Unnat Nagar CHS Ltd. Vs PCIT (ITAT Mumbai)
Summary: The ITAT Mumbai allowed the appeal of Unnat Nagar CHS Ltd. and set aside the PCIT’s revisionary order under Section 263 for Assessment Year 2020-21. The assessee had not filed an original return under Section 139(1). Following information regarding deposits with Saraswat Co-op Bank and NKGSB Co-operative Bank, proceedings were initiated under Section 148, and the assessee filed its return declaring interest income and claiming deduction of Rs. 20,26,566 under Section 80P(2)(d). The Assessing Officer examined the claim and accepted the returned income. The PCIT subsequently invoked Section 263, holding that since no return had been filed under Section 139(1), the deduction was barred by Section 80AC.
The Tribunal held that Section 80AC and Section 148(2) must be read together. Section 148(2) provides that a return filed pursuant to a notice under Section 148 is to be treated as a return required to be furnished under Section 139, provided it is furnished within the period specified in the notice. Since the assessee filed its return on 12.04.2024 within the time prescribed in the Section 148 notice dated 18.03.2024, the requirement of Section 80AC was satisfied.
The Tribunal also rejected the Revenue’s reliance on CIT Vs Sun Engineering Works (P) Ltd. It distinguished a reassessment following an earlier completed assessment from the present case, where no original return or assessment existed. Further, the Section 80P(2)(d) claim related directly to interest earned on the very bank deposits forming the subject matter of the Section 148 proceedings. Therefore, the Supreme Court ruling supported rather than defeated the assessee’s case.
