Cooperative Cane Development Society Ltd Titavi vs Assessment Unit Income Tax Department

PER MANISH AGARWAL, A.M.:

The present appeal is filed by assessee against the order dated 24.10.2025 passed by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld. CIT(A)”] in Appeal No. NFAC/2021-22/10324371 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 05.03.2024 passed u/s 143(3) r.w.s. 144B of the Act pertaining to Assessment Year 2022-23.

Brief facts of the case are that the assessee company filed has its return of income on 24.09.202, declaring total income of INR 10,96,250/-. The assessee society is doing business of marketing of sugar cane grown by its members and claimed deduction u/s 80P(2)(a)(iii) of the Act. The AO observed that the assessee has claimed deduction u/s 80P(2)(a)(iv) in the return of income filed which is available for income from purchasing agricultural implements, seeds, livestock, or other agricultural supplies for the purpose of supplying them to its members and therefore, denied the deduction to the assessee.

Against the said order, the assessee filed in appeal before Ld. CIT(A) who vide impugned order dated 24.10.2025, dismissed the appeal of the assessee by holding that the assessee has claimed the deduction u/s 80P(2)(a)(iv) of the Act instead of the correct section i.e. u/s 80P(2)(a)(iii) of the Act as it is engaged in marketing of the agricultural produce grown by their members.

Aggrieved by the order of Ld. CIT(A), assessee is in appeal before the Tribunal by taking various grounds of appeal mentioned in the appeal memo.

Before us, Ld.AR for the assessee submits that since the assessee is a co-operative society marketing the agricultural produce of sugar cane and other related products by its members and get the commission which is eligible for deduction u/s 80P(2)(a)(iii) of the Act. In this regard, reliance is placed on the judgement in the case of Co-operative Cane Development Society Ltd., Morna vs Assessing Officer, NFAC, Delhi in ITA No.5764/Del/2024 for Assessment Year 2020-21 dated 05.06.2025.

On the other hand, Ld. Sr. DR for the Revenue vehemently supported the order of the AO and Ld. CIT(A) and requested that the assessee has not claimed deduction u/s 80P(2)(iii) of the Act therefore, the lower authorities has rightly denied the deduction and he prayed accordingly.

Heard the contentions of both the parties at length and perused the material available on records. Admittedly, the assessee is engaged in the business of marketing of agricultural produce grown by its members and eligible for deduction u/s 80P(2)(iii) of the Act. Inadvertently, in the return of income filed, e deduction was wrongly claimed u/s 80P(2)(iv) as against filling the details for correct section i.e. u/s 80P(2)(iii) of the Act. The AO while disallowing the same has observed that the assessee society had failed to furnish the break-up details of all interest income/receipts, the details of deduction claimed u/s.80P along with supporting documentary evidences, computation of total income statement etc. Hence, in the absence of details furnished with respect to the claim of deduction u/s.80P was denied. Before the Ld. CIT(A), assessee made the correct claim of deduction u/s 80P(2)(a)(iii) by stating that the same was inadvertently claimed under wrong section in the ITR filed and, therefore, requested for allowing the deduction u/s 80P(2)(iii) of the Act. However, Ld. CIT(A) has not accepted the claim made by the assessee and dismissed the same by observing that the assessee has failed to filed any details or evidences. It is true that the assessee is engaged in the business of providing marketing services of agricultural produces of its members and since inception was claiming deduction u/s 80P(2)(3) of the Act which was allowed to it. Solely for the reason that in the instant year, due to inadvertent error, deduction was wrongly claimed under incorrect section in the ITR filed and no details were filed, it was denied. It is settled law that when a correct claim was made before the appellate authority, it is the duty of the appellate authority to allow the same in accordance with the provisions of law.

The Hon’ble Apex Court in the case of Goetz India Ltd. vs CIT reported in (2006) 284 ITR 323 (SC) has held that no fresh claim could be made before the AO otherwise than by way of revised return however, the Hon’ble Court further clarified that decision is limited to the power of the assessing authority and does not impinge on the power of appellate authorities. In the case of CIT v. Jai Parabolic Springs Ltd. reported in (2008) 306 ITR 42 (Delhi) the AO disallowed the claim of the assessee on the ground that “since the claim for the deferred revenue expenditure of INR 15,58,500/- was not claimed by the assessee in the return of income for the assessment year 1990-91, the same is not allowed”. Their Lordships after considering the decision of Hon’ble Apex Court in the case of Goetze (India) Ltd. (supra) has held as under (Head note)

The CBDT as back as in 1955 issued a circular No. 14(XL-35), dated 11th April, 1955 wherein the Board has recognized the fact that responsibility for claiming refunds and relief rests with the assessee as imposed by law, even then the Board has directed the officers to draw the attention of the assessee in respect of any refunds or reliefs to which they are eligible and have not claimed for some reason or other. The Board later issued Circular F.No. 81/27/65-IT(B) dated 18.05.1965, defining the duties of PROs in providing assistance to the public in filing correct return and making eligible claims.

As observed above, in the instant case the assessee was otherwise eligible for deduction u/s 80P(2)(iii) of the Act which was not allowed as in the return of income, deduction was inadvertently claimed under wrong section and further the assessee society had not furnished the break-up of interest income/receipts with supporting documentary evidences etc. Thus, looking to the entirety of facts when it is not in dispute that the assessee is entitled for deduction claimed u/s 80P(2A)(iii) of the Act and was allowed consistently in preceding as well as in subsequent Assessment Years, therefore, as a principal of consistency, Ld. CIT(A) ought to have allowed the deduction u/s 80P(2)(iii) as claimed by the assessee, made under correct section and therefore, we hereby allow the deduction u/s 80P(2)(iii) of the Act to the assessee however, since no details were furnished by the assessee in support of the quantum of deduction claimed therefore, for the purpose of correctness of the claim, the matter is remitted to the file of the AO with the directions to verify the same with the help of financial statements and the working of the deduction claimed by the assessee. Assessee is also directed to file all the necessary evidences before the AO to justify the claim of deduction u/s 80P(2)(iii) of the Act. With these directions , all Grounds of appeal raised by the assessee are allowed for statistical purposes.

In the result, appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 15.07.2026.