AA515 OLAGADAM PRIMARY AGRI CO-OP CREDIT SOCIETY,ERODE vs. DEPUTY COMMISSIONER OF INCOME TAX, BENGALURU

The appeal filed by the assessee is delayed by 496 days in filing the appeal before the Tribunal. The assessee filed a petition for condonation of delay in support of an affidavit. By referring to petition as well as affidavit, the ld. Counsel for the assessee has submitted that the assessee received the appellate order on 10.01.2022 and the time for filing of the appeal before the Tribunal was to expire on 11.03.2022. It was further submission that the assessee does not have qualified Accountant to look after the proceedings. It was further submissions that after formation of Tamil Nadu State Accounting and Taxation Services Co-operative Society, the assessee could identify and appoint its Consultant for direct and indirect tax related matters and the incumbent were appointed only w.e.f. 12.05.2023. It was further submissions that delay in filing the appeal is neither wilful nor wanton, but for the reasons beyond the control of the assessee and prayed for condonation of delay in filing the appeal. The ld. DR has not raised any serious objection and consequently, since the assessee was prevented by reasonable cause, the delay in filing the appeal stands condoned and admits the appeal for adjudication.

Brief facts of the case are that the assessee has filed its return of income for the assessment year 2018-19 belatedly on 30.03.2019 admitting NIL income after claiming deduction under section 80P of the Income Tax Act, 1961 [“Act” in short] as the accounts of the assessee society were not audited under the Tamil Nadu Cooperative Societies Act, 1983, within the time allowed under section 139(1) of the Act. Since the assessee could not file the return of income within the time prescribed under section 139(1) of the Act, the CPC denied the claim of deduction under section 80P of the Act, which was confirmed by the ld. CIT(A).

3. On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that auditing of the assessee under Tamil Nadu Cooperative Societies Act, 1983 was completed on 27.02.2019 and audit report was released during March, 2019 and immediately, the assessee filed the return 30.03.2019 along with tax audit report under section 44AB of the Act. Besides relying upon the decision in dated 12.04.2023, it was further submission that the delay in filing the return was unintentional and prayed for allowing the deduction claimed under section 80P of the Act.

Heard both the sides, perused the materials available on record and gone through the orders of authorities below. In this case, the assessee filed the return 30.03.2019 along with tax audit report under section 44AB of the Act belatedly after claiming deduction under section 80P of the Act for the reason that the auditing of the assessee under Tamil Nadu Cooperative Societies Act, 1983 was completed on 27.02.2019 and audit report was released during March, 2019. However, the CPC concluded the intimation under section 143(1) of the Act dated 14.06.2019 by denying the claim of deduction under section 80P of the Act. On appeal, the ld. CIT(A) dismissed the appeal of the assessee.

Similar issue was subject matter in appeal before the Tribunal in the case of 3148 Kanakkampalayam Primary Agricultural Cooperative Credit Society v. ITO in dated 12.04.2023 for the assessment year 2018-19, wherein, the Tribunal has observed and held as under: 3. Upon perusal of case records, it could be seen that the assessee is a registered cooperative society and subjected to audit. The auditors were to be appointed by Registrar of Co-operative societies. The audit was completed on 31.10.2018 and the audit report was released to the assessee during February, 2019. Upon receipt of the same, the assessee filed return of income during March, 2019. Thus, it could be concluded that the late filing of return of income was not intentional but beyond the control of the assessee. In such a case, the denial of impugned deduction, which the assessee is otherwise eligible to claim, could not be held to be justified as held by this Tribunal in M/s M/s TPD 101 Uthangarai Milk Producers Co-operative Society Ltd. vs. ITO (ITA No.544/Chny/2021 dated 31.05.2022) as under: - 7. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. Admittedly, the assessee being a Co-   operative Society registered under the Tamil Nadu Co operative Societies Act, 1983, is subject to Audit u/s.80 of the Act, by the Co-operative Audit Department. It is also an admitted fact that the Audit of the assessee’s books of accounts has been carried out by the Department and such Audit was completed on 08.10.2019. The assessee claims that the delay in filing of the return for the relevant AY is on account of delay in completion of Audit by the Co-operative Audit Department and such delay cannot be attributed to the assessee, because, completion of Audit by the Department, is not in the hands of the assessee. We have gone through the reasons given by the assessee in light of provisions of Sec.80AC of the Act, and we find that the assessee is, otherwise, entitled for deduction u/s.80P(2) of the Act, in respect of profits derived from its business, because, it has satisfied all conditions prescribed therein. The only reason for the AO to reject the deduction claimed u/s.80P(2) of the Act, was that the assessee does not file its return on or before due date specified u/s.139(1) of the Act. Except this, the AO has not brought on record any other reasons to deny deduction claimed u/s.80P(2) of the Act. Therefore, from the reasons given by the assessee for not filing return of income within the due date specified under the Act, we are of the considered view that the delay in filing of return, cannot be attributable to the assessee, because, completion of Audit by the Co- operative Department, is not under the control of the assessee. Further, the assessee has filed its return of income as soon as it has received the Audit Report from the Department. Further, the delay in filing of the return for the relevant AY is very small in as much as the extended due date for filing of return of income for the AY 2019-20 was 31.10.2019, whereas, the assessee has filed its return of income on 14.11.2019. Therefore, considering reasons given by the assessee for delay in filing of return of income for the relevant AY and also taken note of the fact that the assessee is, otherwise, entitled for deduction u/s.80P(2) of the Act, we are of the considered view that the ACIT/CPC were erred in rejecting deduction claimed u/s.80P(2) of the Act. Hence, we direct the AO to allow deduction as claimed by the assessee u/s.80P(2) of the Act, and delete additions made to total income.

In the result, the appeal filed by the assessee is allowed. Considering the same, we direct Ld. AO to allow the impugned deduction. The decision of Hon’ble High Court of Madras in AA520 Veerappampalayam PACS vs. DCIT (138 Taxmann.com 571) as referred to by revenue is primarily with respect to scope of Sec. 143(1)(a) and do not address the impugned issue and therefore, this case law is not applicable.

In the result, the appeal stand allowed. 6.1 The ld. DR could not controvert the above findings of the Tribunal. Respectfully following the Coordinate Bench (Division Bench) decision of the Tribunal in the case of 3148 Kanakkampalayam Primary Agricultural Cooperative Credit Society v. ITO (supra), the Assessing Officer is directed to allow deduction as claimed by the assessee under section 80P of the Act and delete the additions made to the total income of the assessee. 7. In the result, the appeal filed by the assessee is allowed.