Section 80P(2)(a)(i) Deduction cannot be denied without Substantiated Reasoning

The Presbyterian Churc Co. Operating Credit & Thrift Society Ltd. Vs ITO (ITAT Jaipur)

Section 80P(2)(a)(i) deduction cannot be denied without specifying how the claim of the assessee is not correctly claimed & for motioning  status as AOP

In a recent case before the Income Tax Appellate Tribunal (ITAT) in Jaipur, The Presbyterian Church Co. Operating Credit & Thrift Society Ltd. brought to light an issue regarding the denial of a deduction under Section 80P(2)(a)(i) of the Income Tax Act. The dispute revolved around the correct filing of the deduction claim and the categorization of the society’s status.

The crux of the matter lay in the fact that the assessee’s claim for deduction was rejected by the Assessing Officer, purportedly due to inaccuracies in the filing and a discrepancy in the mentioned status. However, upon closer examination, it was revealed that the claim was indeed correctly made in the Income Tax Return (ITR), and the mentioned status of Association of Persons (AOP) did not disqualify the assessee from claiming the deduction.

The ITAT’s decision underscored the importance of fair and transparent tax administration. It emphasized that denial of deductions should not be based on mere assumptions or technicalities but should be substantiated with clear reasoning. In this case, the tribunal ruled in favor of the assessee, directing the Assessing Officer to allow the claim of deduction under Section 80P(2)(a)(i) as per the ITR filed.

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