Loading judgment…
No AI summary yet for this case.
आयकर अपील�य अ�धकरण,च�डीगढ़ �यायपीठ, च�डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘SMC’, CHANDIGARH BEFORE SHRI A.D. JAIN, VICE PRESIDENT & SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ �नधा�रण वष� / Assessment Year : 2018-19 The Habrol Cooperative Vs. The ITO, बनाम Dharamshala Agricultural Service Society Limited, Vill. Lagru Khundian Distt.Kangra HP 176031 �थायी लेखा सं./PAN No: AADAT1205A अपीलाथ�/ APPELLANT ��यथ�/ REPSONDENT ( PHYSICAL HERING ) �नधा�रती क� ओर से/Assessee by : Shri Sudhir Sehgal, Advocate राज�व क� ओर से/ Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr.DR सुनवाई क� तार�ख/Date of Hearing : 08.08.2024 उदघोषणा क� तार�ख/Date of Pronouncement : 26.09.2024 आदेश/Order Per Krinwant Sahay, A.M.:
The appeal in this case has been filed by the Assessee against the order dated 22.01.2024 of the Addl./JCIT (A)-4, Bengaluru.,
2. Grounds of appeal taken by the Assessee, are reproduced as under: - 1) That the order of the learned assessing authority is against the law and facts and deserved to be quashed
158-Chd-2024 – The Habrol Cooperative Agricultural Service Society Limited, Kangra 2 2) That the learned assessing authority was not justified in imposed tax and interest amounting Rs 689366 by disallowing deduction under chapter VI -A in respect of section 80P of the Income Tax Act 1961, as assessee is providing banking /credit facilities to its members and covered u/s sec 80P (2)(a)(1) without considering the facts of the case which is highly arbitrary, illegal, unwarranted & uncalled for. 3) That the assessee has filed rectification but same are rejected, copy of rectification made are enclosed. 4) That the learned assessing authority erred not placing any reliance on the material placed during the proceedings. 5) That it is prayed that the order of the learned assessing authority be quashed and income tax of Rs 689366 /- wrongly & illegally levied be remitted to the appellant. 6) That the appellant craves leave to amend or vary the grounds of appeal at the time of hearing or with the appeal is disposed off.
As per the submissions filed by the ld. Counsel for the Assessee the brief facts are as under: -
This is a case of Co-operative Society in the remote Village of Himachal Pradesh and this Society is providing banking/credit facilities to its members. The returns have been filed by claiming deduction u/s 80 P(2)(a)(i) of the Income Tax Act 1961 year after year and 158-Chd-2024 – The Habrol Cooperative Agricultural Service Society Limited, Kangra 3 in the later and previous years, the same have been allowed without any dispute.
During the Asstt. Year 2018-19 and in earlier years, the Co-operative Society was totally depended upon their counsel for filing the Tax returns since all the members of the Society are un-educated and agriculturists only.
3. Actually, while filing the return for Asstt. Year 2018-19, the counsel of the assessee had wrongly claimed the deduction u/s 80 P (2) (c) and the same was processed u/s 143(1) 4. Though, the assessee filed the application u/s 154 and even filed the rectified return, but the same was not considered. Then the Assessee filed an appeal before the CIT(A), mentioning the same facts and the Ld. CIT(A) has only stated that the valid claim had to be made in the return of income and, therefore, the assessee having claimed the deduction under wrong section and, thus, the appeal was dismissed by the CIT(A).
5. It is submitted that it is a fact that assessee is entitled to deduction u/s 80P(2)(a)(i) and even same was allowed year after year and it was only on account of wrong claim made by the Counsel of the assessee in the return that the said deduction was not allowed. It is settled law that on the mistake of counsel, no litigant should suffer as per the judgment of Hon'ble Punjab & Haryana High Court in the case of Sh. Manoj Ahuja (Miner) & Another 158-Chd-2024 – The Habrol Cooperative Agricultural Service Society Limited, Kangra 4 Vs Inspecting Assistant Commissioner as reported in 150 ITR 696 (P&H, 6. Further, reliance is being placed on the following judgments that even if there is wrong claim made by the assessee, but, if any, relief is due to the assessee, the same may be allowed, even if the assessee has omitted to claim the same inadvertently and in the said judgments, the reference has been made to CBDT Circular No. 15/1955 and the appeal of the department was dismissed. This judgment is in the case of CIT (International Taxation) Vs Heidrick Struggles Inc. reported in 461 ITR 33.
Further reliance is also being placed on the following judgments on the similar facts:- i). National Contracting Company Pvt. Ltd. Vs. DCIT as reported in vide order dated 24.06.2024 ii). S.R. Koshti Vs. CIT as reported in [2005] 2761. ITR 165 Gujrat High Court iii) ACIT vs. M/s Nikkamal Jewellers as reported in (2017) 59 ITR (Trib) 0116 (Chandigarh) So, it has been duly held in the above judgments, the assess should not be over assessed even if there is a mistake made by the assessee. As such the legitimate deduction for which the assessee is entitled should be allowed while determining the taxable income. In the 158-Chd-2024 – The Habrol Cooperative Agricultural Service Society Limited, Kangra 5 instant case as well, the only inadvertent error made by the assessee is claiming the deduction under wrong clause, however, the deduction has always been allowed in the case of the Assessee and the relief is due to the assessee for the year under consideration as well, the same may be please be allowed. 4. The ld. DR relied on the orders of the Addl./JCIT (A).
We have considered the findings given by the Addl./JCIT(A) in his order dated 22.1.2024, which are as under:-
“10. Though, it may be a fact that the assessee is otherwise eligible to claim deduction under section 80P(2)(a)(1) of the Act; however, the provision contained in section 80A(5) of the Act stands as a brain allowing such deduction to the assessee. For the sake of completers, we must observe, having carefully gone through the decisions cited by learned authorized representative of the Assessee, we are of the view that in none of these decisions, the provision contained in section 80A(5) of the Act was taken note of. We are conscious of the fact that in case of ITO V s MSEB Employees Co-Credit Society Ltd (supra), the co- ordinate bench has held that a, if the assesses has not claimed a deduction in ITA 6029/Mum/2019 the return of income, the appellate. authorities have power to allow deduction which is allowable under the provisions of the Act. However, as it appears form a 158-Chd-2024 – The Habrol Cooperative Agricultural Service Society Limited, Kangra 6 reading of the said decision, provision contained in section 80A(5) was not brought to the notice of the Tribunal. Further, the Tribunal did not have the benefit of the decision of the I Hon'ble jurisdictional High Court in case of EBR Enterprises vs UOI (supra) which was subsequently rendered.
It may be a fact that the Tribunal has allowed assessee's claim of deduction under section 80P(2)(a)(i) of the Act in assessment years 2010-11 and 2012-13. However, here is nothing on record to suggest that there was any violation of section 80A(5) of the Act. Therefore, the factual position based on which the decisions were rendered in assessment year 2010-11 and 2012-13 are different from the impugned assessment year. Thus, respectfully following the ratio laid down in the decision of the Hon'ble jurisdictional High Court in EBR Enterprises vs UOI (supra), we hold that the assesses cannot be allowed deduction under section 80P(2)(a)(i) of the Act, insofar as, the impugned assessment year is concerned due to non-fulfillment of conditions contained in section 80A(5) of the Act."
We have heard the findings of the ACIT/ JCIT(A) in his appeal order and the submissions made by the ld. Counsel for the Assessee.
7. The ld. DR relied on the order of the ACIT/JCIT(A).
158-Chd-2024 – The Habrol Cooperative Agricultural Service Society Limited, Kangra 7 8. The Addl./JCIT(A_ has discussed in his order that the provisions of section 80A(5) and on that basis he has rejected the claim of the Assessee. For clarity, Section 80A(5) of the Income Tax Act, 1961 is reproduced as under:-
‘(5) Where the assessee fails to make a claim in his return of income for any deduction under section 10A or section 10AA or section 10B or section 10BA or under any provision of this Chapter under the heading "C.—Deductions in respect of certain incomes", no deduction shall be allowed to him thereunder’.
From this provision it is clear that section 80A(5) is broadly applied where any deduction is to be claimed u/s 10A or section 10 AA or section 10(B) or section 10BA etc. Here, in this case, the Assessee is a cooperative society and it has to be allowed deduction u/s 80P(2)( c)(i) so, it has got nothing to do with section 80A (5) of the Act.
Further, we have considered the case laws brought on record by the ld. Counsel of the Assessee and we find that there are number of case laws supporting view that in case there is a mistake by Assessee for claiming legitimate deduction, the Assessing Officer is duty bound to consider such legitimate deduction to the Assessee even if it was not claimed or claimed under wrong sections. Accordingly, we do not 158-Chd-2024 – The Habrol Cooperative Agricultural Service Society Limited, Kangra 8 find any justification in the findings given by the Addl/JCIT (A) and so it cannot be sustained, thus Assessee’s appeal on this issue is allowed.
In the result, the appeal is allowed.
Order pronounced on 26.09.2024.