SHANKARRAO SHELAR NAGARI SAH PATSANSTHA MARYA,DEHU ROAD PUNE vs. INCOME TAX OFFICER WARD 9(3) PUNE, AKRUDI , PIMPRI-CHINCHWAD

आदेश / ORDER

PER INTURI RAMA RAO, AM:

The appellant is a Cooperative Society formed under the Maharashtra Cooperative Societies Act, 1960. It is engaged in the business of accepting deposits and lending money to its Members. No regular Return of Income for the A.Y. 2017-18 was filed. The Assessing Officer (AO) based on the information that the appellant society made a cash deposit of Rs.12,84,010/- during the demonetization period with Thane Janata Sahakari Bank Ltd. Dehu Road, Pune, formed an opinion that income escaped assessment to tax. Accordingly, a notice u/s.142(1) was issued by the Assessing Officer on 09.03.2018 calling upon the appellant society to file the return of income. The appellant society had not complied with the said notice. During the course of assessment proceedings, the AO noticed that the appellant society had furnished the computation of total income on 08.08.2019 wherein it claimed deduction of Rs.4,19,144/- u/s.80P(2)(a)(i) of the Income-tax Act, 1961 (hereinafter also called ‘the Act’). The AO was of the opinion that the interest income of Rs.4,19,144/- earned on deposits made out of the surplus funds with other Cooperative banks cannot be allowed as deduction, primarily for the reason that no such claim was made in the return of income and secondly, such interest does not qualify for deduction u/s.80P(2)(d) of the Act. Accordingly, he brought to tax the sum of Rs.4,19,144/- treating the same as Income from Other Sources.

“8. However, the Petitioners are faced with the statutory provision contained in Sub Section (5) of Section 80A of the Act. The Petitioners' claim cannot therefore be accepted de hors the said statutory provision and ordinary principle of the wide powers of the Commissioner of Income-tax exercising revisional jurisdiction under Section 264 of the Act cannot be imported. What Sub Section (5) of Section 80A of the Act mandates is that, if the assessee fails to make a claim in his return of income for any deduction under the provisions specified therein, the same would not be granted to the assessee. This condition or restriction is not relatable to the Assessing Officer or the Income Tax Authority. This condition attaches to the claim of the assessee and has to be implemented by the Assessing Officer, Commissioner of Income-tax or the Appellate Tribunal as the case may be. There is no indication in Sub Section (5) of Section 80A of the Act as to why the restriction contained therein amounts to limiting the power of Assessing Officer but not that of Commissioner.”

Order pronounced on this 13th day of August, 2024.