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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM & SHRI N. K. CHOUDHRY, JM
आदेश / O R D E R
Per N K Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 14-03-2023, impugned herein passed by the Ld. Commissioner of Income Tax(Appeals)/National Faceless Appeal Centre(NFAC) Delhi, u/s.250 of the Income Tax Act 1961 (in short ‘the Act’) for AY 2018-19.
The Nutan Laxmi Co-Operative Society 2. In this case the Assessee had declared its income at Rs. 2,43,430/- after claiming deductions amounting to Rs. 50,000/- and 51,22,598/- respectively u/s. 80P(2)(c) and 80P (2)(d) of the Act, by filing its return of income on dated 18th Sep, 2018, which was selected for scrutiny under CASS on the issues “Deduction from total income under chapter VI-A and Claim of any other amount allowable as deduction in scheduled BP”.
2.1 The AO by issuing statutory notices asked the Assessee to provide certain information, in response to which, the Assessee by filling its replies claimed that it is Co-Operative Housing Society of plot holders and having main source of income from interest received from bank deposits, contribution from its members and transfer of plot and lease rent etc. The Assessee further claimed that it has claimed income of Rs. 51,72,598/- as deduction under chapter VI-A of the Act.
The Assessing Officer by considering the said claim of the Assessee, further asked the Assessee to justify the allowability to its claim and the section of the income tax Act, under which the same is claimed exempt from tax.
3.1 The Assessee in response to the said query submitted that the out of total income Rs. 50,000/- is claimed as deduction u/s. 80P(2)(c) of the Act and Rs. 51,22,598/- (which comprises of interest of Rs. 50,51,487/- on fixed deposit kept with Co-
The Nutan Laxmi Co-Operative Society Operative Banks and savings bank interest of Rs. 71,111/- from Co-Operative Bank) as a deduction u/s. 80P(2)(d) of the Act.
The Assessing Officer though considered the claim of the Assessee, however found the same not acceptable and ultimately disallowed the said amount of Rs. 51,72,598/- and consequently, added in the income of the Assessee by observing as under:
6.2 On perusal of details of e-filed forms also shows that the assessee had not filed audit report any, since its case was not an auditable case as per the above narration given in the ITR. Thus, in this case the due date of filing of ITR was 31-08-2018 whereas the assessee had filed its ITR on 18- 09-2018 meaning thereby that in the instant case the ITR was filed beyond the due date. Thus, as per facts, the claim made by the assessee for deduction u/s. 80P was not found permissible in its case as income Tax Return had not been filed within the time permitted U/s. 139(1) of Income Tax Act, 1961 read with section 80AC (ii) which reads as under- Deduction not to be allowed unless return furnished.- 80AC. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after-
(i)….. (ii) the first date of April 2018, any deduction is admissible under any provision of this chapter under the heading "C.-Deductions in respect of certain incomes". no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139."
6.3 Vide notice u/s. 142(1) of the Income Tax Act, 1961 dt. 19-01-2021, the assessee was requested to furnish explain in this regard. The assessee vide its response made on 05-02-2021 has stated as under- "The assessee is required to be audited under Maharashtra State Co- operative Act and hence the date of filing return u/s 139(1) was 31st October, 2018. The assessee filed its return of income on 18th September, 2018 which was well within the time limit and hence we make an humble request that the deduction under Chapter VIA should be allowed."
The Nutan Laxmi Co-Operative Society 6.4 Here it is worthy to mention that on one hand the assessee is claiming that its case was required to be audited under Maharashtra State Co- operative Act and by virtue of the same it is claiming the benefits of the due date for filing of auditable case in terms provisions of section 139 (1) of the Income Tax Act, 1961 but on the other hand it did not e-filed its audit report at the time of filing of the return of income which was supposed to file as per its claim to be a case of auditable one and even it falled to file the so called audit report within time which it claimed to be the due date for filing u/s. 139 of the I.T. Act, 1961 in its case i.e 31-10- 2018. Thus, as per facts it failed to comply with the terms of provisions contained in the Act in this regard and in view of the same the benefits of due date for auditable case i.e. 31-10-2018 is not found to have applicable in its case and hence it is treated that the assessee had filed its ITR beyond the due date in the instant case. 6.5 Since the ITR so filed by the assessee is found to have filed beyond the due date in this case, the assessee society is not found eligible for deduction u/s. 80P of the Income Tax Act, 1961 in terms of section 80AC(ii) of the Income Tax Act, 1961.
6.6 Since the assessee failed to fulfill the condition contained in the above section of 80AC(i) by not furnishing its return of its income for the assessment year under consideration on or before the due date specified under sub-section (1) of section 139.", it is not eligible for deduction under section 80P of the Income Tax Act, 1961, which falls under the Chapter VIA of the Act. Thus, in this case deduction under the aforesaid section i.e. 80P 2(c)(ii) and 80P(2)(d) of the Income Tax Act, 1961. as claimed by the assessee is not allowed and the deductions so claimed by the assessee are added back to the income returned, resultantly addition for the whole of the amount of Rs. 51,72,598/- (Rs. 51,22,598/- u/s. 80P(2)(d) and Rs. 50,000/- u/s. BOP 2(c)(B), respectively). This amount will count as under- reporting of income for the purpose of penalty proceeding u/s 270A of the LT. Act, 1961, which are being initiated separately.
