BAGLAN PRATHMIK SHIKSHAK SAHKARI PATSANSTHA MARYADIT,NAMPUR V. INCOME TAX OFFICER, MALEGAON

ITA 358/PUN/2025

AI Insights

The case involves Baglan Prathmik Shikshak Sahkari Patsanstha Maryadit, a credit cooperative society, which appealed against the order of the CIT(A) that sustained the disallowance of deduction under section 80P of the Income Tax Act for the assessment year 2017-18. The society had not filed a return of income, and the Assessing Officer, based on information about cash deposits during the demonetization period, issued a notice under section 142(1) and subsequently denied the deduction citing section 80A(5). The Tribunal examined the applicability of section 80A(5) and section 80AC, ultimately deciding in favor of the assessee by allowing the deduction under section 80P.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 776547 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2025
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 07-02-2025
• Other Referred Cases: CIT vs. Jet Airways (1) Ltd. 331 ITR 236 (BOM), Sanchar Gramin Bigarsheti Sahakari Patsanstha Maryadit Vs. ITO, Prathamika Krishi Pattina Sahakara Sangha Ltd. Vs. ITO
• Laws Referred To: Income Tax Act
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P. MURKUNDE
• Assessee Lawyers: PRAMOD SHINGTE
• Keywords: Reassessment proceedings
• Section: 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.358/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year : 2017-18 Baglan Prathmik Shikshak Sahkari Patsanstha Maryadit, Nampur, Baglan, Nashik- 423204. PAN : AADAB1392C Vs. ITO, Ward-2, Malegaon. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 13.12.2024 passed by Ld. CIT(A)/NFAC for the assessment year 2017-18. 2. The appellant has raised the following grounds of appeal :- “1. On the facts and in circumstances of the case and in Law, Ld. AO erred in making various additions other than the reasons for which the case was reopened, i.e. cash deposited in bank during demonetization period, as he was satisfied with explanation offered during the course of reassessment proceedings, other additions are not permissible as per the provisions of section 147, in view of the judgment of Hon'ble jurisdictional High Court in the case of CIT vs. Jet Airways (1) Ltd. 331 ITR 236 (BOM). Assessee by : Shri Pramod Shingte Revenue by : Shri Ramnath P. Murkunde Date of hearing : 05.08.2025 Date of pronouncement : 17.09.2025 Printed from counselvise.com ITA No.358/PUN/2025 2 2. On the facts and in the circumstances of the case and in law. the lower authorities have erred in rejecting deduction u/s 80P(2)(a)(i) for a sum of Rs. 1,48,50,248/- being entire book profit of appellant society by relying on the provisions of Section 80A (5) of the IT Act, without appreciating the fact that said provisions do not apply to the appellant as no original return of income was filed by the appellant. 3. On the facts and in the circumstances of the case and in law, the lower authorities have erred in making the addition of Rs. 2,46,375/- being Interest received from deposits kept with other co-operative Bank, without realizing the fact that said figure is already part of the books of accounts and reflecting in the profit and Loss Account of the Society, and the profit of Rs.1,48,50,249/- already includes the same. Therefore, there is a double addition of the same amount which is not permissible as per the provisions of law.” 3. Facts of the case, in brief, are that the assessee is a Credit Cooperative Society registered under Maharashtra Cooperative Societies Act, 1960 with the main object of providing credit or loan to its Members and collect deposits from its Members by way of Fixed Deposits, Saving deposits and daily recurring deposits. Return of income for A.Y. 2017-18 was not filed. Learned Assessing Officer (AO) based on the information about the cash deposit of Rs.10,86,500/- in the bank accounts held with NDCC Bank Ltd. And Central Bank of India issued notice u/s 142(1) of the IT Act requiring the assessee to file the return for assessment year 2017-18. The secretary of the assessee society appeared in person and filed reply from time to time before the Assessing Officer. The Printed from counselvise.com ITA No.358/PUN/2025 3 Assessing Officer found that the objectives and activities of the assessee attracts the provisions of section 80P(2)(a)(i) of the IT Act, however the assessee has not furnished return of income, therefore, in the light of section 80A(5) of the IT Act, the assessee is not entitled for any deduction u/s 80P of the IT Act. Ld. AO was satisfied with the details filed about the source of cash deposit but denied the deduction u/s.80P of the Act as the assessee did not file the return of income and accordingly assessed the income at Rs.1,50,96,230/-. 4. Assessee challenged this addition before ld.CIT(A) but partly succeed since Ld. CIT(A) allowed the benefit of Rs.2,46,375/- and sustained the disallowance of deduction u/s 80P of the IT Act at Rs.1,48,50,249/-. Aggrieved assessee is now in appeal before this Tribunal. 5. Ld. Counsel for the assessee did not press ground no.1, therefore the same is dismissed as not pressed. 6. So far as the ground no.2 is concerned the assessee submitted that even though the assessee did not file the return of income but the activity of the assessee society has been accepted by the ld. AO and that the eligibility of the assessee for deduction u/s.80P of the Printed from counselvise.com ITA No.358/PUN/2025 4 Act has been denied solely for not filing the return of income invoking section 80A(5) of the Act. He however submitted that section 80AC of the Act is applicable where the assessee files the return but fails to make the claim of deduction/exemption. Section 80AC of the Act which provides that for claiming deduction u/s.80P of the Act return is to be filed within the statutory time limit has been inserted from 01.04.2018 and is not applicable in the instant case as it pertains to A.Y. 2017-18. In support of the contention, reliance was placed on the decision of this Tribunal in the case of Sanchar Gramin Bigarsheti Sahakari Patsanstha Maryadit Vs. ITO in ITA Nos.2342 & 2433/PUN/2024 order dated 06.01.2025 as well as the decision of Coordinate Bench, Bangalore in the case of Prathamika Krishi Pattina Sahakara Sangha Ltd. Vs. ITO reported in (2022) 142 taxmann.com 405. 