K 1619 SEVUR PRIMARY AGRICULTURAL CO-OPERATIVE CREDIT SOCIETY,AVINASHI vs. ITO, WARD 1 (4), TIRUPUR

Aforesaid appeal by assessee for Assessment Year (AY) 2018-19 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 03-10-2022 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s.143(3) r.w.s. 144B of the Act on 22-04- 2021. The subject matter of appeal is in a narrow compass i.e., denial of deduction u/s 80P for late filing of return of income.

The Ld. AR has relied on the order of coordinate bench of this Tribunal in M/s TPD 101 Uthangarai Milk Producers Co-operative Society Ltd. vs. ITO (ITA No.544/Chny/2021 dated 31.05.2022) by drawing parity in facts. The Ld. Sr. DR has relied on the orders of lower authorities. Having heard rival submissions, the appeal is disposed-off as under.

Upon perusal of assessment order dated 22-04-2021, it could be seen that the assessee is registered under Tamil Nadu Society Act, 1983. It claimed deduction u/s 80P in the return of income for Rs.29.48 Lacs. However, Ld. AO proceeded to disallow the same on the ground that the return was not filed within due date. It transpired that the assessee filed petition u/s 119(2)(b) before appropriate authority for condonation of delay on the ground that return of income could be filed only after completion of statutory audit which was done by state co- operative department. The statutory auditors could not complete the audit in time which led to delay in filing of return of income. In the said background, the assessee laid its claim on impugned deduction. However, considering the provisions of Sec.80AC, Ld. AO rejected the claim. The view of Ld. AO was endorsed by Ld. CIT(A) against which the assessee is in further appeal before us.

I find that identical issue stood covered in assessee’s favor by the cited decision of this Tribunal for AY 2019-20 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.