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Facts
The assessee, a cooperative society, claimed a deduction of Rs. 22,92,105/- under Section 80P(2)(d) of the Income Tax Act for AY 2018-19. This claim was disallowed by the CPC in its order under Section 143(1) and subsequently, a rectification application under Section 154 was also rejected. The CIT(A) upheld the CPC's decision.
Held
The Tribunal noted that the assessee had indeed claimed the deduction under Section 80P in its filed return of income, specifically in Schedule VIA. The Tribunal found that the CPC's action in disallowing the deduction was not justified and directed the AO to allow the claim after verification.
Key Issues
Whether the disallowance of deduction claimed under Section 80P(2)(d) by the CPC was justified, despite the assessee having claimed it in their return.
Sections Cited
80P(2)(d), 143(1), 154, VIA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
O R D E R Per Amarjit Singh (AM): This appeal filed by the assessee is directed against the order passed by the ld. CIT(A) NFAC, dated 11.07.2023 for A.Y. 2018-19. The assessee has raised the following grounds before us: “1. The learned CTT(A) [NFAC, Delhi] erred on facts and in law in disallowing Rs.22,92,110/-claimed as deduction under s 80P(2)(d) of the Act
2. The learned CIT(A) [NFAC, Delhi] erred on facts and in law in confirming the order passed under s 154 of the Act by holding that there was no mistake apparent from the records
3. The learned CIT(A) (NFAC, Delhi) erred on facts and in law in confirming the view of the CPC that the appellant did not correctly fill in Sch-VIA for claiming deduction under s 80P. Relief claimed: The appellant be allowed deduction of Rs.22,92,110/- under s 80P(2)(d) of the Act.
P a g e | Kohinoor Industrial Premises Coop Society Ltd. vs. AO, Ward 31(2)(2)
The appellant craves leave to add to, alter, amend or modify the ground(s) of appeal.”
Fact in brief is that the assessee is a cooperative society derived income from house property and income from other sources during the year under consideration. The assessee has filed return of income on 07.09.2018 declaring total income of Rs.25,54,640/-. The assessee cooperative society has also derived income by way of interest earned on deposit maintained with the cooperative bank, therefore, the assessee has claimed deduction u/s 80P(2)(d) of the Act to the amount of Rs.22,92,105/-. The CPC has not allowed the deduction as per order u/s 143(1) of the Act dated 31.05.2019 and assessed the total income at Rs.48,46,750/-. Therefore, assessee has filed rectification u/s 154 of the Act, however, the CPC Vide order dated u/s 154 of the Act dated 06.01.2020 has rejected the rectification application filed by the assessee stating that in the e-filed return of income the assesse has not correctly filed schedule VIA for claiming deduction u/s 80P of the Act.
The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee reiterating the facts as above reported by the CPC.
During the course of appellate proceedings before us the ld. Counsel filed paper book comprising copy of return filed and submitted that in the return of income filed, the assessee has claimed deduction u/s 80P of the Act. He also referred page no. 50 of the return of income showing that under schedule VIA the assessee has claimed he deduction of Rs.22,92,105/- as per section 80P of the Act wherein assessee has claimed deduction u/s 80P to the amount of Rs.22,92,105/-.
P a g e | Kohinoor Industrial Premises Coop Society Ltd. vs. AO, Ward 31(2)(2) The ld. D.R could not controvert this fact the assessee has claimed the claim of deduction u/s 80P in the return of income filed by the assessee.
Heard both the sides and perused the material on record. The assessee is a cooperative society and derived income by way of interest on deposit maintained with cooperative bank and claimed deduction u/s 80P(2)(d) on the interest amount of Rs.22,92,105/-. The CPC u/s 143(1) of the Act disallowed the claim of deduction made u/s 80P(2)(d) of the Act. The provision of Sec. 80P(2)(d) of the Act which provide that where the gross total income of the assessee being a cooperative society includes income from by way of interest or dividend derived from the cooperative societies from its investment with any other cooperative society the whole of such income shall be deductible while computing the total income of the assessee. We have further gone through the copy of detailed return filed by the assessee on ITR-V placed at page no.1 to 58 of the paper book and noticed that at page no. 50 of the return of income under the head schedule VI-A deduction under chapter VIA was claimed at column no. 2(1) under the head 80P of Rs.22,92,105/-. The assessee has demonstrated from the return of income that it has filed claim of deduction and even in the computation of total income placed at page no.2 of the paper book assessee has claimed deduction under chapter VIA of the Act to the amount of Rs.22,92,105/-. After taking into consideration the above facts and evidences available on record we find that action of the CPC in disallowing the claim of deduction u/s 80P(2)(d) is not justified, therefore, we direct the AO to allow the claim of the deduction u/s 80P(2)(d) after verification of the material as discussed above in this order. Therefore, the appeal of the assessee is allowed.