ITAT Allahabad Judgments — March 2022

The Tribunal found that the computation of gross receipts and the estimation of income required proper verification. Therefore, the matter was set aside to the Assessing Officer for re-adjudication, allowing the assessee an opportunity to furnish relevant details.

The Tribunal held that the CIT(A) had erred in allowing deduction under Section 80P without adjudicating on crucial issues that go to the root of the matter. Specifically, the CIT(A) failed to determine whether the assessee qualified as a 'co-operative society' as defined under Section 2(19) of the Act, which is a prerequisite for claiming deduction under Section 80P. The Tribunal noted that the CIT(A) also did not address the AO's concerns regarding the failure of the assessee to substantiate its gross receipts and commission income, the rejection of its books of accounts under Section 145(3) for AY 2015-16, and the non-furnishing of a tax audit report despite being covered by Section 44AB. The Tribunal acknowledged that Section 80P provisions are benevolent but emphasized the onus on the assessee to provide necessary facts and the need for fact-finding inquiries by the authorities. Citing the Supreme Court's judgment in Mavilayi Service Co-operative Bank Limited v. CIT, the Tribunal decided to set aside the CIT(A)'s order on the issue of Section 80P deduction and restore the matter to the CIT(A) for fresh adjudication. The CIT(A) was directed to pass a detailed, reasoned, and speaking order after making necessary inquiries and verifications, providing the assessee with an adequate opportunity of being heard. The Tribunal explicitly stated that it had not commented on the merits of the issue and kept all contentions open. The appeals were allowed for statistical purposes.

The Tribunal held that the CIT(A) had erred in allowing deduction under Section 80P without adjudicating on crucial issues that go to the root of the matter. Specifically, the CIT(A) failed to determine whether the assessee qualified as a 'co-operative society' as defined under Section 2(19) of the Act, which is a prerequisite for claiming deduction under Section 80P. The Tribunal noted that the CIT(A) also did not address the AO's concerns regarding the failure of the assessee to substantiate its gross receipts and commission income, the rejection of its books of accounts under Section 145(3) for AY 2015-16, and the non-furnishing of a tax audit report despite being covered by Section 44AB. The Tribunal acknowledged that Section 80P provisions are benevolent but emphasized the onus on the assessee to provide necessary facts and the need for fact-finding inquiries by the authorities. Citing the Supreme Court's judgment in Mavilayi Service Co-operative Bank Limited v. CIT, the Tribunal decided to set aside the CIT(A)'s order on the issue of Section 80P deduction and restore the matter to the CIT(A) for fresh adjudication. The CIT(A) was directed to pass a detailed, reasoned, and speaking order after making necessary inquiries and verifications, providing the assessee with an adequate opportunity of being heard. The Tribunal explicitly stated that it had not commented on the merits of the issue and kept all contentions open. The appeals were allowed for statistical purposes.

The Tribunal held that the amended provisions of Section 36(1)(va) and 43B are applicable from AY 2021-22 onwards, not for the year under consideration. Therefore, the deduction for employee contributions deposited before the due date of the return of income is allowable.