The CPC taxed my society's receipts from members. Can I get that corrected under section 154, or have I lost the claim by not making it in the return?
Section 154 will not carry it. The Mumbai Tribunal agreed with the Assessing Officer and the CIT(A) that mutuality and eligibility under s.80P require examination of foundational facts and cannot be a mistake apparent from the record. But the claim was not lost: Goetze (India) restricts only the Assessing Officer, not the appellate authorities, so the Tribunal restored the matter to the Assessing Officer to examine the claim on merits.
Decided by the ITAT (Pawan Singh, Judicial Member and Makarand Vasant Mahadeokar, Accountant Member (SMC Bench, Mumbai)) on 2026-03-27, reported as ITA Nos. 111, 112 and 113/Mum/2026, assessment years 2018-19, 2019-20 and 2020-21 (ITAT Mumbai); the running header inside the order reads 111 to 113/Mum/2025. It bears on section 154, section 143(1), section 80P, section 80P(2)(f), section 250, section 254 of the Income Tax Act 1961, in Deductions & Disallowances, Co-operative Societies, Appeals and Assessment & Scrutiny matters.
This is both halves of the line in one recent order. The Revenue's half is that a claim needing verification of the nature of receipts, the identity of contributors and participators and the use of funds is not apparent from the record, however strong it may be on merits. The taxpayer's half is that the failure of the s.154 route does not end the matter, because the appellate authorities have wide and coterminous powers and Goetze (India) expressly says its holding is limited to the power of the assessing authority and does not impinge on the Tribunal's power under s.254. The practical result is a remand with a direction confining the Assessing Officer to the restored issues.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
Read aloud by your device. Press again to stop.
The assessee is a co-operative housing society. For assessment years 2018-19, 2019-20 and 2020-21 the returns were processed under s.143(1), the Centralized Processing Centre disallowing the deduction claimed under s.80P(2)(f) and computing taxable income accordingly. The society then filed applications under s.154 before the Assessing Officer seeking rectification of the intimations, contending that receipts from members towards maintenance and other common facilities had been erroneously offered as income and, being governed by the principle of mutuality, did not constitute taxable income at all. The Assessing Officer rejected the applications for all three years, recording that the allowability of the s.80P deduction and the applicability of mutuality was not a mistake apparent from the record but a debatable issue requiring examination on the merits. The CIT(A), National Faceless Appeal Centre, upheld that, holding that the issue involved examination of the nature of the receipts and could not be adjudicated within the limited scope of s.154, and relying on Goetze (India) Ltd. v. CIT (284 ITR 323). Before the Tribunal the society pointed to its Income and Expenditure Account, its total receipts and its audited financial statements at pages of the paper book, and contended that once the audited accounts formed part of the record the claim was self-evident.
All three appeals were allowed for statistical purposes (para 29). The Tribunal concurred with the lower authorities that the scope of s.154 is confined to rectification of mistakes apparent from the record and that mutuality and s.80P eligibility, requiring examination of the nature of receipts, the identity of contributors and participators and the utilisation of funds, involve verification of facts and application of legal principles and cannot be a mistake apparent from the record (para 21). However, the denial of relief had occurred on the technical limitation of s.154 and not on any adjudication of the claim on merits (para 25), and Goetze (India) restricts only the Assessing Officer and does not impinge on the powers of the appellate authorities (paras 23 and 24). The impugned orders were set aside and the matter restored to the jurisdictional Assessing Officer for fresh adjudication on merits, with the direction that he confine himself to the issues arising from these appeals and not expand the scope of the proceedings (paras 26 to 28).
The Tribunal framed the limited issue as whether the mutuality and s.80P claim could have been entertained in s.154 proceedings and, if not, what consequential relief was warranted (para 20). On the first limb it agreed with the lower authorities, because the claim required foundational fact-finding (para 21). On the second it found substance in the submission that all relevant facts had been placed before the CIT(A) and a specific ground taken, and that the appellate authority has wide and coterminous powers to examine a claim on merits (para 22). It then read Goetze (India) properly, quoting the Supreme Court's own limitation of its holding to the power of the assessing authority, and concluded that while the Assessing Officer may be constrained from entertaining a fresh claim otherwise than by a revised return, that restriction does not operate on the appellate authorities where the relevant facts are on record (paras 23 and 24). Since the audited financial statements prima facie showed a co-operative housing society receiving contributions from its members, and the questions of mutuality and s.80P eligibility needed factual verification, the just course was a remand (paras 25 and 26).
Such an exercise involves verification of facts and application of legal principles and therefore cannot be said to be a mistake apparent from record amenable to rectification under section 154 of the Act.
