ITO-42(1)(2), MUMBAI V. GORAGANDHI CO-OPERATIVE HOUSING SOCIETY LTD., MUMBAI

MA 17/MUM/2024

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The case involves Goragandhi Cooperative Housing Society Ltd, which filed a return of income declaring a total income and claimed a deduction under section 80P(2) of the Income Tax Act. The Income Tax Officer (ITO) assessed a higher income after scrutiny, disallowing the deduction claimed. The Society's appeal to the CIT(A) was dismissed, leading to an appeal to the ITAT, which initially ruled in favor of the Society based on precedents that allowed such deductions for cooperative societies. The revenue filed a miscellaneous application seeking rectification of this order, arguing that the ITAT's decision was based on a misinterpretation of the facts and law, particularly referencing a Karnataka High Court decision that contradicted the ITAT's earlier ruling. However, the ITAT dismissed the revenue's application, emphasizing that it cannot review its own decisions but can only rectify mistakes apparent from the record.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633669 (ITAT-MUMBAI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-06-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: M/s Amore Commercial Premises Co-op Society Ltd vs. CPC Karnataka, Pr. CIT & Anr. vs. Totgar's Co-operative Sale Society Ltd., State Bank of India vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BHAGIRATH RAMAWAT
• Assessee Lawyers: AKASH KUMAR
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER M.A. No.17/Mum/2024 (Arising out of ITA No.1024/Mum/2023) (Assessment year: 2017-18) ITO-42(1)(2), Mumbai Kautilya Bhavan, Room No.745, BKC, Bandra East, Mumbai-400 051 vs Goragandhi Cooperative Housing Society Ltd, SVP Road, Borivali (W), Mumbai-400 051 PAN: AAAAG3933F APPLICANT RESPONDENT Assessee by : Shri Akash Kumar Respondent by : Shri Bhagirath Ramawat, Sr. DR. Date of hearing : 06/06/2025 Date of pronouncement : 10/06/2025 O R D E R Per Anikesh Banerjee (JM) : By this miscellaneous application, the revenue seeks rectification of the order passed by the Tribunal vide order dated 15/06/2023 in ITA No.1024/Mum/2023, by stating as under:- “The assessee is a Cooperative Housing Society and filed Return of income declaring total income at Rs. 17,13,110 on 29.09.2017 after claiming deduction u/s 80P(2) of the Act, of Rs. 13,84,980/- The assessee has invested its funds in fixed deposits on which interest was earned 2 M.A. 17/Mum/2024 Goragandhi co-op Hsg Soc Ltd by the assessee The same was processed u/s.143 (1) of the I.T. Act, 1961. Subsequently the case was selected for scrutiny through CASS. Total income of the appellant was assessed at Rs. 30,98,090/- as it was found from the Profit and Loss account submitted by the assessee that the assessee has credited income earned on Investments (FDR) and Saving Bank account of amounting Rs. 13,59,356/- and Rs. 25,624/- respectively in the Profit & Loss account. It was observed that the income shown by the assessee as its income from banking activities is in fact income from other sources. Therefore, the deduction claim u/s 80P(2) is not allowable to the assessee. It is noted that the interest income of Rs. 13,59,356/- earned on the investment of FDR with the MDCC Bank, New India Co-operative Bank and Saraswat Co-operative Bank. As per provisions of the Section 80P of the Act, the Fixed Deposit made with the MDCC Bank, New India Co-operative Bank and Saraswat Co-operative Bank is not entitled for the deduction u/s 80P of the Act. Therefore, the amount of income earned from investment in FDR and Saving bank account of Rs. 13,84,980/- (Rs. 13,59,356/- Rs. 25,624/-) as the assessee claimed the deduction Rs. 13,84,980/- is added to back to the total income of the assessee and passed order u/s 143(3) dated 28.06.2019. The assessee challenged the order u/s 143(3) dated 28.06.2019 before the CITIA) who dismissed the appeal of the assessce vide its order no. ITBA/NFAC/S/250/2022- 23/1049256523(1) dated 30.01.2023. The Ld. CIT/A)(NFAC)-confirmed the addition made by