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TMI Blog2024 (4) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... n of four years from the date of passing of intimation u/s 143(1) of the Act, i.e. from the year 2010 for holding the assesses application seeking rectification as barred by limitation. Also noted that the assessee had duly responded to the demand notices which were issued to it in consequence to the intimation made u/s 143(1) of the Act challenging it constantly and well within the period of four years of the intimation made on the assessee. It was only finally, when the AO did not do the needful with respect to the demand raised, that it ultimately moved an application in the year 2022 again seeking rectification in the intimation made u/s 143(1). Therefore, for all purposes, the assessee was all along, from the beginning since it became aware of some intimation having been made u/s 143(1), seeking rectification in the same, and therefore the rejection of its application as being time barred is not in conformity with law. The order of the ld. CIT(A) holding so, therefore, is set aside. We hold that the assessee s application seeking rectification of the intimation was well within the stipulated time and, therefore, needed to be entertained. On merits, assessee has demonstrated be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectification application filed u/s 154 of the Act to the Assessing Officer in identical facts and circumstances. 3. The assessee is a Co-operative Society engaged in the business of providing short term loans to its members. In short, it is a credit cooperative society providing credit facilities to its members. For all the impugned years, the assessee had filed returns of income claiming deduction of its entire income u/s 80P(2) of the Act, thus filing Nil return of income. For all the impugned years, i.e. AYs 2010-11 to 2013-14, intimation u/s 143(1) of the Act was made denying grant of deduction u/s 80P(2) of the Act and treating the income as income from other sources subjecting the same to tax. The details of the incomes returned to tax and assessed to tax for the respective assessment years are as under:- AY Business Income Deduction u/s 80P(2) of the Act Net income as per return Income assessed u/s 143(1) of the Act 2010-11 1,81,710 1,81,710 Nil 1,81,710 2011-12 2,00,210 2,00,210 Nil 2,00,210 2012-13 2,37,184 2,37,184 Nil 2,37,184 2013-14 2,83,490 2,83,490 Nil 2,83,490 4. Subsequently, demand notices were raised on the assessee, to which the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners Credit Co-op Society Ltd. Vs. I.T.O; (2022); Tax pub. (DT) 1025 and as per the Hon'ble Gujarat High Court's decision in the case of Surat Vankar Sahakari Sangh Ltd. Vs. C.I.T; 79 ITR 722. (ii) He should have also given direction to allow first Rs. 50,000/- from the taxable income as per the provisions of Sec. 80P(2)(c)(ii) of the I.T. Act, 1961. (iii) The Hon'ble CIT(A) should have also given direction to apply slab rate (first Rs. 10,000/-……10%; Rs. 10,000/- to Rs. 20,000/- ….20% and on balance 30%). The Ld. A.O has applied flat rate at 30% on entire income which is totally wrong. 4. The Hon'ble Pune Bench "A" Pune vide its order ITA No. 553/Pun/2023 dated 25/05/2023 in the case of Kai Fakira Jairam Patil Sahakari Patsanstha Maryadit Shahada allowed the deduction u/s. 80P(2)(a)(i). The Hon'ble Panji Bench of the Bombay High Court in T.A No. 76 of 2015 following the decision 377 ITR 275 dated 01/12/2015 allowed the deduction u/s. 80P(2)(a)(i). The Hon'ble Supreme Court has granted Special Leave Petition to the Department on 12/08/2016 (2016), 389 ITR (St.) 3. The Hon'ble Gujarat High Court has not allowed the ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification of the same u/s 154 of the Act was sought by the assessee vide letter dated 15.12.2022; that considering that the application seeking rectification was apparently filed beyond the period of four years from the end of the financial year in which the order sought to be rectified was passed, the application was treated to be barred by limitation and therefore not entertained by Assessing Officer in terms of Section 154(7) of the Act. Making his arguments, ld. Counsel for the assessee stated that the findings of the ld. AO/CIT(A) were incorrect for the reasons that:- (i) The intimation u/s 143(1) was never served on the assessee; (ii) It was only through demand notices which were issued to the assessee consequent to the intimation made u/s 143(1) of the Act that the assessee became aware of the intimation made, and therefore objected to the same within the time prescribed u/s 154(7) of the Act vide application dated 19.09.2014. Copy of the same was placed before us at Exhibit-B of the paper-book. Ld. Counsel for the assessee contended that vide this letter the assessee had pointed out to the Assessing Officer that no intimation u/s 143(1)(a) of the Act had been served t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee thereafter filed an application seeking rectification of the intimation again on 29.12.2022 which in turn was dismissed by the Assessing Officer as having been filed beyond the time prescribed for the same u/s 154(7) of the Act. The ld. Counsel for the assessee contended that considering its repeated attempts in the past to rectification, as demonstrated above, that too all within time, the rejection of the assessee's application for being barred by limitation was incorrect. 12. He further pointed out that even on merits it was not the case that the entire income returned by the assessee was by way of interest on FDs made in nationalized banks as noted by the Assessing Officer. That the assessee had also earned interest income from credit facilities provided to members and, therefore, there was a clear mistake apparent from record which needed to be entertained. In this regard, he placed copies of financial statements of the assessee for all the impugned years pointing out there from the aforesaid facts that the assessee had earned interest income, both from banks and also from credit facilities provided to members. 13. Per contra, ld. DR relied heavily on the order of the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of limitation of four years from the date of passing of intimation u/s 143(1) of the Act, i.e. from the year 2010 for holding the assesses application seeking rectification as barred by limitation. 16. Even otherwise, we have noted that the assessee had duly responded to the demand notices which were issued to it in consequence to the intimation made u/s 143(1) of the Act challenging it constantly and well within the period of four years of the intimation made on the assessee. It was only finally, when the Assessing Officer did not do the needful with respect to the demand raised, that it ultimately moved an application in the year 2022 again seeking rectification in the intimation made u/s 143(1) of the Act. Therefore, for all purposes, the assessee was all along, from the beginning since it became aware of some intimation having been made u/s 143(1) of the Act, seeking rectification in the same, and therefore the rejection of its application as being time barred is not in conformity with law. The order of the ld. CIT(A) holding so, therefore, is set aside. We hold that the assessee's application seeking rectification of the intimation was well within the stipulated time and, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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