Income Tax Act permits cooperative societies to claim deductions under section 80P even if filed incorrectly, as long as the underlying activity aligns with permitted activities.

ORDER

PER: RATHOD KAMLESH JAYANTBHAI, AM

This appeal filed by assessee is arising out of the order of the National Faceless Appeal Centre, Delhi dated 26/05/2023 [here in after (NFAC)/ ld. CIT(A)] for assessment year 2019-20 which in turn arise from the order dated 18.04.2020 passed under section 143(1) of the Income Tax Act, by ADIT, CPC, Bangalore.

2. In this appeal, the assessee has raised following grounds: -

“1. The impugned order u/s 154/143(1)(a) dated 15.04.2021 is bad in law and on facts of the case, for want of jurisdiction and for various other reasons and hence the same may kindly be quashed and in any case, the impugned addition/s be deleted.

2. The ld. CIT(A)/NFAC erred in law as well as on the facts of the case in confirming the disallowance made of the deduction claimed u/s 80P(2)(a)(i) on account of the interest income, being a credit cooperative society providing credit facility to its members. The disallowance so made and confirmation thereof being contrary to the provisions of facts and law, be deleted in full and the deduction as claimed please be directed to allowed in full.

3. The ld. CIT(A)/NFAC erred in law as well as on the facts of the case in alleging non-filing of certain details which is contrary to the facts and in fact, all the relevant details are admittedly available on records establishing the compliance of the conditions hence the Appellant be held entitled to the deduction as claimed u/s 80P(2)(a)(i).

4. The appellant prays your honour indulgence to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.”

3. Succinctly, the fact as culled out from the records is that assessee has filed its return of income as AOP for AY 2019-20 on 29.08.2019 by admitting NIL income after claim of deduction under chapter VI of Income Tax Act for Rs. 5.08 lacs. The same was processed by ADIT, CPC, Benguluru, vide intimation u/s. 143(1) dated 18.04.2020 and total income was determined at Rs. 5,19,150. Apparently, appellant claim as an AOP under section 80P(2a)(i) was not allowed therefore, the assessee has filed rectification application under section 154 of the I.T. Act and same was duly processed by ADIT, CPC, Benguluru vide order dated 15.04.2021 passed u/s. 154 of the Act. In that order of rectification, ADIT, CPC, Benguluru has rejected assessee 's claim for deduction under section 80P of the I.T. Act, once again as done in 143(1) order dated 18.04.2020. While rejecting the assessee’s application under section 154, the ADIT, CPC, Benguluru observed that assessee had not filled schedule VIA for claiming deduction u/s. section 80P as needed along with incorrect applicability of status other than co-op. society etc.

4. Aggrieved from the order passed u/s. 143(1), assessee preferred an appeal before the ld. CIT(A)/NFAC. Apropos to the grounds so raised the relevant finding of the ld. CIT(A)/NFAC is reiterated here in below:

“2.3 It is a fact on record that appellant has filed its e-Return of Income as applicable for A.Y 2019-20 by making a claim u/s 80P of I.T Act. However, apparently, the e-filed return was not correctly filed as applicable to the claim u/s 80P of I.T Act involving correct filling of relevant Schedule VIA claim as needed as per I.T Act in the e-filed ROI by duly fulfilling the required conditions as applicable to Cooperative Society involved in the claim of deduction u/s 80P(2)(a)(i) of I.T Act. In the light of these facts, apparently, appellant's claim was not allowed as the relevant statutory return of income as filed by the appellant as applicable to a Cooperative Society with its correct status is not duly reflected in the relevant columns of e-filed return of the appellant as observed by the AD