IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER Assessment year : 2018-19 Assessment year : 2018-19 Assessment year : 2018-19 Assessment year : 2018-19 Assessment year : 2018-19 Assessment year : 2018-19 Assessee by : None (written submission filed)

Department by : Shri Amol Khairnar, CIT-DR Date of hearing : 09-12-2025 Date of pronouncement : 09-01-2026

O R D E R

PER R.K. PANDA, V.P:

This appeal filed by the assessee is directed against the order dated

28.03.2025 passed u/s 263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the Ld. PCIT, Pune-1 relating to assessment year 2018-19.

2. Facts of the case, in brief, are that the assesse is a co-operative society and has not filed its return of income for the impugned assessment year. Information was available in the Insight portal under the head ‘NMS cases’ that the assessee has deposited cash of Rs.61,19,654/- in its bank account number 2188 maintained with Kallappanna Awade Chalkaranji Janata Sahakari Bank Ltd, Ichalkaranji. The Assessing Officer, therefore, reopened the assessment by recording reasons and accordingly issued notice u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 31.03.2022 in response to which the assessee filed its return of income on 22.04.2022 declaring total income at Nil and after claiming deduction u/s 80P under the Part-C of Chapter VI-A amounting to Rs.8,40,004/-. The Assessing Officer completed the assessment u/s 147 r.w.s. 144B of the Act accepting the returned income.

3. Subsequently the Ld. PCIT examined the records and observed certain discrepancies in the assessment order which according to him appeared to be prejudicial to the interest of the Revenue. He, therefore, issued a show cause notice u/s 263 of the Act asking the assessee to explain as to why the return filed by the assessee should not be revised. The contents of the notice issued u/s 263 of the Act read as under:

4. However, despite number of opportunities granted by the Ld. PCIT the assessee did not respond for which the Ld. PCIT decided the issue on the basis of material available on record. He noticed that the assessee has made cash deposit of Rs.61,19,654/- and thus the gross receipts of the assessee exceeded the maximum amount not chargeable to income tax during the assessment year 2018-19. The assessee was obligated to furnish return of income u/s 139(1) of the Act. However, he failed to file its return of income within the prescribed due date nor did it file the return within the extended period allowed u/s 139(4) of the Act. He noticed that the Assessing Officer while completing the assessment u/s 147 r.w.s. 144B of the Act allowed the claim of deduction u/s 80P of the Act amounting to Rs.18,19,066/- i.e. Rs.8,40,004/- u/s 80P(2)(a)(i), Rs.50,000/- u/s 80P(2)(c)(ii) and Rs.9,29,063/- u/s 80P(2)(d) of the Act. He noticed that the Assessing Officer had not made any query in this regard to the assessee during the course of assessment proceedings and allowed the deduction of Rs.8,40,004/- u/s 80P(2)(a)(i) of the Act despite contravention of the assessee to the provisions of section 80AC of the Act.

5. He observed that the provisions of section 80AC were first brought in the statute vide Finance Act, 2006. He also referred to the CBDT Circular No.14/2006 dated 28.02.2006 & CBDT Circular No.8/2018, dated 26.12.2018 and various decisions. Since the assessee failed to file the return of income within the period prescribed u/s 139(1) of the Act, therefore, he was of the opinion that the deduction of Rs.8.40.004/- claimed u/s 80P(2)(a)(i) of the Act was not allowable as per provisions of section 80AC of the Act. Since the Assessing Officer, without any verification and without conducting any enquiry, accepted the assessee’s claim for deduction u/s 80P(2)(a)(i) of the Act and without considering the legal position, therefore, he held the order to be errone