THE NEDUNCHALAI NAGAR CO-OPERATIVE HOUSE BUILDING SOCIETY LIMITED,SALEM vs. ADIT-CPC,BENGALURU, BENGALURU

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ITA 608/CHNY/2023Status: DisposedITAT Chennai30 August 2023AY 2021-224 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the authorities below should have waited for the decision of the CBDT on the condonation petition before processing the return and disallowing the deduction. The matter was remitted back to the CIT(A) to await the CBDT's decision.

What were the facts?

The assessee claimed a deduction under Section 80P but filed the return of income after the due date. The CPC disallowed the deduction, and the CIT(A) confirmed this disallowance. The assessee had filed a condonation petition before the CBDT for the delay in filing the return.

What were the issues?

Whether the deduction under Section 80P can be disallowed solely on the ground of delayed filing of return when a condonation petition is pending before the CBDT. Whether the processing authorities should have waited for the outcome of the condonation petition.

Which sections of the Income-tax Act were involved?

Section 80P,Section 139(1),Section 143(1),Section 119(2)

AI-generated summary — verify with the full judgment below

Before: Shri V. Durga Rao & Shri Manjunatha, G.

Hearing: 18.07.2023Pronounced: 30.08.2023

O R D E R

PER V. DURGA RAO, JUDICIAL MEMBER:

1.

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi dated 15.03.2023 relevant to the assessment year 2021-22.

2.

Brief facts of the case are that the assessee has filed the return of income for the assessment year 2021-22 on 16.03.2022 admitting Nil income after claiming deduction under section 80P of the Income Tax Act, 1961 [“Act” in short] of ₹.2,40,11,646/-. The CPC, Bengaluru, while processing the return of income disallowed the claim of deduction under section 80P of the Act and passed intimation under section 143(1) of the Act dated 02.11.2022.

3.

The assessee carried the matter in appeal before the ld. CIT(A). Since the assessee has not filed the return of income within the due date of filing as specified under section 139(1) of the Act, the ld. CIT(A) confirmed the disallowance of deduction claimed under section 80P of the Act and dismissed the ground raised by the assessee.

4.

On being aggrieved, the assessee is in appeal before the Tribunal. By filing copy of the application under section 119(2) of the Act, the ld. Counsel for the assessee has submitted that the assessee has filed a condonation petition before the CBDT under section 119(2) of the Act dated 16.03.2022 to condone the delay in filing the return of income. Hence, the ld. Counsel prayed for setting aside the appellate order till the CBDT take a decision on the application for condonation of delay and thereafter decide the issue afresh.

5.

On the other hand, the ld. DR supported the orders of authorities below.

6.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In this case, since the return of income for the assessment year was not filed within the due date of filing as specified under section 139(1) of the Act, the CPC, Bengaluru disallowed the claim of deduction under section 80P of the Act. We also find that before the CPC pass the intimation under section 143(1) of the Act dated 02.11.2022, the assessee has filed condonation petition before the CBDT under section 119(2) of the Act dated 16.03.2022 to condone the delay in filing the return of income. Neither the CPC nor the ld. CIT(A) considered the condonation petition filed by the assessee under section 119(2) of the Act before the CBDT.

6. 1 Before the Tribunal, the ld. Counsel for the assessee has argued that despite having time to process the return of income under section 143(1) of the Act, the DCIT-CPC, Bengaluru hurriedly processed the return of income under section 143(1) of the Act without waiting for the outcome of the condonation petition filed before the CBDT. In view of the fact that the assessee has filed an application for condonation of delay before the CBDT under section 119(2)(b) of the Act, it is opined that once the delay condonation is pending before the CBDT, the Department ought to have waited for the decision of the CBDT, for the reason that, if the CBDT condone the delay, the claim of the assessee has to be considered in accordance with law. Therefore, we set aside the order passed by the ld. CIT(A) and remit the matter back to the file of the ld. CIT(A) to wait for the decision on the condonation petition filed by the assessee before the CBDT and thereafter pass order in accordance with law.

7.

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

Order pronounced on 30th August, 2023 at Chennai.

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