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Facts
The assessee, a Cooperative Housing Society, claimed deduction under Section 80P(2)(d) for interest earned from cooperative banks. The Assessing Officer disallowed this deduction, treating the cooperative bank as an urban commercial bank not covered by the section. The CIT(A) dismissed the assessee's appeal due to a delay. The assessee then appealed to the Tribunal.
Held
The Tribunal noted that the CIT(A) passed an ex-parte order and the Assessing Officer did not verify the interest income. To meet the ends of justice, the Tribunal condoned the delay, set aside the CIT(A)'s order, and remitted the issues back to the Assessing Officer for fresh adjudication on merits. The assessee was to be given adequate opportunity of hearing.
Key Issues
Whether interest earned from cooperative banks is deductible under Section 80P(2)(d) of the Income Tax Act, and whether the CIT(A)'s ex-parte order dismissing the appeal for delay was justified.
Sections Cited
80P(2)(d), 250, 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “J” BENCH MUMBAI
Before: SHRI BR BASKARAN & SHRI PAVAN KUMAR GADALE
आदेश / ORDER
PER PAVAN KUMAR GADALE - JM:
The appeal is filed by the assessee against the order of the Joint Commissioner of Income Tax (Appeals)/J CIT(A) – 3, Delhi passed U/sec 250 of the Act. The assessee has raised the following grounds of appeal:
1. On the facts and circumstances of the case and in law, the lower authorities have erred in disallowing deduction claimed u/s. 80P(2)(d) of Income Tax Act 1961, (the whole of Interest earned from Cooperative Bank) against the Interest earned from 2 ITA.No.4093/Mum/2024. Ahimsa Tower Co Op Housing Society Ltd., Mumbai
Cooperative Bank by the Cooperative Housing Society Rs. 3,73,747/-
On the facts and circumstances of the case and in law, the lower authorities erred in disallowing claim of deduction of interest earned from the co-operative society though the said adjustment is not covered within the purview of sub-clause (i) to (vi) of clause (a) of section 143(1).
The appellant craves leave to add, to alter, modify or withdraw any of the above grounds of appeal before or at the time of hearing.
2. The Brief facts of the case are that, the assessee is a Cooperative Housing Society registered under Maharashtra Co-operative Societies Act 1960. The assessee has filed the return of income for the A.Y 2021-2022 on 31.12.2021 disclosing a total income of Rs. 52,880/- after claiming deduction u/sec 80P(2)(d) of the Act of Rs. 3,73,747/ on the interest on fixed deposits with the Cooperative Banks. Subsequently the return of income was processed u/sec 143(1) of the Act. Whereas the AO/CPC has not allowed deduction of claim u/s 80P(2)(d) of the Act as the cooperative bank is an urban commercial bank and does not fall under the purview of cooperative society referred in the Sec. 80P(2)(d) of the Act and therefore the interest income from cooperative banks is taxed under income from other sources and assessed the total income of Rs.4,26,630/-and passed the order u/sec 143(1) of the Act dated 19.10.2022.
3 ITA.No.4093/Mum/2024. Ahimsa Tower Co Op Housing Society Ltd., Mumbai
3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the A.O and issued notices for hearing but there was no response from the assessee. Further, the CIT(A) found that there is a delay in filing the appeal and the delay was not properly explained and the CIT(A) has dismissed the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal with the Hon’ble Tribunal.
4. At the time of hearing, none appeared on behalf of the assesse. The Ld. DR relied on the order of the CIT(A).
5. We heard the Ld.DR submissions and perused the material on record. The sole matrix of the disputed issue is in respect of denial of deduction u/s 80P(2)(d) of the Act to the Cooperative Society. We find the CIT(A) has passed an ex- parte order and the Assessing Officer could not verify the interest income received from the cooperative banks. Accordingly, to meet the ends of justice, we condone the delay in filling the appeal by the assesse before the CIT(A) considering information referred at page 2 of the CIT(A) order and we set aside the order of the CIT(A) and remit the entire disputed issues to the file of the Assessing Officer to adjudicate afresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate
4 ITA.No.4093/Mum/2024. Ahimsa Tower Co Op Housing Society Ltd., Mumbai in submitting the information. And we allow the grounds of appeal of the assessee for statistical purposes.
In the result, the appeal filed by the appeal is allowed for statistical purposes.
Order pronounced in the open court on 27.09.2024.
Sd/- Sd/- (BR BASKARAN) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 27/09/2024 KRK, PS आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. संबंिधत आयकर आयु� / The CIT(A) 3. 4. आयकर आयु�(अपील) / Concerned CIT िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, मु�बई / DR, ITAT, Mumbai 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�ािपत �ित //True Copy// 1. उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपीलीय अिधकरण, मु�बई मु�बई / ITAT, Mumbai मु�बई मु�बई
5 ITA.No.4093/Mum/2024. Ahimsa Tower Co Op Housing Society Ltd., Mumbai
Date 1. Draft dictated on 26.09.2024 2. Draft placed before author 27.09.2024 3. Draft proposed & placed before the second member 4. Draft discussed/approved by Second Member. 5. Approved Draft comes to the Sr.PS/PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk 10. Date of dispatch of Order. 11. Dictation Pad is enclosed