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppSection 154 will not carry it. The Mumbai Tribunal agreed with the Assessing Officer and the CIT(A) that mutuality and eligibility under s.80P require examination of foundational facts and cannot be a mistake apparent from the record. But the claim was not lost: Goetze (India) restricts only the Assessing Officer, not the appellate authorities, so the Tribunal restored the matter to the Assessing Officer to examine the claim on merits. This was decided by the ITAT (Pawan Singh, Judicial Member and Makarand Vasant Mahadeokar, Accountant Member (SMC Bench, Mumbai)) and bears on section 154, section 143(1), section 80P, section 80P(2)(f), section 250, section 254 of the Income Tax Act 1961. It is reported as ITA Nos. 111, 112 and 113/Mum/2026, assessment years 2018-19, 2019-20 and 2020-21 (ITAT Mumbai); the running header inside the order reads 111 to 113/Mum/2025. This is both halves of the line in one recent order. The Revenue's half is that a claim needing verification of the nature of receipts, the identity of contributors and participators and the use of funds is not apparent from the record, however strong it may be on merits. The taxpayer's half is that the failure of the s.154 route does not end the matter, because the appellate authorities have wide and coterminous powers and Goetze (India) expressly says its holding is limited to the power of the assessing authority and does not impinge on the Tribunal's power under s.254. The practical result is a remand with a direction confining the Assessing Officer to the restored issues. If it applies to you, the first step is this: Do not put a mutuality or s.80P claim into a s.154 application against an intimation and expect it to succeed; the fact-finding it needs takes it outside the section.
The assessee is a co-operative housing society. For assessment years 2018-19, 2019-20 and 2020-21 the returns were processed under s.143(1), the Centralized Processing Centre disallowing the deduction claimed under s.80P(2)(f) and computing taxable income accordingly. The society then filed applications under s.154 before the Assessing Officer seeking rectification of the intimations, contending that receipts from members towards maintenance and other common facilities had been erroneously offered as income and, being governed by the principle of mutuality, did not constitute taxable income at all. The Assessing Officer rejected the applications for all three years, recording that the allowability of the s.80P deduction and the applicability of mutuality was not a mistake apparent from the record but a debatable issue requiring examination on the merits. The CIT(A), National Faceless Appeal Centre, upheld that, holding that the issue involved examination of the nature of the receipts and could not be adjudicated within the limited scope of s.154, and relying on Goetze (India) Ltd. v. CIT (284 ITR 323). Before the Tribunal the society pointed to its Income and Expenditure Account, its total receipts and its audited financial statements at pages of the paper book, and contended that once the audited accounts formed part of the record the claim was self-evident. The matter was decided on 2026-03-27 by the ITAT (Pawan Singh, Judicial Member and Makarand Vasant Mahadeokar, Accountant Member (SMC Bench, Mumbai)). On those facts the ITAT held as follows. All three appeals were allowed for statistical purposes (para 29). The Tribunal concurred with the lower authorities that the scope of s.154 is confined to rectification of mistakes apparent from the record and that mutuality and s.80P eligibility, requiring examination of the nature of receipts, the identity of contributors and participators and the utilisation of funds, involve verification of facts and application of legal principles and cannot be a mistake apparent from the record (para 21). However, the denial of relief had occurred on the technical limitation of s.154 and not on any adjudication of the claim on merits (para 25), and Goetze (India) restricts only the Assessing Officer and does not impinge on the powers of the appellate authorities (paras 23 and 24). The impugned orders were set aside and the matter restored to the jurisdictional Assessing Officer for fresh adjudication on merits, with the direction that he confine himself to the issues arising from these appeals and not expand the scope of the proceedings (paras 26 to 28).
The Tribunal framed the limited issue as whether the mutuality and s.80P claim could have been entertained in s.154 proceedings and, if not, what consequential relief was warranted (para 20). On the first limb it agreed with the lower authorities, because the claim required foundational fact-finding (para 21). On the second it found substance in the submission that all relevant facts had been placed before the CIT(A) and a specific ground taken, and that the appellate authority has wide and coterminous powers to examine a claim on merits (para 22). It then read Goetze (India) properly, quoting the Supreme Court's own limitation of its holding to the power of the assessing authority, and concluded that while the Assessing Officer may be constrained from entertaining a fresh claim otherwise than by a revised return, that restriction does not operate on the appellate authorities where the relevant facts are on record (paras 23 and 24). Since the audited financial statements prima facie showed a co-operative housing society receiving contributions from its members, and the questions of mutuality and s.80P eligibility needed factual verification, the just course was a remand (paras 25 and 26). In the words reproduced by the source cited on this page: "Such an exercise involves verification of facts and application of legal principles and therefore cannot be said to be a mistake apparent from record amenable to rectification under section 154 of the Act." The decision followed or applied Goetze (India) Ltd. v. CIT (284 ITR 323) (SC) — construed and distinguished as limited to the assessing authority.
