Mithibai College Employees Co Operative Credit Society Limited Vs ITO (ITAT Mumbai)
The appeal was filed by the assessee against the order dated 11.11.2025 passed by the National Faceless Appeal Centre (NFAC) for Assessment Year 2017-18, confirming penalty levied under Section 270A of the Income-tax Act.
The assessee, a co-operative credit society registered under the Maharashtra State Co-operative Societies Act, 1960, stated that it had inadvertently been allotted a PAN in the status of “Firm” instead of the correct status of a co-operative society/Association of Persons (AOP). Upon receipt of a notice under Section 148, the assessee submitted that it could not claim deduction under Section 80P(2)(d) because of the incorrect PAN status reflected in the system. During assessment proceedings, it claimed deduction under Section 80P(2)(d) in respect of interest income of ₹5,23,417 earned from Saraswat Co-operative Bank. The Assessing Officer disallowed the deduction, assessed the amount as taxable income, initiated penalty proceedings under Section 270A, and levied penalty for under-reporting of income in consequence of misreporting. The CIT(A) upheld the penalty.
Before the Tribunal, the assessee contended that it had neither concealed income nor furnished inaccurate particulars. It submitted that the incorrect PAN classification resulted from an error by the PAN issuing authority and that its legal status remained that of a co-operative society. According to the assessee, the incorrect PAN status created technical difficulty in filing the return and claiming deduction under Section 80P(2)(d). It argued that the failure to claim the deduction was bona fide, all material facts had been disclosed during assessment, and its explanation had not been found to be false. The assessee further contended that the show cause notice under Section 274 read with Section 270A referred only to “under-reporting of income”, whereas the penalty was ultimately imposed for “under-reporting of income in consequence of misreporting”, without specifying the applicable clause under Section 270A(9).