Assessing Officer with regard to deduction claimed by assessee u/s 80P(2) of the Act as income generated from distribution of essential commodities to the ration card holder through fair price shop does not lie under the purview of deduction u/s 80P of the 1.T.Act, 1961. As the order of the Ld. CIT(A) was found unacceptable to the assessee further appeal was filed by the assessee before the Hon'ble ITAT. 4. Decision of Hon'ble ITAT: The Hon'ble ITAT, Mumbai \"SMC\" Bench passed an order in the above mentioned case on 15.06.2023 vide 1024/Mum/2023 for A.Y. 2017-18. The Hon'ble ITAT, relying on the decision in the case of M/s Amore Commercial Premises Co-op Society Ltd vs. CPC Karnataka in ITA No. 2873 & 2874/Mum/2022 dated 17-01-2023, case of Pr. CIT & Anr.Vs. Totgar's Co-operative Sale Society Ltd. (2017) 292 ITR 74 (Kar.) and Hon'ble Gujarat High Court in case of State Bank of India vs. CIT (2016) 389 ITR 578 (Guj.) stating that the cooperative society receives/earns interest on deposits with the co-operative bank is eligible for claim of deduction under section 80(2)(d) of the Act. 5. From perusal of the order of Hon'ble ITAT, it appears that the decision of Hon'ble ITAT is not based on true appreciation of the facts of the case. It is pertinent to mention here that the 3 M.A. 17/Mum/2024 Goragandhi co-op Hsg Soc Ltd assessee being a Housing Co-operative Society and the interest earned by it is not an income from its business activities. Therefore, the assessee is not entitled for deduction claimed u/s 80P(2)(d) of the Act as held in the case of Pr.CIT vs. Totagars Cooperative Sale Society (2017) 395 ITR 611 (Karn.) dated 16/06/2017. Further, the decision in the case of Pr.CIT vs Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn.) dated 05/01/2017 at S.No. 2 above is entirely different from the decision in the case of Pr.CIT vs Totagars Cooperative Sale Society (2017) (395 ITR 611 (Karn.) dated 16/06/2017 mentioned at S.No. 1 herein above. Hence, in view of the above, the Hon'ble ITAT is requested to kindly consider the decision mentioned at Sr.No. 1 since the assessee is a Housing Co-operative Society' and the facts involved in the case mentioned at Sr.No. I are similar to the case of the assessee and pass the appropriate order considering the decision mentioned at S.No. 1 above and as such the decision of the Hon'ble ITAT needs to be revised, for which this Miscellaneous Application is being filed.” 2. We have heard the parties on the miscellaneous application. We find that the Tribunal, while deciding the issue in favour of the assessee followed the decision of the co-ordinate bench of the Tribunal in case of M/s Amore Commercial Premises Co-op Society Ltd vs CPC Karnataka in ITA No.2873 & 2874/Mum/2022, order dated 17/01/2023. The revenue now contends that as per the judgement of the Hon’ble Karnataka High Court in the case of Pr.CIT vs.Totagars Cooperative Sale Society (2017) 395 ITR 611 (Karn.) dated 16/06/2017, there is mistake apparent on the order of the Tribunal dated 17/01/2023 inasmuch as that the assessee is not entitled for deduction under section 80P(2)(d) as the interest earned by the assessee is not from its business activities. We do not see a mistake apparent on record, However, we find that provisions of section 254(2) empowers the Bench to rectify any mistake apparent from record, amend any order passed by it under section 254(1); but does not 4 M.A. 17/Mum/2024 Goragandhi co-op Hsg Soc Ltd empower the Bench to review its own order. In this view of the matter, we do not see any merit in the miscellaneous application filed by the revenue, which is hereby rejected. 3. In the result, the miscellaneous application filed by the revenue is dismissed. Order pronounced in the open court on 10th day of June, 2025. Sd/- sd/- (NARENDRA KUMAR BILLAIYA) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,दिन ांक/Dated: 10/06/2025 Pavanan Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकरआयुक्त CIT 4. दवभ गीयप्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्डफ इल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai "