Suryakiran Co-operative Housing Service Society Ltd. Vs ITO (ITAT Ahmedabad)
Summary: The appeal was filed by the assessee, a co-operative society, against the order dated 29.10.2025 passed by the Addl./JCIT(A)-11, Delhi under Section 250 of the Income-tax Act, 1961 for Assessment Year 2024-25. The dispute concerned disallowance of deduction under Section 80P amounting to Rs. 5,59,600/-.
The assessee had filed its return of income on 03.07.2024 declaring Nil income after claiming deduction of Rs. 5,59,660/- under Section 80P. While processing the return under Section 143(1), the Central Processing Centre, Bengaluru, disallowed the Section 80P deduction and determined total income at Rs. 5,59,660/-. The assessee challenged the intimation before the learned CIT(A).
During the appellate proceedings, it was noticed that the assessee had exercised the option under Section 115BAD by filing Form No. 10-IF. The learned CIT(A) observed that exercise of the Section 115BAD option made the assessee ineligible to claim deduction under Section 80P and that the option could not subsequently be withdrawn. The assessee’s contention that Form No. 10-IF had been filed inadvertently was rejected by the CIT(A), who consequently confirmed the Section 80P disallowance.
Before the Tribunal, the assessee challenged the confirmation of the Section 80P deduction disallowance. The Tribunal examined Section 115BAD, including the provision that once the option is exercised, it cannot subsequently be withdrawn for the same or any other previous year.
The Tribunal recorded that it was an undisputed fact that the assessee had exercised the option under Section 115BAD by filing Form No. 10-IF. It accepted the assessee’s plea that Form No. 10-IF had been filed by mistake and directed the Assessing Officer to determine the tax as if Form No. 10-IF had not been filed and recompute the taxable income under the old regime, provided the assessee had not opted for the new regime in any previous year.
Accordingly, the appeal filed by the assessee was allowed for statistical purposes. The order was pronounced in the open Court on 22.07.2026.
Background of the Case
The assessee, a co-operative society, filed its return of income for Assessment Year 2024-25 on 03.07.2024. It declared Nil income after claiming a deduction of Rs. 5,59,660/- under Section 80P of the Income-tax Act, 1961.
During processing under Section 143(1), the CPC, Bengaluru, disallowed the deduction and assessed the total income at Rs. 5,59,660/-. The assessee thereafter preferred an appeal before the learned CIT(A).
Disallowance of Section 80P Deduction
The principal ground raised before the Tribunal was that the learned Commissioner of Income Tax (Appeals) had erred in confirming the disallowance of deduction under Section 80P amounting to Rs. 5,59,600/-, which the assessee requested should be allowed.
The dispute arose because the assessee had exercised the option under Section 115BAD by filing Form No. 10-IF. The Section 115BAD regime provides for taxation of eligible resident co-operative societies at the specified rate subject to the conditions prescribed in that section and restricts specified deductions, including deductions under Chapter VI-A other than the provisions expressly permitted.
TaxGuru’s publication on taxation of co-operative societies also discusses the Section 115BAD regime and the restrictions applicable when the option is exercised.
Section 115BAD and Form No. 10-IF
The order reproduces Section 115BAD of the Income-tax Act, 1961. Under sub-section (1), a resident co-operative society may, subject to the prescribed conditions, opt for computation of income tax at the rate of twenty-two per cent.
Section 115BAD(2) provides that, while computing total income under the option, specified deductions and exemptions are not available. This includes deductions under the provisions of Chapter VI-A other than Section 80JJAA.
Section 115BAD(5) further provides that the section does not apply unless the prescribed option is exercised on or before the due date specified under Section 139(1). The order specifically reproduces the proviso stating that once the option has been exercised for any previous year, it cannot subsequently be withdrawn for the same or any other previous year.
The supplied order records that the assessee had exercised the Section 115BAD option by filing Form No. 10-IF. The assessee’s position was that the form had been filed inadvertently.
Findings of the CIT(A)
The learned CIT(A) observed that once the assessee had exercised the option under Section 115BAD, it became ineligible to claim deduction under Section 80P. The CIT(A) also rejected the assessee’s contention that Form No. 10-IF had been filed inadvertently.
On that basis, the CIT(A) confirmed the action of the CPC in disallowing the Section 80P deduction.
ITAT Ahmedabad’s Findings
The Tribunal examined the material available on record and recorded that it was undisputed that the assessee had exercised the option under Section 115BAD by filing Form No. 10-IF.
The Tribunal accepted the plea of the assessee that Form No. 10-IF had been filed by mistake. It consequently directed the Assessing Officer to determine the tax as if Form No. 10-IF had not been filed and to recompute the taxable income under the old regime.
The Tribunal, however, made the direction subject to the condition that the assessee had not opted for the new regime in any previous year.
