STERLING COURT F WING CO OP HOUSING SOCIETY LIMITED ,MUMBAI vs. INCOME TAX OFFICER WARD 31(2)(1), MUMBAI

The brief facts of the case are that, the assessee has filed its return of income for the AY 2012-13 on 27.09.2012, declaring a total income at Rs. 89,650/- after claiming deduction under Chapter-VIA as per provisions of section 80P(2)(d) of the Act. The return of assessee was processed under section 143(1) on 27.02.2013, disallowing the claim of deduction under section 80P(2)(d) for Rs. 2,66,556/-. Being aggrieved with such disallowance, assessee preferred to file an application for rectification under section 154 of the Act before the Jurisdictional AO (JAO), but JAO rejected the request of assessee

Aggrieved with the aforesaid rectification order, assessee preferred an appeal before the ld. CIT(A), who also had dismissed the appeal of assessee with the observations that the return filed by the assessee was beyond the stipulated date of filing of return of income under section 139(1), therefore as per the prevailing jurisdictional interpretation of section 80A(5) r.w.s. 139(1) of the Act, any deduction claimed under Chapter-VIA which includes section 80P also is not admissible unless the return of income is filed on or before the due date specified under section 139(1) of the Act. The ld. CIT(A) also mentioned that the interest income received by the assessee from Saraswat Co-operative Bank which has RBI Licence for carrying out banking services, cannot be held to be a Co-operative Society within the meaning of section 80P(2)(d) of the act, accordingly, the case of assessee falls within the purview of section 80AC of the Act, the assessee therefore is not eligible for deduction under section 80P of the Act.

In view of the dismissal of appeal by the ld. CIT(A), assessee preferred an appeal before the ITAT, in the present matter.

Before us ld. Counsel (AR) of the assessee submitted that the decision given by the ld. CIT(A) was not in accordance with the mandate of law, as the ITA Nos. 7121, 7120 & 7122/Mum/2025 Sterling Court F Wing Co-op. Housing Society Ltd. issue is already decided by ITAT, Mumbai in the case of Sterling Court E Wing Co-op Housing Society Ltd. Vs ITO in ITA Nos. 72 to 75/M/2024 AY 2012-13 to AY 2015-16 vide order dated 28.06.2024, wherein the ITAT has held that the disallowance of deduction under Chapter-VIA can be made under section 143(1)(a)(v) of the Act, only on account of non-furnishing of return of income within the due date of filing of the return and the condition does not apply for deduction u/s 80P even prior to 01.04.2021.

Ld AR further placed his reliance on the CBDT’s Circular No. 13/2023 dated 26.07.2023, according to which the pre-condition of filing of return on or before the due date specified under section 139(1) is applicable for the period commencing from 1st day of April 2006 but before 1st April 2018 on deductions admissible u/s 80IA, 80IB, 80IAB, 80IB, 80IC, 80ID or 80IE only and thereafter from 1st April 2018 the precondition to file the return before specified date u/s 139(1) would apply to all the deductions under chapter VIA, heading “C-Deductions in respect of certain incomes”. It is further clarified in the said Circular that for AYs 2018-19 to 2022-23, the Chief Commissioner of Income Tax and Director General of Income Tax are directed to admit all pending as well as new application for condonation of delay in furnishing of return of income claiming deduction under section 80P of the Act, subject to certain enquiries. It was the submission, that the case of assessee pertains to AY 2012- 13, 2013-14 and 2014-15, which falls in the category, where the requirement of 5

Per contra, ld. Sr. DR representing the revenue reiterated the finding AO as well as Ld. CIT(A) and submitted that the Saraswat Co-operative Bank from whom the assessee has received interest income is holding a licence from RBI for carrying out the banking services, the same does not fall within the definition of Co-operative Society as per provisions of section 80P, therefore even if the requirement of filing of return before the date prescribed under section 139(1) is not required in present case, the assessee would not be eligible for claim of deduction under section 80P(2)(d), being the interest received from an entity which is not a Co-operative Society. The order of Ld. CIT(A) therefore was justified in denying the deduction u/s 80P to the assessee.

In rebuttal to the aforesaid contention by ld. Sr. DR, ld. AR placed before us a decision from the ITAT, SMC Bench, Mumbai in ITA No. 5769/Mum/2025 dated 27.11.2025 in the case of Shree Raj Crystal Co-op. Housing Society Ltd. Vs. ADIT, CPC, Bangaluru, wherein the claim of deduction under section 80P, on the interest income earned from Saraswat Co- 6

On a thoughtful consideration of the aforesaid facts and circumstances and the case law relied upon by the assessee, we find substance in the contentions raised by ld. AR that:

In light of aforesaid facts, circumstances and observations, respectfully following the Jurisprudence referred to supra, we are of the considered view that the disallowance of exemption claimed under section 80P(2)(d) in processing of return under section 143(1) of the Act and thereafter rejection of rectification under section 154 was not in accordance with the settled principle of law. The assessee herein is entitled for the claim of deduction under section 80P(2)(d) of the Act on receipt of interest income from Saraswat Co-operative Bank, the findings of ld. CIT(A) therefore are liable to be set-aside. We, thus, direct the AO to allow the claim deduction u/s 80P(2)(d) to the assessee, as discussed hereinabove.

In result, appeal of assessee in ITA No. 7121/M/2025 for AY 2012-13 stands allowed.

In combined result, all the three appeals of assessee are allowed in terms of our aforesaid observations.