Vishnuanna Patil Credit Co-operative Society Ltd. Vs ITO (ITAT Pune)
Wrong Section Selected in ITR Cannot Defeat Genuine Section 80P Claim – ITAT Directs CPC to Grant Full Deduction
The Pune ITAT held that a typographical error in selecting the wrong sub-clause of section 80P in the income-tax return cannot be a ground to deny an otherwise valid deduction. The Tribunal directed the Revenue to allow the full deduction claimed by the co-operative credit society.
The assessee, a credit co-operative society, had claimed deduction under section 80P. However, while filing the return, it inadvertently entered the deduction amount under section 80P(2)(c)(ii) instead of the correct provision, section 80P(2)(a)(i). Consequently, CPC either denied the deduction altogether or restricted it to ₹50,000 while processing the returns under section 143(1). Rectification applications under section 154 were also rejected.
The Tribunal first noted that the returns for both assessment years had been filed within the due date prescribed under section 139(1). Therefore, the CPC’s assumption that the return was belated was factually incorrect. It further observed that prior to 01.04.2021, CPC had no jurisdiction to make certain adjustments under section 143(1)(a)(v) relating to denial of Chapter VI-A deductions on the ground of delayed filing.
On merits, the ITAT found that the assessee was admittedly engaged in providing credit facilities to its members and was otherwise eligible for deduction under section 80P(2)(a)(i). The denial arose solely because the claim was entered in the wrong column of the ITR. Relying on judicial precedents holding that substantive benefits cannot be denied for technical or typographical mistakes, the Tribunal treated the error as a mistake apparent from the record.
Accordingly, the ITAT directed the Revenue authorities to grant the full deduction under section 80P(2)(a)(i) as claimed by the assessee for both years and allowed the appeals.
FULL TEXT OF THE ORDER OF ITAT PUNE
