S. 80P Benefits cannot be Denied to Registered Housing Society in absence of Cancellation by Registrar: ITAT Deletes Addition [Read Order]

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the benefits under Section 80P cannot be denied to registered housing society as the registration was not cancelled by the registrar and deleted the addition.

MIG Co-op Housing Society Group II Ltd (assessee) filed its return for Assessment Year 2014-15. During the assessment proceedings, the Assessing Officer (AO) took up the issue of deductions claimed under Section 80P(2)(d) and Section 80P(2)(c) of the Income Tax Act.

The AO invoked the provisions of Section 80P(2)(f) to deny the society these benefits, resulting in a disallowance of ₹95,83,143. This disallowance contributed to the final assessed income being determined at ₹19,68,42,830.

Aggrieved by the AO's order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) accepted the contentions of the assessee and allowed the appeal.

Aggrieved by the CIT(A)’s order, the revenue filed appeal before the ITAT. The Revenue argued that the deduction under Section 80P(2)(d) was only allowable for deposits made with co-operative societies, not co-operative banks, citing Supreme Court precedents.

The two-member bench comprising Amit Shukla (Judicial Member) and Arun Khodpia (Accountant Member) noted that the Registrar of Co-operative Housing Society had not cancelled the registration of the assessee on any grounds of violating bye-laws or the principle of mutuality.

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The Bench observed that the various sub-sections of Section 80P deal with different types of claims and operate in independent fields. It held that the provisions of one sub-section cannot be imported to restrict or deny a claim made under another.

The tribunal found that this specific issue was squarely covered by the decisions in the assessee’s own case for A.Y. 2011-12. It concluded that there was no reason to deviate from the earlier findings and held that the CIT(A) was right in allowing the deductions.

The CIT(A)’s deletion of disallowance was upheld. The grounds raised by the Revenue regarding the Section 80P disallowance were dismissed.

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