CIT(A) can’t disallow Deduction claimed u/s 80P(2)(d) When Assessee filed Independent Auditor’s Report under Maharashtra Co-operative Societies Act: ITAT [Read Order]*******

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The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that CIT(A) can’t disallow deduction claimed u/s 80P(2)(d) of the Income Tax Act,1961 when assessee filed an independent auditor’s report under Maharashtra Co-operative Societies Act.

Neptune Snowden Peak Co-op. Housing Society Ltd, the assessee is a co-operative housing society, that had filed the return of income which was processed under section 143(1) of the Income Tax Act,1961 by the Deputy Commissioner of Income-tax, Central Processing Centre (CPC) who had disallowed the deduction claimed by the assessee amounting to Rs.5,24,583/- under section 80P(2)(d) of the Income-tax Act, 19061 ( “the Act”).

The CIT(A) confirmed the disallowance made by the Assessing Officer by dismissing the same. It was viewed that the CIT(A) dismissed the appeal on the technical ground that the assessee has failed to annex the Auditor’s Report along with the return of income under section 44AB of the Act before the prescribed date of filing. 

The assessee has brought on record system-generated acknowledgement along with an independent auditor’s report before the Tribunal. A Coram of ITAT comprising Shri Kuldip Singh (Judicial Member)held that when the assessee has filed the return of income well before the due date, but due to inadvertence, has not filed an independent auditor’s report, which it has filed later on cannot be denied.  

The Tribunal observed that the CIT(A) also has invoked the provisions contained under section 44AB of the Act that the assessee has not filed audited accounts under the Income-tax Act.  Since the assessee society is not required to file areport under section 44AB, the order passed by CIT(A) is not sustainable in the eyes of law. 

As the assessee has filed the independent auditor’s report under the Maharashtra Cooperative  Societies Act, 1960 the same is required to be examined by the Assessing Officer. The case is remanded back to the Assessing Officer to decide afresh after taking into account the independent auditor’s report and other documents brought on record by the assessee after providing the opportunity of being heard.To Read the full text of the Order CLICK HERE

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Neptune Snowden Peak Co-op. Housing Society Ltd,vs ITO Ward 26(1)(1)

Counsel for Appellant:   Shri Aditya Ramchandran

Counsel for Respondent:   Shri Anil Gupta


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