2021 (6) TMI 922 - AT - Income Tax

Revised claim made by the assessee in course of assessment proceedings - Disallowance of deduction claimed u/s 80P(2)(d) - HELD THAT - The issue is no more res integra. Now it is fairly well settled that assessee can make a fresh/revised claim not only before the assessing officer, but even before the appellate authorities. In fact, in the decision of the Hon ble Apex Court relied upon by the assessing officer and learned Commissioner of Income Tax (Appeals), it has been made clear that there is no fetter on the appellate authority to consider a revised/fresh claim of the assessee. In case of CIT vs Prithvi Brokers Shareholders 2012 (7) TMI 158 - BOMBAY HIGH COURT the Hon ble jurisdictional High Court has held that the assessee can make a revised/fresh claim in course of proceedings before the assessing officer and appellate authorities. Denial of assessee s claim of deduction under section 80P(2)(d) is interest was earned from a co-operative bank - In our view, the aforesaid reasoning of the assessing officer would not hold water as in various case laws cited by the learned counsel for the assessee, the Tribunal has taken a consistent view that co-operative banks are primarily co-operative societies; hence, any interest/dividend earned from such co-operative banks would be eligible for deduction under section 80P(2)(d) of the Act. - Decided in favour of assessee.

Summary

Issues: Disallowance of deduction claimed under section 80P(2)(d) of the Income Tax Act, 1961 for an amount of ?20,79,677.

Issue 1: Acceptance of Revised Claim
The appellant contested the disallowance of deduction under section 80P(2)(d) for an amount of ?20,79,677, primarily on the grounds that the claim was not made in the original or revised return of income. The assessing officer disallowed the claim, which was upheld by the Commissioner of Income Tax (Appeals). However, the appellant argued that it is a well-settled principle that a fresh claim can be made during assessment proceedings or before appellate authorities. The Tribunal noted that there is no restriction on considering revised or fresh claims by the appellate authority, citing the decision in CIT vs Prithvi Brokers & Shareholders (2012) 23 taxmann.com 23. Consequently, the Tribunal allowed the appellant's revised claim, emphasizing the flexibility in allowing such claims during proceedings.

Issue 2: Eligibility of Deduction under Section 80P(2)(d)
The main contention revolved around whether the interest income earned from deposits with a co-operative bank is eligible for deduction under section 80P(2)(d) of the Act. The assessing officer disallowed the claim based on the premise that only interest/dividend income received from co-operative societies would qualify for the deduction. However, the Tribunal disagreed with this reasoning, citing various case laws presented by the appellant's counsel. The Tribunal noted that co-operative banks are essentially co-operative societies, and therefore, any interest/dividend earned from such banks should be eligible for deduction under section 80P(2)(d) of the Act. Consequently, the Tribunal allowed the appellant's claim of deduction, leading to the deletion of the earlier addition made by the assessing officer. The grounds related to this issue were allowed, and the appeal was partly allowed.

In conclusion, the Appellate Tribunal ITAT Mumbai ruled in favor of the appellant, allowing the deduction claimed under section 80P(2)(d) of the Income Tax Act, 1961. The judgment highlighted the flexibility in accepting revised claims during assessment proceedings and emphasized the eligibility of interest income earned from deposits with co-operative banks for such deductions.