The Assessee being aggrieved challenged the aforesaid addition before the Ld. Commissioner, who more or less on the same reasoning as given by the Assessing Officer, affirmed the said addition by observing as under:
The Nutan Laxmi Co-Operative Society 4.4 Therefore, considering the observation of the AO, I concur with the findings of the AO that once the assessee is filing return and audit report in response to Income Tax Act, 1961, then all the provisions of Income Tax Act and Rules will apply to the appellant and not some other Act (in this case state co-operative Act). It is not valid that the appellant can do it's audit under state co-operative Act and file the return and audit report as per the dates prescribed in the Income Tax Act and Rules and then claim the benefit of Income Tax Act and Rules. The Income Tax Act and Rules prescribes due dates for filing of income tax return and audit report, which has to be adhered to, when filing income tax return and audit report.
4.5 Thus, the appellant has failed to comply with the provisions contained in the Act in this regard and in view of the same the benefits of due date for auditable case Le, 31-10-2018 is not found to have applicable in its case and hence it is treated that the assessee had filed its ITR beyond the due date in the instant case. Since the ITR filed by the assessee is found to have filed beyond the due date in this case, the assessee society is not found eligible for deduction u/s 80P of the Income Tax Act, 1961 in terms of section 80AC(ii) of the Income Tax Act, 1961. Thus, the assessee failed to fulfill the condition contained in the section 80AC() by not furnishing its return of its income for the assessment year under consideration on or before the due date specified under sub-section (1) of section 139. Therefore, it is not eligible for deduction under section 80P of the Income Tax Act, 1961, which falls under the Chapter VIA of the Act.
4.6 In view of apparent position of statute (supra), I am of the considered view that deduction u/s 60P(2)(d) and 80P(2)(c) of the Act cannot be allowed since the appellant has failed to file its return of income as per provision of section 139(1) of the Act. Accordingly,the grounds at S.No. 1 to 4 of appeal are hereby dismissed. 5. Ground No. 5 is general in nature and does not require any adjudication, hence dismissed.
The Assessee being aggrieved is in appeal before us.
We heard the parties and perused the material available on record. The Assessee’s claims with regard to the deductions amounting to Rs. 50,000/- and Rs. 52,22,598/- respectively u/s. The Nutan Laxmi Co-Operative Society 80P (2)(c) and u/s. 80P (2)(d) of the Act were disallowed/denied by both the authorities below, mainly on the reason that the ITR filed by the Assessee on 18th Sep, 2018 was beyond the due date as prescribed u/s 139(1) of the Act and therefore claim made by the Assessee for deduction u/s. 80P was not found permissible.
The only controversy involved in this case relates to the due date for filing of its return of income by the Assessee, which the department claimed that the last date for filing of ITR in this case was 31st Aug, 2018, whereas the Assessee has claimed the same was 31st Oct, 2018 u/s. 139(1) of the Act.
8.1 We have given thoughtful consideration to the peculiar and circumstances of the case, as well as the provisions of section 139 of the Act and observe that in the AY 2018-19, in case of person (other than a company) whose accounts were required to the audited under this Act or under any other law for the time being in force, as per Explanation-2 (a)(ii) of section 139(1) of the Act, the due date for filling of ITR was 30th September, however the said due date of 30th September, has subsequently been substituted with 31st October vide finance Act 2020 with effect from 1st April, 2020. 8.2 The Assessee being a Co-Operative Housing Society governed by Maharashtra Co-Operative Society Act 1960 required to be audited under Maharashtra State Co-Operative Act and therefore was liable to file its return of income upto 30-09- 2018 and hence the Assessee filed on 18-09-2018, which goes
The Nutan Laxmi Co-Operative Society to show that the Assessee has filed its return of income before the due date as prescribed u/s. 139 of the Act and therefore the Assessee is entitled for the deduction as claimed for. Hence we are inclined to accept the claim of the Assessee and consequently delete the addition made by the AO and affirmed by the Ld. Commissioner.
In the result, appeal filed by the Assessee stands allowed.
Orders pronounced in the open court on 27.07.2023. Sd/- Sd/- (Prashant Maharishi) (N. K. Choudhry) Accountant Member Judicial Member Ms. Urmila आदेशकीप्रतितितिअग्रेतिि/Copy of the Order forwarded to : 1. अपीलधर्थी/ The Appellant 2. प्रत्यर्थी/ The Respondent 3. आयकरआयुक्त/ CIT- concerned 4. नवभधगीयप्रनिनिनर्, आयकरअपीलीयअनर्करण, मुंबई/ DR, ITAT, Mumbai 5. गधर्ाफधईल / Guard File आदेशानुसार/ BY ORDER,