Decision of the Tribunal
On the basis of its finding regarding the inadvertent filing of Form No. 10-IF, the Tribunal granted relief by directing recomputation of the taxable income under the old regime, subject to the condition recorded in the order.
The appeal was accordingly allowed for statistical purposes.
The order was pronounced in the open Court on 22.07.2026.
Conclusion
ITAT Ahmedabad dealt with the disallowance of Section 80P deduction following the assessee’s exercise of the Section 115BAD option through Form No. 10-IF. While the CIT(A) had confirmed the disallowance on the ground that the option made the assessee ineligible for the deduction and could not be withdrawn, the Tribunal accepted the assessee’s plea that Form No. 10-IF had been filed by mistake. The Tribunal therefore directed the Assessing Officer to determine the tax as if the form had not been filed and recompute taxable income under the old regime, provided the assessee had not opted for the new regime in any previous year. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the Assessee against the order dated 29.10.2025 passed by the Addl./JCIT(A)-11, Delhi (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’ in short) for Assessment Year 2024-25.
2. The Assessee has raised the following grounds of Appeal:-
1. The Learned Commissioner of Income Tax (Appeals) erred in law and on facts in confirming the section 80P deduction disallowance of Rs.5,59,600/- such deduction is requested to be allowed.
3. The facts of the case are that the assessee, a co-operative society, filed its return of income for the Assessment Year 2024-25 on 03.07.2024 declaring Nil income after claiming deduction of Rs.5,59,660/- under section 80P of the Income-tax Act, 1961. While processing the return under section 143(1) of the Act, the Central Processing Centre (CPC), Bengaluru, disallowed the deduction claimed under section 80P and assessed the total income at Rs.5,59,660/- Aggrieved by the intimation issued under section 143(1) of the Act, the assessee preferred an appeal before the learned CIT(A). During the appellate proceedings, it was noticed that the assessee had exercised the option under section 115BAD by filing Form No. 10-IF. The Ld.CIT(A) observed that once the option under section 115BAD is exercised, the assessee becomes ineligible to claim deduction under section 80P and such option cannot be withdrawn. The contention of the assessee that Form No. 10-IF had been filed inadvertently was also rejected. Accordingly, the Ld.CIT(A) confirmed the action of the CPC in disallowing the deduction under section 80P.
4. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal.
The provisions reads as under: Tax on income of certain resident co-operative societies. Finance Act, 2020, w.e.f. 1-4-2021:
115BAD. (1) Notwithstanding anything contained in this Act but subject to the provisions of this Chapter, the income-tax payable in respect of the total income of a person, being a co-operative society resident in India, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2021, shall, at the option of such person, be computed at the rate of twenty-two per cent, if the conditions contained in sub-section (2) are satisfied:
Provided that where the person fails to satisfy the conditions contained in sub-section (2) in computing its income in any previous year, the option shall become invalid in respect of the assessment year relevant to that previous year and subsequent assessment years and other provisions of the Act shall apply, as if the option had not been exercised for the assessment year relevant to that previous year and subsequent assessment years.
(2) For the purposes of sub-section (1), the total income of the co-operative society shall be computed,—
(i) without any deduction under the provisions of section 10AA or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause
(iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or under any of the provisions of Chapter VI-A other than the provisions of section 80JJAA;
(ii) without set off of any loss carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); and
(iii) by claiming the depreciation, if any, under section 32, other than clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed.
(3) The loss and depreciation referred to in clause (ii) of sub-section (2) shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year: Provided that where there is a depreciation allowance in respect of a block of asset which has not been given full effect to prior to the assessment year beginning on the 1st day of April, 2021, corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2020 in such manner as may be prescribed, if the option under sub- section (5) is exercised for a previous year relevant to the assessment year beginning on the 1st day of April, 2021.
(4) In case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA, which has exercised option under sub-section (5), the conditions contained in sub- section (2) shall be modified to the extent that the deduction under the said section shall be available to such Unit subject to fulfilment of the conditions contained in that section.
Explanation.—For the purposes of this sub-section, the term “Unit” shall have the meaning assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).
(5) Nothing contained in this section shall apply unless option is exercised by the person in such manner as may be prescribed on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for any previous year relevant to the assessment year commencing on or after the 1st day of April, 2021 and such option once exercised shall apply to subsequent assessment years:
Provided that once the option has been exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year.
5. I have gone through the material available on record. It is an undisputed fact that the assessee exercised the option under section 115BAD by filing Form No. 10-IF. The plea of the assessee that Form No. 10-IF was filed by mistake can be accepted. The Assessing Officer shall determine the tax as if Form No. 10-IF has not been filed and recompute the taxable income under the old regime provided the assessee has not opted for the new regime in any previous year.
6. In the result, the appeal filed by the assessee is allowed for statistical purposes.
The order pronounced in the open Court on 22.07.2026
