BAY VIEW CO OPERATIVE HOUSE SOCIETY LIMITED ,MUMBAI V. INCOME TAX OFFICER WARD 24(1)(1), MUMBAI

ITA 3636/MUM/2025

AI Insights

The case involves Bay View Co-operative Housing Society Limited appealing against the order of the Commissioner of Income-tax (Appeals), Addl/JCIT (A) 1, Kolkata, which upheld the action of the Assistant Director of Income-tax, CPC - Bengaluru, in denying the society's claim for a deduction of Rs. 5,52,690 under section 80P(2)(d) of the Income-tax Act, 1961. The society had filed a return declaring NIL income for the Assessment Year 2021-22, which was processed under section 143(1), resulting in the determination of income at Rs. 5,52,690 after disallowing the deduction claim. The Tribunal examined both the legal and merit-based arguments presented by the society, ultimately deciding in favor of the society based on precedents and the specific provisions of the Income-tax Act regarding deductions for cooperative housing societies.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713055 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2021-2022
• Other Referred Cases: M/s. Premium Tower Co-operative Housing Society Limited vs. CIT(A), Mumbai, Ashna Enclave Co-operative Housing Society Limited
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASIF KAR MALI
• Assessee Lawyers: RITU PUNJABI; VARIOUS

Judgement Text

"IN THE INCOME-TAX APPELLATE TRIBUNAL “J (SMC)” BENCH, MUMBAI BEFORE SHRI. AMIT SHUKLA, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.3636/MUM/2025 (निर्धारण वर्ा/Assessment Year :2021-22) Bay view Co-operative Housing Society Limited Bay View Co-operative Housing Society Limited, Cts No. 1319, B/2, Juhu Versova Link Road, Andheri West, Mumbai 400053 v/s. बिधम Income Tax Officer, Ward 24(1)(1), Mumbai 604, Piramal Chambers, Lalbaug, Mumbai 400012 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AACAB2013R Appellant/अपीलधर्थी .. Respondent/प्रनिवधदी निर्ााररती की ओर से /Assessee by: Ms. Ritu Punjabi, Adv. रधजस्व की ओर से /Revenue by: Shri Asif Karmali (SR DR) सुिवधई की िधरीख / Date of Hearing 14.07.2025 घोर्णध की िधरीख/Date of Pronouncement 30.07.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the ADDL/JCIT (A)-1 Kolkata [hereinafter referred to as “CIT(A)”] dated 19/03/2025 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2021-22. 2. The assessee has raised the following grounds of appeal: Printed from counselvise.com P a g e | 2 ITA No. 3636/Mum/2025 AY 2021-22 Bay View Co-operative Housing Soceity Limited “1. The Commissioner of Income-tax (Appeal), Addl/JCIT (A) 1, Kolkata [\"the CIT(A)\"] erred in upholding the action of the Assistant Director of Income-tax. CPC - Bengaluru (\"the AO\") in denying the Appellant's claim for deduction of Rs. 5.52,690 under section 80(P)(2)(d) of the Act. The Appellant prays that the AO be directed to grant to the Appellant a deduction of Rs. 5,52,690 under section 80P(2)(d) of the Act. 2. The CIT(A) erred in upholding the correctness of the intimation dated 19- 10-2022 issued under section 143(1) of the Act though the same suffered from jurisdictional defects. The Appellant prays that the Intimation dated 19-10- 2022 be held to be bad in law and therefore be quashed. 3. The Appellant craves leave to add, to alter and/or amend the above ground of appeal.” 3. Brief facts are that the assessee filed return declaring NIL income for AY 2021-22 on 11.03.2022. The case was processed u/s. 143(1) and income was determined at Rs. 5,52,690/-, after disallowing the assessee’s claim for deduction u/s. 80P(2)(d) of the Act. Aggrieved with the intimation dated 19.10.2022, the assessee preferred an appeal before Ld. CIT(A), raising legal ground regarding making of impermissible adjustment that too without giving prior intimation opportunity. On merits also the assessee raised the ground regarding allowability of deduction 80P(2)(d) in the case of cooperative housing societies. Ld. CIT(A) however, dismissed the assessee’s appeal vide order dated 19.03.2025. The assessee is now in appeal before the Tribunal and has raised legal issues as well as the issue on merits regarding allowability of deduction u/s. 80P(2)(d) of the Act. 4.1. Before us, Ld. AR argued that no adjustment could be made on a debatable issue, by the CPC, more so, without giving an opportunity to the assessee. Ld. AR has also filed written submissions to clarify that for AY 2021- 22, pursuant to the amendment u/s. 143 (1) (a) (v) of the Act, an adjustment in Printed from counselvise.com P a g e | 3 ITA No. 3636/Mum/2025 AY 2021-22 Bay View Co-operative Housing Soceity Limited respect of Chapter VI-A deductions is permissible only if the return is filed beyond the due date specified u/s. 139(1) of the Act. It has been further submitted that the extended due date for filing return for AY 2021-22 was 15.03.2022 and assessee had filed its return of income on 11.03.2022. Accordingly, the prima facia adjustment could not have been made even for AY 2021-22 as the return had been filed before the due date. 4.2. Even on merits, the issue regarding allowability of deduction u/s. 80P(2)(d) stands decided in favour of the co-operative housing societies in numerous decisions of the coordinate benches. Ld. AR has specifically relied on the decision in ITA No. 1583/Mum/2023 in the case of M/s. Premium Tower Co-operative Housing Society Limited vs. CIT(A), Mumbai, wherein it has been held, after considering judgements of various Hon’ble High Courts on the issue, that the assessee is eligible for deduction of interest income earned from a cooperative bank u/s. 80P(2)(d) of the Act. 4.3. On the other hand, Ld. DR has relied on the order of Ld. CIT(A) and has argued that the interest earned from cooperative bank is not covered u/s. 80P(2)(d) of the Act. 5.1. We have heard the rival submissions and perused the material placed before us. On the legal issue regarding the scope of adjustment u/s. 143(1) of the Act, the impugned adjustment is clearly beyond the scope of permissible adjustments. Moreover, the assessee has not been given the opportunity mandated by law before making such an adjustment. Accordingly, on the legal Printed from counselvise.com P a g e | 4 ITA No. 3636/Mum/2025 AY 2021-22 Bay View Co-operative Housing Soceity Limited ground, the adjustment made by the CPC being beyond the scope of adjustment u/s. 143(1) deserves to be deleted. 5.2. On merits, the decision of the coordinate bench in the case of Ashna Enclave Co-operative Housing Society Limited and in ITA No. 332/Mum/2024 has also been cited by the Ld. AR, wherein under similar facts and circumstances, the issue has been decided in favour of the assessee. Thus, on merits also the issue is covered in favour of the assessee by various decisions of the coordinate benches wherein, it has been held that interest income of a cooperative housing society earned on deposits made with co- operative banks is eligible for deduction u/s. 80P(2)(d) of the Act. 7. In view of the above, the addition of Rs. 5,52,690/- made by the CPC on account of disallowance of u/s. 80P(2)(d) is hereby deleted. 8. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 30.07.2025. Sd/- Sd/- AMIT SHUKLA RENU JAUHRI (न्यधनयक सदस्य/JUDICIAL MEMBER) (लेखधकधर सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai दिन ुंक /Date 30.07.2025 दिव्य रमेश न ुंिग वकर/ स्टेनो आदेश की प्रनतनलनि अग्रेनित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT Printed from counselvise.com P a g e | 5 ITA No. 3636/Mum/2025 AY 2021-22 Bay View Co-operative Housing Soceity Limited 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यानित प्रनत //True Copy// आदेशािुसार/ BY ORDER, सहायक िंजीकार (Asstt. Registrar) आयकर अिीलीय अनर्करण/ ITAT, Bench, Mumbai. Printed from counselvise.com "