2024 (1) TMI 358 - AT - Income Tax

Deduction u/s 80P - deduction claimed by the assessee was denied in the intimation generated u/s 143(1) on the reasoning that the relevant columns in the return of income tax were not properly filed up - assessee against such denial of its claim filed rectification application u/s 154 which was also denied in the order passed u/s 154 - HELD THAT - It is the settled position of law that the income has to be computed by the assessee as per the provision of Act. To our understanding, if there is any mistake on the part of the assessee for claiming the legitimate deduction, it is the onus upon the revenue to rectify the same. As such the revenue cannot take the shelter of the ignorance of the assessee by denying the legitimate benefit to the assessee. CIT(A), was bound to follow the verdict of Esar Coste 2004 (12) TMI 62 - GUJARAT HIGH COURT In the event of noncompliance of Hon ble Jurisdictional High Court, it amounts to a mistake apparent from the record and therefore the same can be rectified u/s 154 of the Act. None of the authorities below has gone to verify the genuineness of the claim of the assessee whether it was within the provision of law. Thus, for the limited purpose, we are delegating the issue to the file of the AO for fresh adjudication to the extent to find out whether the interest in dispute has been earned from the co-operative society and from other sources. As such, the AO shall verify the deduction claimed by the assessee within the provisions of section 80P(d)/80P2(c)(ii) of the Act. Hence, the ground of appeal of the assessee is allowed for the statistical purposes.

Summary

Issues involved:
The appeal filed against the order of the Learned Commissioner of Income Tax (Appeals) regarding the denial of claim made under section 80P of the Income Tax Act for the Assessment Year 2018-2019.

Summary:

Issue 1: Denial of claim under section 80P of the Act by Ld. CIT(A)

The assessee, a cooperative housing society, claimed a deduction under section 80P of the Act in the return filed under section 139. However, the claim was denied in the intimation under section 143(1) due to alleged improper filling of Sch. VIA. The rectification application under section 154 was also denied, stating that the deduction was not allowable for a status other than a cooperative society. The Ld. CIT(A) upheld the denial, stating that the columns in the return were not properly filled up, rejecting the claim under section 80P(2)(d) of the Act.

Issue 2: Appeal before ITAT

The assessee appealed before the ITAT, arguing that the deduction claimed under section 80P(2)(d) and 80P(2)(c)(ii) was legitimate. The Ld. AR contended that the deduction should not be denied solely based on improper filling of columns in the return. The Ld. DR argued that there was no apparent mistake to be rectified under section 154, supporting the lower authorities' decision.

Judgment:

After considering the contentions of both parties and the records, the ITAT found that the assessee had shown the deduction claimed under section 80P(2)(d) and 80P(2)(c) in the computation of income. The ITAT noted that the Ld. CIT(A) denied the benefit to the assessee based on a defect in the return, without questioning the submissions regarding the deduction's availability supported by judgments. Citing the decision of the Hon'ble Gujarat High Court, the ITAT held that the revenue cannot deny legitimate benefits to the assessee due to the assessee's mistake, emphasizing the revenue's duty to rectify any mistakes. The ITAT directed the AO to verify the genuineness of the claim and the compliance with the provisions of section 80P(d)/80P2(c)(ii) for fresh adjudication. Consequently, the appeal was allowed for statistical purposes.

Conclusion:

The ITAT allowed the appeal filed by the assessee against the denial of the claim under section 80P of the Act, directing the AO to verify the deduction claimed within the provisions of the law for fresh adjudication.