NEELKANTH NIRANJAN PREMISES CO-OP SOCIETY LTD,MUMBAI V. INCOME TAX OFFICER 23(2)(6), MUMBAI

ITA 2207/MUM/2025

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The case involves Neelkanth Niranjan Premises Co-op Society Ltd., the appellant, contesting the decision of the CIT(A)/NFAC which confirmed the non-allowance of deduction under section 80P(2)(d) for interest income from cooperative banks. The appellant argued that the non-allowance was due to an inadvertent error in filling the tax return, where the details were incorrectly entered in Column No. 14 instead of Column No. 11. The Tribunal considered the legal position that interest earned from cooperative banks is eligible for deduction under section 80P(2)(d) and directed the assessing officer to correct the mistake and verify the details.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708382 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2020-2021
• Other Referred Cases: Sanchit Software & Solutions (P) Ltd. vs CIT (2012) 25 taxmann.com 123 (Bom)
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURENDRA MOHAN
• Assessee Lawyers: VIMAL PUNMIYA
• Keywords: Earning of tax free income
• Section: 154; 271(1)(c); 234B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 2207/MUM/2025 (AY: 2020-21) (Physical hearing) NeelkanthNiranjan Premises Co-op Society Ltd. Ground Floor, Niranjan Building, 99, Marine Drive, Mumbai-400002. [PAN No. AAATN2383B] Vs ITO, Ward-23(2)(6), Mumbai Piramal Chambers, Lalbaug, Mumbai – 400012. Appellant / Assessee Respondent / Revenue Assessee by Shri Vimal Punmiya, CA Revenue by Sh. Surendra Mohan, Sr. DR Date of hearing 14.07.2025 Date of pronouncement 14.07.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of Ld. CIT(A)/NFAC dated 03.02.2025 for assessment year (AY) 2020-21. The assessee has raised following grounds of appeal: “1. The Ld. CIT(A) erred in confirming the addition of deduction under section 80P(2)(d) of the Income Tax Act 1961 of Rs.2,53,830/- towards interest income earned from cooperative banks and erred in adding the same to the total income of the assessee. 2. The Ld. CIT(A) erred in charging interest under section 234A 234B and 234C of the Income Tax Act 1961. 3. The Ld. CIT(A) erred in invoking the penalty proceeding under section 271(1)(c) of the Income Tax Act 1961. 4. The appellant craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing.” 2. Rival submissions of both the parties have heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that while ITA No. 2207/Mum/2025 Neelkanth Niranjan Premises Co-op Society Ltd. 2 filing return of income (ITR-5), the assessee inadvertently filled up the details in Column No. 14 and Column No. 11 of deduction of chapter of section 80P. The assessee filled up the details of exempt income in Column No. 14 instead of column No.11, which relates to deduction under section 80P(2)(d). The CPC while processing the return of income not allowed such deduction. The assessee filed application for rectification under section 154. The application under section 154 was rejected by CPC and communicated to the assessee there is no mistake apparent. The ld. CIT(A) confirmed the action / non- allowance of deduction under section 80P(2)(d) with similar observation that there was no apparent mistake. The ld. AR of the assessee submits that ld CIT(A) was fully empowered to allow to correct the mistake occurred inadvertently while filing return of income under ITR-5. The assessee was denied relief due to hyper technical reasons. The ld. AR of the assessee relied upon the decision of Bombay High Court in Sanchit Software & Solutions (P) Ltd. vs CIT (2012) 25 taxmann.com 123 (Bom), wherein it was held that if the assessee sought to exclude some exempted income, but by mistake omitted to do so, revision could not be denied. The ld AR of the assessee prayed that he may be allow to correct the mistake and matter may be restored back to the file of jurisdictional assessing officer for verification of fact and the nature of interest income and dividend income which is claimed by assessee as exempt under section 80P(2)(d). The assessee has earned interest from Saraswat Co-op Bank Ltd. Patan Co-op Bank Ltd. and Maharashtra State Co-op Bank Ltd. The Co-operative banks are primarily co- operative society as has been consistently held in a series of decisions by this ITA No. 2207/Mum/2025 Neelkanth Niranjan Premises Co-op Society Ltd. 3 Bench. The ld. AR of the assessee submits that specific direction may be given to the assessing officer for verification of fact and passing the order afresh. 3. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of lower authorities. The ld. Sr. DR submits that there is no mistake apparent in the order of CPC, thus there was no question of correcting such mistake by CPC. The ld. CIT(A) also upheld the action of CPC as there was no mistake in their record. So the order of ld. CIT(A) may be upheld. 4. I have considered the contentions of both the parties and have gone through the orders of lower authorities carefully. I find that there is no dispute of legal position that interest earned by co-operative society from co-operative bank is eligible for deduction under section 80P(2)(d) as has been held in a series of decision. Thus, the assessee is also eligible for deduction of interest income received from various co-operative banks. However, on careful perusal of record, I find that while filling details in ITR-5, the assessee instead of mentioning the figure of interest income from other co-operative society / bank for claiming relief under section 80P, wrongly filled up such details in Column /para 14, instead in Column No. 11 of the return of income. I find that such columns are scanned by ld. CIT(A) in his order. Considering the fact that such omission or correction was a rectifiable mistake and could be corrected by lower authorities. I am conscious of the fact that return was processed by CPC, however, the ld. CIT(A) was not ITA No. 2207/Mum/2025 Neelkanth Niranjan Premises Co-op Society Ltd. 4 precluded from correcting such mistake, instead of taking hyper technical approach. 5. I find that Hon’ble Jurisdictional High Court in Sanchit Software & Solutions (P) Ltd. vs CIT (supra) also held that where assessee sought to exclude some exempted income, but by mistake omitted to show, revision (correction) could not be denied. Thus, considering the submission of ld. AR of the assessee that it was an accidental omission in mentioning the figure of interest received from co-operative bank, I direct the assessing officer to correct the mistake committed by assessee and verified the quantum of interest received from different co-operative banks and allow relief to the assessee in accordance with law. Needless to direct that before passing the order afresh, the assessing officer shall allow opportunity of hearing to the assessee. In the result, grounds of appeal of assessee are allowed. 6. In the result, the appeal of the assessee is allowed for statistical purpose. Order was pronounced in the open Court on 14/07/2025. Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated 14/07/2025 Biswajit ITA No. 2207/Mum/2025 Neelkanth Niranjan Premises Co-op Society Ltd. 5 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai "