Shree Sarvodaya Sahakari Mandali Ltd., Vadodara V. The Dy.CIT, Circle - 2(1)(1), Vadodara

ITA 535/AHD/2022

AI Insights

The case involves Shree Sarvodaya Sahakari Mandali Ltd., a cooperative society, which appealed against the order of the CIT(A), National Faceless Appeal Centre, Delhi. The primary contention was the disallowance of a deduction claimed under Section 80P of the Income Tax Act, 1961, for the assessment year 2018-19. The Assessing Officer had initially disallowed the deduction, considering the return as belated, and the CIT(A) upheld this decision. The Tribunal, however, found that the interest income received from member cooperative societies qualifies for deduction under Section 80P(2)(d), thus reversing the decisions of the lower authorities.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299983 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-03-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 01-12-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 80P; 72; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I .T .A . No .5 35 /A h d / 20 22 ( A s se ss m e nt Y e a r : 20 18- 19 ) Sh r e e S a r vo d a ya Sa hak ar i Ma nd al i Ltd ., Ol d Ka c h h i ya w ad , Op p. La l C o ur t, N e a r Pa r d es hi Fa li a, Va do dar a - 39 0 0 01 V s. D C IT C ir cl e - 2 ( 1) ( 1) , V a d o da r a [ P AN N o. A A AB S3 72 2 R ] (Appellant) .. (Respondent) Appellant by : Shri Viranch Modi, A.R. Respondent by: Shri N. J. Vyas, Sr. D.R. D a t e of H ea r i ng 09.03.2023 D a t e of P r o no u n ce me nt 22.03.2023 O R D E R The appeal filed by the assessee is against the order passed by the Ld. CIT(Appeals), National Faceless Appeal Centre (NFAC), Delhi on 03.10.2022 for A.Y. 2018-19. 2. The grounds of appeal raised by the assessee are as under: “1. Order passed u/s u/s 143(3) r.w.s. 143(3A) & 143(3B) of the act is bad-in- law which the ld. CIT(A) failed to appreciate. 2. the ld. CIT(A) erred in dismissing the appeal on wrong plea that interest earned on deposits and saving bank accounts with Nationalized Banks & Co- operative banks is not business income and hence not eligible for deduction u/s 80P(2)(a)(i) of the Act.” 3. The assessee Shree Sarvodaya Sahakari Mandali Ltd. is an AOP/BOI (Cooperative Society) and has filed return of income for A.Y. 2018-19 on 05.10.2018 declaring NIL income. The case was selected for limited scrutiny on the issue of deduction from total income under Chapter VI-A. The Assessing Officer has taken date of filing return income on 20.02.2019 instead ITA No. 535/Ahd/2022 Shree Sarvodaya Sahakari Mandali Ltd. vs. DCIT Asst.Year–2018-19 - 2 - of 05.10.2018 and therefore consider the return of income as belated and consequently deduction claim under Section 80P of the Act was disallowed. 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. A.R. submitted that the assessee’s case was selected for limited scrutiny at the return of income was filed on 05.10.2018 after claiming deduction under Section 80P of the Act. Subsequently, the assessee filed revised return of income on 20.02.2019 declaring total income of Rs. NIL. The Ld. A.R. submitted that the Assessing Officer is duty bound to follow the detail procedure before making addition to return income as the Assessing Officer neither issue any show-cause notice nor draft assessment order for proposed addition to the return of income. The Ld. A.R. further submitted that the Assessing Officer has not spelled out as to why the deduction claim under Section 80P has to be disallowed. The CIT(A) has reproduced the submissions of the assessee’s and the case laws are simply observed that deduction claim under Section 80P is not allowable. Therefore, the Ld. A.R. submitted that the Assessing Officer as well as CIT(A) was not right in confirming the disallowance under Section 80P of the Act. The Ld. A.R. further submitted that the interest income was received from Mehsana Urban Cooperative Society and the same should have been taken into account by the Assessing Officer. The Ld. A.R. further submitted that the interest on deposits with Cooperative Banks was from Baroda Central Cooperative Bank Ltd., Mehsana Urban Cooperative Bank Ltd. and Prime Cooperative Bank Ltd. which are the Cooperative Societies. ITA No. 535/Ahd/2022 Shree Sarvodaya Sahakari Mandali Ltd. vs. DCIT Asst.Year–2018-19 - 3 - 6. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. The Assessing Officer in Assessment Order has not pointed out as to why the disallowance under Section 80P was made in assessee’s case. The CIT-A’s order is also reproduced the submissions as well as the decisions relied upon by the assessee. It is pertinent to note that in the present assessee’s case it is a Cooperative Society deriving interest from the member cooperative society and therefore, coming under the purview of Section 80P (2)(d) of the Act. Therefore, the assessee is entitled for deduction under Section 80P, the CIT(A) as well as the Assessing Officer has ignored this fact. 8. In result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 22/03/2023 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 22/03/2023 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/ Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad