July 2015
[2015] 153 ITD 613 (Pune) ITO, Ward 1(3), Jalna vs. MSEB Employees Coop Credit Society Ltd. A.Y. 2008-09 Date of Order – July 18th , 2014
By C. N. Vaze
Shailesh Kamdar
Jagdish T. Punja bi
Bhadresh Doshi Chartered Accountants
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Section 80P, read with section 154 – Where the assessee had not claimed a deduction in its return, which was rightfully available to him, the assessing officer is obliged, required to assist such an assessee by ensuring that only legitimate taxes are determined as collectible. Assessing officer cannot deny benefit of section 80P, even though the said claim is not made in the income tax return.
FACTS
The assessee, a Credit Co-operative Society, duly registered under Maharashtra Co-operative Societies Act, 1960, had filed its return of income without claiming deduction u/s. 80P(2)(a)(i). The return of income was processed u/s. 143(1) and accepted.
Subsequently, the assessee filed an application u/s. 154 requesting the Assessing Officer to allow deduction u/s. 80P(2)(a)(i). The Assessing officer rejected the application and denied the claim.
On appeal, the Commissioner (Appeals) on the point of rectification observed that due to technical difficulties in preparing the return in “Tax Base Software”, small clerical errors had led to incorrect filing of return. Further, due to errors in programming of the said software, although the deduction was not allowed in the e-return resulting into tax demand, the acknowledgement of e-return generated by the software resulted into Nil demand as the deduction was allowed. Therefore, the said mistake was rectifiable u/s. 154 by the Assessing Officer and while allowing the assessee’s claim, Commissioner (Appeals) held that even on merit, the assessee society was eligible for deduction u/s. 80P(2)(a)(i).
On departments appeal.
HELD
It is settled law that correct income of the assessee is to be assessed as per provisions of Income-tax Act, 1961, inspite of higher income incorrectly declared by the assessee in the return of income. If an assessee, under a mistaken belief, , misconception or on account of being not properly instructed returns higher income, the concerned authority is obliged, required to assist such an assessee by ensuring that only legitimate taxes are determined as collectible. If particular levy is not permissible, the tax cannot be collected. In view of above, the Commisioner (Appeals) was justified in holding that such a mistake is rectifiable u/s. 154 and the assessee society is eligible for deduction u/s. 80P(2)(a)(i) on merit as well.
