SHREE JALARAM COOP. CREDIT SOCIETY LTD,VIRAMGAM V. THE ITO, WARD-3(2)(1), AHMEDABAD

ITA 1951/AHD/2025

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The case involves Shree Jalram Coop. Credit Society Ltd, which appealed against the order of the CIT(A) that upheld a prima facie adjustment by way of disallowance under section 80P amounting to Rs. 20,05,865. The disallowance was initially made by the CPC Bengaluru in an order passed under section 143(1) of the Income Tax Act, 1961. The assessee argued that the adjustment was illegal as the provision relating to disallowance under section 143(1)(a)(v) was only applicable from the assessment year 2021-2022 onwards, following an amendment by the Finance Act, 2021. The Tribunal agreed with the assessee, noting that the fixed deposits in question were with a cooperative bank, and thus the income derived from them was exempt under section 80P(2)(a)(i).

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826261 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Appeal Filed On: 15-10-2025
• Other Referred Cases: PCIT vs. Ashwinkuamr Arban Co-operative Bank Ltd. (2024) 168 taxmann.com 314
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURESH CHAND MEENA
• Assessee Lawyers: S.N. DIVETIA
• Keywords: Principle of natural justice; Rectification of order
• Section: 154

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before Ms. Suchitra Kamble, Judicial Member Shree Jalram Coop. Credit Society Ltd, 1 Jalaram Shopping Centre, Opp. K B Shah High School, Viramgam-382150 PAN: AAEAS2849C (Appellant) Vs The ITO, Ward-3(2)(1), Ahmedabad (Respondent) Assessee by: Shri S.N. Divetia Shri Samir Vora, A.Rs. Revenue by: Shri Suresh Chand Meena, Sr. D.R. Date of hearing : 04-12-2025 Date of pronouncement : 06-01-2026 आदेश/ORDER This is an appeal filed against the order dated 29-09- 2025 passed by ADDL/JCIT(A)-3, Chennai for assessment year 2012-13. 2. The grounds of appeal are as under:- “1.1 The order u/s. 250 passed on 29.09.2025 by Addl./JCIT(A)- 3. Chennai [For short CIT(A)] upholding the prima facie adjustment by way of disallowance u/s 80P aggregating to Rs. 20,05,865/ made in order passed u/s 143(1) on 23.09.2020 by CPC Bengaluru is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld.CIT(A) has erred in law and on facts in not appreciating that the prima facie adjustment by way of disallowance u/s 80P aggregating to Rs. 20,05,865/- made in order passed u/s 143(1) on 23.09.2020 by CPC Bengaluru was ITA No. 1951/Ahd/2025 Assessment Year 2019-20 Printed from counselvise.com I.T.A No. 1951/Ahd/2025 Shree Jalaram Coop. Credit Society Ltd. ITO, A.Y. 2019-20 2 wholly illegal and unlawful because the provision relating to 143(1)(a)(v) was inserted by Finance Act, 2021 w.e.f. 01.04.2021 so that it was not applicable to the case of the appellant for AY 2019-20. 2.1 The Ld. CIT(A) has grievously erred in law and or on facts in upholding disallowance u/s 80P aggregating to Rs. 20,05,865/ made in order passed u/s 143(1) on 23.09.2020 by CPC Bengaluru. 2.2 That in the facts and circumstances of the case, the Ld. CIT(A) ought to have upheld disallowance u/s 80P aggregating to Rs. 20,05,865/- made in order passed u/s 143(1) on 23.09.2020 by CPC Bengaluru. It is therefore prayed that disallowance u/s 80P of Rs. 20,05,865/-may please be deleted.” 3. The assessee filed return of income for assessment year 2019- 20 on 27-07-2020 declaring total income at Rs. nil after claiming exemption u/s. 80P to Rs. 20,05,865/-. The return of income was processed u/s. 143(1) of the Income Tax Act, 1961 on 23-09-2020 by making an addition of Rs. 20,05,865/- by disallowing the deduction claim u/s. 80P of the Act. The assessee filed rectification petition u/s. 154 dated 27-01-2021. The rectification order u/s. 154 dated 05-02- 2021 confirming the addition made as per the intimation order u/s. 143(1). 4. Being aggrieved by the order u/s. 154 of the Act, 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 claim of deduction made in respect of section 80P was admissible because the assessee society is engaged in providing credit facilities to its members as in past as per its bye-laws. The total interest income earned by the society is Rs. 92,45,723/- out of which the interest income from fixed deposits with bank was only Rs. 18,77,754/- whereas the balance interest income was that of Rs. 73,67,969/- derived from providing credit facilities to Printed from counselvise.com I.T.A No. 1951/Ahd/2025 Shree Jalaram Coop. Credit Society Ltd. ITO, A.Y. 2019-20 3 the members which was exempt u/s. 80P(2)(a)(i) of the Act so far as the interest income from deposits with bank of Rs. 18,77,754/-, the audited account clearly shows that the society is having fixed deposit with which is exempt u/s. 80P(2)(a)(i) being received from another co- operative bank. The ld. A.R. relied upon the decision of Hon’ble Gujarat incase of PCIT vs. Ashwinkuamr Arban Co-operative Bank Ltd. (2024) 168 taxmann.com 314. The ld. A.R. submitted that adjustment made u/s. 143(1)(a)(v) which provides for disallowance of deduction or failure to file ITR within the due date u/s. 139(1). However, this clause was amended by Finance Act, 2021 w.e.f. 01-04- 2021 whereby the disallowance of deduction under the provisions of Chapter 6A under the head “C” deduction in respect of certain income was inserted and therefore such adjustment would be made from assessment year 2021-2012 only whereas the present appeal for assessment year 2019-20 and therefore the adjustment made by CPC is without jurisdiction and illegal. 6. The ld. D.R. submitted that the due date was over and thus the assessee cannot claim 80P deduction if the assessee has not filed its return within the stipulated due period. 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 material available on record. It is pertinent to note that the assessee is in fact entitled for the deduction u/s. 80P as the fixed deposits were with the co-operative bank which is registered under Co- Operative Societies Act. As regards delay in filing of the return beyond stipulated due period, the same comes into effect on 01- 04-2021 and thus for the present assessment year it will not be applicable as it is the assessment year 2019-20. Thus, the appeal of the assessee is allowed. Printed from counselvise.com I.T.A No. 1951/Ahd/2025 Shree Jalaram Coop. Credit Society Ltd. ITO, A.Y. 2019-20 4 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 06-01-2026 Sd/- (Suchitra Kamble) Judicial Member a.k. TRUE COPY Ahmedabad : Dated 06/01/2026 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद Printed from counselvise.com "