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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGH, HON’BLE & SHRI MANJUNATHA. G, HON’BLE
आदेश /O R D E R
PER MANJUNATHA. G, ACCOUNTANT MEMBER:
This appeal filed by the assessee is directed against the order passed by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 19.12.2022 and pertains to assessment year 2019-20.
:-2-: ITA. No: 81/Chny/2023 2. The assessee has raised the following grounds of appeal: “1. The order of the NFAC dated 19.12.2022 vide DIN & Order No. ITBA/NFAC/S/250/2022-23/1048079303(1) for the above assessment year is contrary to law, facts, and in the circumstances of the case.
2. The NFAC erred in sustaining the disallowance of claim of deduction u/s 80P(2)(d) of the Act to the tune of Rs. 55,17,234/-while computing the taxable total income without assigning proper reasons and justification.
3. The NaFAC failed to appreciate that the rejection of the claim of deduction(s) u/s SOP of the Act on various facets was wrong, incorrect, erroneous, invalid, unjustified and not sustainable both on facts and in law.
4. The NaFAC failed to appreciate that the scope of Section 143(1) of the Act was wrongly and erroneously understood and ought to have appreciated that the narrow scope of the intimation proceedings would vitiate the disputed adjustment made, thereby negating the findings in the impugned order.
5. The NFAC failed to appreciate that the amendment widening the scope of the provisions in Section 143(1) of the Act to include the impugned adjustment / addition was introduced in Finance Act, 2021 w.e.f. 01.04.2021 and the said legal position was not canvassed before the High Court which order dated 07.04.2021 was followed by the First Appellate Authority at Para 4.2.2 of the impugned order thereby negating the related findings in the impugned order.
6. The NFAC failed to appreciate that the conditions stipulated Section 80AC of the Act are to be read as directory and not mandatory and further ought to have appreciated that the delay in filing in filing the return of income was beyond the control of appellant, thereby vitiating the findings in para 4.2.3 of the impugned order.
7. The NFAC failed to appreciate that the amended provisions under Section 143(1)(v) of the Act applicable from the assessment year 2021-22 was erroneously applied and ought to have appreciated that the said amended provisions could not have retrospective application, thereby vitiating the findings in para 4.2.3 in the impugned order.
:-3-: ITA. No: 81/Chny/2023 8. The NFAC failed to appreciate that in any event the entire recomputation of taxable total income forming part of the intimation order on various facets was wrong, erroneous, invalid, incorrect and not sustainable both facts and in law.
The NFAC failed to appreciate that the intimation order under consideration was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law.
The NFAC went wrong in placing reliance on certain decisions which were not applicable to the facts of the present case and ought to have appreciated that the misreading of the decisions relied upon with a view to apply the ratio to the facts of the present case would vitiate the findings in para 4.2.3 of the impugned order.
The NFAC failed to appreciate that there was no proper opportunity before passing of the intimation order as well as before passing the impugned order and ought to have appreciated that any order passed in violation of principles of natural justice would be nullity in law.
The Appellant craves leave to file additional grounds/arguments at the time of hearing.”
The brief facts of the case are that, the appellant is a co- operative society registered under the Tamil Nadu Co- operative Societies Act, 1983. The appellant has filed its return of income for the assessment year 2019-20 on 30.09.2020, declaring total income of Rs. Nil, after claiming deduction u/s. 80P of the Income-tax Act, 1961 (hereinafter referred to as “the Act”). The ADIT, CPC processed return of income filed by the assessee and issued intimation u/s. 143(1) of the Act, on 21.2.2021 and determined total income of Rs. :-4-: ITA. No: 81/Chny/2023 55,17,234/-, after denying deduction claimed u/s. 80P of the Act, for belated filing of return of income. The assessee carried the matter in appeal before the first appellant authority. The CIT(A), NFAC, Delhi for the reasons stated in their appellant order dated 19.12.2022, sustained additions made by the AO towards disallowance of deduction claimed u/s. 80P of the Act, on the ground that as per the provisions of section 80AC(ii) of the Act, unless return of income is filed on or before due date prescribed u/s. 139(1) of the Act, no deduction shall be allowed under the heading ‘C- Deduction in respect of certain incomes’ from assessment year 2018-19 onwards. Aggrieved by the ld. CIT(A) order, the assessee is in appeal before us.
The Ld. Counsel for the assessee, referring to provisions of section 143(1)(a) sub clause (v) submitted that, the law prevailing for the assessment year 2018-19 does not contemplates disallowance of deduction under Chapter VIA-C of the Act and the same has been amended by the Finance Act, 2021 w.e.f. assessment year 2021-22 and thus, for belated filing of return of income deduction claimed u/s. 80P of the Act, cannot be denied. The ld. Counsel for the assessee, :-5-: ITA. No: 81/Chny/2023 made alternate plea and submitted that the assessee has also filed a petition u/s. 119(2)(b) of the Act before the CBDT, and the matter may be set aside to the file of the AO.
The Ld. DR, on the other hand supporting the order of the CIT(A) submitted that as per the provisions of section 80AC(ii) of the Act, from the assessment year 2018-19 onwards, deductions shall be denied unless return of income is filed on or before due date prescribed u/s. 139(1) of the Act. Thus, there is no merit in the arguments of the assessee that no adjustment can be made u/s. 143(1) of the Act for the impugned assessment year.
We have heard both the parties, perused materials available on record and gone through orders of the authorities below. In so far as first argument of the Ld. Counsel for the assessee in light of amendment to section 143(1) of the Act by the Finance Act, 2021 w.e.f. 01.04.2021, that no adjustment can be made towards Chapter VIA deduction under part (C) in case of belated filing of return, we find that as per the provisions of section 80AC(ii), the law is very clear in as much as unless the return of income for the relevant assessment :-6-: ITA. No: 81/Chny/2023 year is filed on or before due date prescribed u/s. 139(1) of the Act, no deduction shall be allowed under Chapter VIA under the head ‘C’. Therefore, we are of the considered view that when the assessee has not filed return of income on or before due date for furnishing return of income u/s. 139(1) of the Act, then adjustment can be made while processing return of income u/s. 143(1) of the Act. Therefore, we reject the arguments of the assessee.
In so far as alternate argument of the assessee, in light of petition filed in terms of section 119(2)(b) of the Act before the CBDT for condonation of delay, we find that petition filed by the assessee is pending for adjudication and thus, we are of the considered view that the matter needs to be set aside to the file of the AO for re-adjudication of the issue in light of petition filed by the assessee and the outcome of the said petition. Therefore, we set aside the order passed by the ld. CIT(A) and restore the issue back to the file of the AO and direct the AO to re-examine the claim of the assessee after considering the outcome of petition filed by the assessee before the CBDT.