2021 (10) TMI 867 - AT - Income Tax

Claim of deduction u/s 80P(2)(d) - interest income received from Co-operative Bank - assessee has not made claim of deduction u/s 80P in the return of income - HELD THAT - Where claim of deduction under section 10A/10AA/10B/10BA or any provisions of Chapter VIC is not made in the return of income, the deduction shall not be allowed to the assessee. In the present case the assessee has claimed deduction under section 80P(2)(d) of the Act in respect of interest income from Co-operative Bank by way of note during assessment proceedings. Section 80P falls under Chapter VI-C, therefore, the provisions of section 80A(5) precludes the assessee to make claim of deduction under section 80P from any other mode other than the return of income. It would be relevant to mention here that this appeal was refixed for hearing especially to give an opportunity to the ld.Authorized Representative of the assessee to make his submissions to counter the provisions of section 80A(5) of the Act. The ld.Authorized Representative of the assessee filed a Paper Book giving written submissions and giving list of case laws primarily on admission of additional ground and new claim legally admissible during appellate proceedings. In the present case even though the assessee s claim of deduction under section 80P(2)(d) of the Act is allowable, however, since the assessee has failed to qualify the additional condition imposed by section 80A(5), the assessee would not be entitled to claim said deduction, even if, otherwise the assesssee is eligible for deduction under section 80P(2)(d) From literal interpretation of provisions of Section 80A(5) it is explicitly clear that for claiming deduction under Chapter VIC, the precondition is making claim of deduction in the return of income.- Decided against assessee.

Summary

Issues Involved:
1. Disallowance of deduction under section 80P(2)(d) of the Income Tax Act, 1961.
2. Rejection of deduction under section 80P(2)(c) of the Income Tax Act, 1961.
3. Admissibility of fresh claims during appellate proceedings.

Detailed Analysis:

1. Disallowance of Deduction under Section 80P(2)(d):
The primary issue in the appeals was the disallowance of the assessee's claim for deduction under section 80P(2)(d) in respect of interest income received from deposits with a Co-operative Bank. The assessee, a Co-operative Housing Society, did not disclose this interest income in its return of income and claimed the deduction during scrutiny assessment proceedings. The Assessing Officer rejected this claim on the grounds that it was not made in the return of income, and the CIT(A) upheld this decision, citing section 80A(5) of the Act, which bars claims not made in the return of income.

2. Rejection of Deduction under Section 80P(2)(c):
The assessee also raised a ground against the rejection of its claim for deduction under section 80P(2)(c). However, the primary focus of the judgment was on the disallowance under section 80P(2)(d).

3. Admissibility of Fresh Claims During Appellate Proceedings:
The assessee argued that fresh claims could be made before appellate authorities even if not claimed in the return of income, citing several judicial precedents. The Tribunal acknowledged that appellate authorities have the power to admit additional grounds if the facts are already on record and no new evidence is required. However, it emphasized that this does not override statutory provisions like section 80A(5), which precludes claims not made in the return of income.

Tribunal's Findings:
- The Tribunal reiterated the provisions of section 80A(5), which explicitly state that deductions under Chapter VI-C, including section 80P, must be claimed in the return of income. Failure to do so bars the assessee from making such claims later.
- The Tribunal noted that the judgments cited by the assessee predated the insertion of section 80A(5) and did not consider its implications.
- The Tribunal referenced the Hon'ble Bombay High Court's decision in EBR Enterprises vs. Union of India, which upheld the statutory requirement of claiming deductions in the return of income and dismissed claims made otherwise.

Conclusion:
The Tribunal dismissed both appeals, affirming that the assessee's failure to claim deductions under section 80P in the return of income precluded them from making such claims during assessment or appellate proceedings. The judgment underscores the importance of adhering to statutory provisions, specifically section 80A(5), which mandates that claims for deductions under Chapter VI-C must be made in the return of income.