7. On the other hand, ld. Departmental Representative vehemently argued supporting the orders of the lower authorities. 8. We have heard the rival contentions and perused the record placed before us. In this regard, we find that even if the assessee has not filed the return of income but since it has carried out the activity as a cooperative society which is duly registered under Printed from counselvise.com ITA No.358/PUN/2025 5 Maharashtra Cooperative Societies Act, 1960 and has maintained the details of Income and Expenditure Account during the year, the assessee is eligible for deduction u/s.80P(2)(a)(i) of the Act and that section 80A(5) of the Act is not applicable as it is applicable only in case return of income is filed. We observe that the assessee has referred and relied on the decision of Coordinate Bench, Bangalore in the case of Prathamika Krishi Pattina Sahakara Sangha Ltd. (supra) wherein similar issue was there and the assessee did not file the return of income for A.Y. 2017-18 and the deduction u/s.80P of the Act claimed subsequently during the course of assessment proceedings was denied by the AO referring to section 80A(5) of the Act. Coordinate Bench after considering the judicial precedents held as under : “7. I have heard the rival submissions. The learned Counsel for the assessee submitted that the provisions of section 80A(5) of the Act will come into play only when a return of income is filed by an assessee and the claim for deduction under Chapter VIA of the Act is not claimed in the said return. It was contended that since the assessee did not file return of income for Assessment Year 2017-18, there was no question of invoking the provision of section 80A(5) of the Act. His further submission was that section 80AC of the Act as it existed prior to its substitution by the Finance Act, 2018 w.e.f. 1-4-2018 reads as follows: \"80AC. Deduction not to bs allowed unless return furnished- Where in computing the total income of an assessee of the previous year relevant to the assessment year commencing on the 1st day of April, 2006 or any subsequent assessment year, any deduction is admissible under section 80-1A or section 80- 1AB or section 80-IC or section 80-ID or section 80-IE, no such deduction shall be allowed to him unless he furnishes a return of Printed from counselvise.com ITA No.358/PUN/2025 6 his income for such assessment year on or before the due date specified under subsection (1) of section 139.\" He pointed out that the aforesaid provisions contemplate filing of return of income to claim deductions under certain provisions of Chapter VI \"A\" of the Act and 80P is not one of the section which is mentioned in section 80AC of the Act. He therefore submitted that the deduction under section 80P of the Act cannot be denied to the assessee for non filing of return of income. Learned DR, on the other hand, reiterated the stand of the Revenue as reflected in the order of the CIT(A). 8. I have given a careful consideration to the rival submissions. I agree with the submissions of the learned Counsel for the assessee that section 80A(5) of the Act is applicable only when a return of income is filed by an assessee and a deduction under Chapter VI \"A\" of the Act, is not claimed in such return of income. It will not apply to a case where no return of income is filed. The provisions of section 80AC of the Act, as we have already seen, contemplates denial of deduction in respect of certain provisions of Chapter VI \"A\" of the Act, if a return of income is not filed by an assessee. Those provisions, as rightly contended by the learned Counsel for the assessee, do not apply to the claim for deduction under section 80P of the Act. Therefore, the Revenue authorities were not justified in not entertaining the claim of the assessee for deduction under section 80P of the Act as made by the assessee. Since neither the AO nor the CIT(A) have examined the other conditions for allowing deduction under section 80P of the Act, I deem it fit and proper to remand the issue of the assessee's eligibility to claim deduction under section 80P of the Act, in the sense with regard to the quantum of deduction and also with regard to the other conditions for allowing deduction under section 80P of the Act, for examining afresh by the AO. I therefore allow the appeal of the assessee for statistical purposes. 9. In the result, appeal of the assessee is treated as allowed for statistical purposes.” 9. Similar issue was also taken by this Tribunal in the case of Sanchar Gramin Bigarsheti Sahakari Patsanstha Maryadit (supra). We therefore following the judicial precedents and taking consistent view are of the considered view that ld. AO erred to invoke section 80A(5) of the Act in the instant case and therefore assessee’s claim Printed from counselvise.com ITA No.358/PUN/2025 7 of deduction u/s.80P of the Act deserves to be allowed as ld. AO has not disputed the carrying out of the activity of the cooperative society as per its objects coupled with all the necessary details and the quantum of income earned during the year. Thus, Ground No.2 raised by the assessee is allowed. 10. In so far as Ground No.3 is concerned, we find that Ld. CIT(A) has already given relief of Rs.2,46,375/-, therefore this ground no.3 becomes infructuous and hence not adjudicated. 11. In the result, appeal of the assessee is allowed. Order pronounced on this 17th day of September, 2025. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 17th September, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr.CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "