessee was prevented by sufficient cause for delayed filing of the appeal, was prevented by sufficient cause for delayed filing of the appeal, was prevented by sufficient cause for delayed filing of the appeal, accordingly we condone the delay and admit the appeal for accordingly we condone the delay and admit the appeal for accordingly we condone the delay and admit the appeal for adjudication.
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material record. The sole issue in dispute is whether the relevant material record. The sole issue in dispute relevant material record. The sole issue in dispute assessee is eligible for deduction of the claim made for the first time for deduction of the claim made for the first time for deduction of the claim made for the first time in the return of income filed in response to n in the return of income filed in response to notice under section 148 ice under section 148 of the Act. The Assessing Officer has denied the claim in ct. The Assessing Officer has denied the claim in view of ct. The Assessing Officer has denied the claim in section 80A(5) of the A section 80A(5) of the Act and decision of the Hon’ble Supreme Court e Supreme Court in the case of Sun engineering Private Limited(supra). un engineering Private Limited(supra). un engineering Private Limited(supra).
5.1 In this regard, we may like to refer to the decision of the In this regard, we may like to refer to the decision of the In this regard, we may like to refer to the decision of the Hon’ble Supreme court in Sun Engineering p Ltd (supra), where Supreme court in Sun Engineering p Ltd (supra), where Supreme court in Sun Engineering p Ltd (supra), where Hon’ble Supreme Court held Hon’ble Supreme Court held that Keeping in view the object and Keeping in view the object and purpose of the proceedings under section 147 which are for the purpose of the proceedings under section 147 which are for the purpose of the proceedings under section 147 which are for the benefit of the revenue and not an assessee, an assessee cannot be it of the revenue and not an assessee, an assessee cannot be it of the revenue and not an assessee, an assessee cannot be
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permitted to convert the reassessment proceedings as his appeal or permitted to convert the reassessment proceedings as his appeal or permitted to convert the reassessment proceedings as his appeal or revision, in disguise, and seek relief in respect of items earlier revision, in disguise, and seek relief in respect of items earlier revision, in disguise, and seek relief in respect of items earlier rejected or claim relief in respect of items not claimed in the original rejected or claim relief in respect of items not claimed in t rejected or claim relief in respect of items not claimed in t assessment proceedings, unless relatable to ‘escaped income’, and assessment proceedings, unless relatable to ‘escaped income’, and assessment proceedings, unless relatable to ‘escaped income’, and reagitate the concluded matters. Even in cases where the claims of reagitate the concluded matters. Even in cases where the claims of reagitate the concluded matters. Even in cases where the claims of the assessee during the course of reassessment proceedings related the assessee during the course of reassessment proceedings related the assessee during the course of reassessment proceedings related to the escaped assessment are accepted, stil to the escaped assessment are accepted, still the allowance of such l the allowance of such claims has to be limited to the extent to which they reduce the income claims has to be limited to the extent to which they reduce the income claims has to be limited to the extent to which they reduce the income to to to that that that originally originally originally assessed. assessed. assessed. The The The income income income for for for purposes purposes purposes of of of ‘reassessment’ cannot be reduced beyond the income originally ‘reassessment’ cannot be reduced beyond the income originally ‘reassessment’ cannot be reduced beyond the income originally assessed.
5.2 In the instant case before u In the instant case before us, the assessee even did not file its s, the assessee even did not file its regular return of income for the year under consideration either in regular return of income for the year under consideration either in regular return of income for the year under consideration either in the due date prescrib the due date prescribed under section 139(1) of the A ed under section 139(1) of the Act or even belatedly. The deduction under the provisions of t The deduction under the provisions of the Act is to be The deduction under the provisions of t allowed subject to fulfilling the conditions prescribed in ulfilling the conditions prescribed in the relevant ulfilling the conditions prescribed in provisions of the Act and the assessee ct and the assessee cannot assume that assume that return of income was not filed because in view of was not filed because in view of deduction available deduction available total income would be below threshold income would be below threshold income, although total income of although total income of the assessee is more than the prescribed minimum income limit for the assessee is more than the prescribed minimum income limit for the assessee is more than the prescribed minimum income limit for tax without deduction without deduction. The assessee filed return of in return of income and claimed deduction only claimed deduction only, when the revenue noticed non , when the revenue noticed non-filing of return of income leading to escapement return of income leading to escapement of income. In such a of income. In such a situation, it may be presumed that , it may be presumed that the assessee was totally the assessee was totally neither
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aware nor interested for claiming the deduction provided under aware nor interested for claiming the deduction provided aware nor interested for claiming the deduction provided chapter VI of the A chapter VI of the Act. Further, the section 80A(5) of the A her, the section 80A(5) of the Act specifically restrict the eligibility of specifically restrict the eligibility of claim of ded claim of deduction under chapter VI of the A chapter VI of the Act in the return filed within the time period ct in the return filed within the time period prescribed under section 139(1) of the A ed under section 139(1) of the Act.
5.3 The Hon’ble Rajasthan High court in the case of Jai Steel The Hon’ble Rajasthan High court in the case of Jai Steel The Hon’ble Rajasthan High court in the case of Jai Steel India) Income-tax Appeal No. 53/A2011 tax Appeal No. 53/A2011 held that it is not held that it is not open for the assessee to seek deduction or claim expenditure which has not the assessee to seek deduction or claim expenditure which has not the assessee to seek deduction or claim expenditure which has not been claimed in the original assessment, which assessment already been claimed in the original assessment, which assessment already been claimed in the original assessment, which assessment already stands completed, only because a assessment under Section stands completed, only because a assessment under stands completed, only because a assessment under 153A of the Act in pursuance of search or requisition is required to of the Act in pursuance of search or requisition is required to of the Act in pursuance of search or requisition is required to be made.
5.4 As far as the issue raised in the merit is concerned, the As far as the issue raised in the merit is concerned, the As far as the issue raised in the merit is concerned, the assessee failed to substantiate that the interest income was earned assessee failed to substantiate that the interest income was earned assessee failed to substantiate that the interest income was earned from its business activity of extending credit fa from its business activity of extending credit facility to its members cility to its members which is one of the condition provided under section 80P(2)(a) of the which is one of the condition provided under section 80P(2)(a) of the which is one of the condition provided under section 80P(2)(a) of the Act.
5.5 Since the lower authorities have decided the issue keeping in Since the lower authorities have decided the issue keeping in Since the lower authorities have decided the issue keeping in view binding precedent on the issue in dispute, we do not find any view binding precedent on the issue in dispute, we do not find any view binding precedent on the issue in dispute, we do not find any error in the order of the error in the order of the Ld. CIT(A). The grounds of appeal of the Ld. CIT(A). The grounds of appeal of the assessee accordingly dismissed. assessee accordingly dismissed.
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In the result, the appeal filed by the assessee is dismissed. In the result, the appeal filed by the assessee is dismissed. In the result, the appeal filed by the assessee is dismissed.
Order pronounced by way display o Order pronounced by way display of result on notice board f result on notice board on 30/10/2025 under Rule 34(4) of ITAT Rules, 1963. /10/2025 under Rule 34(4) of ITAT Rules, 1963. /10/2025 under Rule 34(4) of ITAT Rules, 1963.
Sd/- - Sd/ Sd/- (SANDEEP GOSAIN (SANDEEP GOSAIN) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Surat; Dated: 30/10/2025 Rahul Sharma, Sr. P.S. (on Tour) Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Surat 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Surat ITAT, Surat