It was decided by the ITAT on 2026-03-27 and is reported as ITA Nos. 111, 112 and 113/Mum/2026, assessment years 2018-19, 2019-20 and 2020-21 (ITAT Mumbai); the running header inside the order reads 111 to 113/Mum/2025. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 154, section 143(1), section 80P, section 80P(2)(f), section 250, section 254, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It cuts both ways and is cited by both sides. All three appeals were allowed for statistical purposes (para 29). The Tribunal concurred with the lower authorities that the scope of s.154 is confined to rectification of mistakes apparent from the record and that mutuality and s.80P eligibility, requiring examination of the nature of receipts, the identity of contributors and participators and the utilisation of funds, involve verification of facts and application of legal principles and cannot be a mistake apparent from the record (para 21). However, the denial of relief had occurred on the technical limitation of s.154 and not on any adjudication of the claim on merits (para 25), and Goetze (India) restricts only the Assessing Officer and does not impinge on the powers of the appellate authorities (paras 23 and 24). The impugned orders were set aside and the matter restored to the jurisdictional Assessing Officer for fresh adjudication on merits, with the direction that he confine himself to the issues arising from these appeals and not expand the scope of the proceedings (paras 26 to 28). It arises in Deductions & Disallowances, Co-operative Societies, Appeals and Assessment & Scrutiny matters, on section 154, section 143(1), section 80P, section 80P(2)(f), section 250, section 254 of the Income Tax Act 1961, and was decided by Pawan Singh, Judicial Member and Makarand Vasant Mahadeokar, Accountant Member (SMC Bench, Mumbai). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Raise the claim as a specific ground before the CIT(A) and put the audited financial statements and the member-wise particulars on record there, which is what allowed the Tribunal to remand rather than dismiss. Answer the Goetze (India) objection by quoting the sentence the Tribunal quoted: the holding is limited to the power of the assessing authority and does not impinge on the Tribunal's power under s.254. Ask for the remand direction to be confined to the issues arising in the appeal, as it was here, so the Assessing Officer cannot use the remand to widen the assessment.
Searched for later treatment; none was found. That is not the same as a source affirming it. The citator search (doc 17076444, confirmed as 'Lodha Maharana Pratap Nagar ... vs Ward 4(1) Thane, Thane on 27 March, 2026') returns nothing. A second probe on the society's name returned only this order and a Bombay High Court criminal matter of 31 July 2026 that merely records the society's building as an address. The holding that s.154 cannot carry a mutuality dispute has attracted no later treatment and no appeal is disclosed. Nothing overruling, doubting or distinguishing it was found, and no appeal to a High Court against it is disclosed on the record searched. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The paragraph count was established by transcription: 29 numbered paragraphs ending with the appeals allowed for statistical purposes. There is a conflict on the appeal numbers within the document: the header gives ITA Nos. 111, 112 and 113/Mum/2026 for assessment years 2018-19, 2019-20 and 2020-21, while the running header printed inside para 1 reads 'ITA No. 111 to 113/Mum/2025'. The para 1 text is also corrupted by that running header being interleaved with the sentence. Para 4 records that the Assessing Officer himself described the s.80P and mutuality issue as debatable. The passage set out at para 23 is a quotation from the Supreme Court in Goetze (India) Ltd. v. CIT, not the Tribunal's own words. Paras 20 and 21 were re-fetched on a second route and matched. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
All three appeals were allowed for statistical purposes (para 29). The Tribunal concurred with the lower authorities that the scope of s.154 is confined to rectification of mistakes apparent from the record and that mutuality and s.80P eligibility, requiring examination of the nature of receipts, the identity of contributors and participators and the utilisation of funds, involve verification of facts and application of legal principles and cannot be a mistake apparent from the record (para 21). However, the denial of relief had occurred on the technical limitation of s.154 and not on any adjudication of the claim on merits (para 25), and Goetze (India) restricts only the Assessing Officer and does not impinge on the powers of the appellate authorities (paras 23 and 24). The impugned orders were set aside and the matter restored to the jurisdictional Assessing Officer for fresh adjudication on merits, with the direction that he confine himself to the issues arising from these appeals and not expand the scope of the proceedings (paras 26 to 28).
TaxSphere, “Lodha Maharana Pratap Nagar Co-operative Housing Society Limited v ITO”, https://taxnotice.vittsphere.com/caselaw/case/lodha-maharana-pratap-nagar-154-cannot-carry-a-mutuality-and-80p-claim/ (validity last checked 2026-09-08)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
We were given a refund when the return was processed under s.143(1). On scrutiny the Assessing Officer has now raised a demand and has also charged interest under s.234D on the refund. Is that right, for how long does the interest run, and can he do it for an assessment year that is older than the section itself?
My co-operative credit society filed Form 10-IF opting into s.115BAD and then claimed deduction under s.80P in the same return. CPC has disallowed the whole s.80P deduction under s.143(1). Is there anything to be said?
I meant to stay in the new regime but a wrong Form 10-IE put me back in the old one, and CPC has taxed me under the old regime with no Chapter VI-A deductions because I claimed none in the return. Can I claim them now?
What happens if an appeal is dismissed for want of prosecution and the recall application is filed late?
