NEW SHANGRILLA COOPERATIVE HOUSING SOCIETY LTD,COLABA S.O, MUMBAI vs. CPC ITO 25(3)(1), MUMBAI, KAUTILYA BHAVAN, MUMBAI

At the outset, ld. Counsel for the assessee submitted that in so far as A.Y.2014-15 is concerned, there is a delay in filing of appeal for 8 years before the First Appellate Authority where as similar delay for the A.Y.2015-16 has been condoned by the ld. CIT(A). Ld. Counsel submitted here in this case that ld. AO has made primafacie adjustment u/s.143(1). In both the years disallowance of interest of Rs.16,550/- in A.Y.2014-15 and Rs.4,49,697/- in the A.Y.2015-16 has been made. He submitted that, against such primafacie adjustment, assessee has filed petition for rectification u/s.154, however, the same was not disposed of by the CPC and therefore, assessee was under bonafide belief that adjustment would be rectified. It was further submitted that assessee was very belatedly advised that since rectification application has not been disposed of and therefore, the appeal should be filed when assessee society approached a different Counsel. Thus, he submitted that appeal shuld have been condoned because primafacie on merits itself, no adjustment was called for. We find that since the assessee was under a bonafide belief that it has filed rectification apploication therefore there os no requirement to file the appeal. Assessee benig Cooperative Housing Society and managent committee keeps on changing, therfore it was advise belateledly that since rectification order has not been passed then appeal should have

On merits, after hearing both the parties and on perusal of the impugned order and the material placed on record we find that CPC has made adjustment for disallowance of interest claimed u/s.80P despite the fact that no such primafacie adjustment could have been made for disallowing the deduction u/s.80P within the scope and ambit of Section 143(1)(a) in the A.Y.2014-15 and 2015-16. The primafacie adjustment as provided in Section 143(1)(a) Clause v was with respect to deductions claimed u/s.10AA, 80IA, 80IAB, 80IB, 80IC, 80ID or Section 80IE. The amendment was brought by the Finance Act 2021 w.e.f. A.Y.2021-22 to include disallowance of deduction claimed under Chapter VIA. Thus, prior to A.Y.2021-22, no adjustment could have been made for disallowing the claim u/s.80P. Thus, at the threshold, the adjustment itself was bad in law. Moreover, the CPC has proceed on the ground that return of income has been filed beyond the due date of Section 139(1) which is not correct because since assessee is a co-operative housing society governed by Maharashtra Co-operative Society’s Act 1960, it is mandatorily required to get its account audited. The due date for filing of return of income in the case of audited accounts was on 31/10/2014 and 31/10/2015. Thus, on this ground also, the CPC was not justified disallowing the claim of deduction. Accordingly, adjustment made u/s.143(1) is deleted.