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Income Tax Appellate Tribunal, ‘SMC’ BENCH, PUNE
Before: SHRI SATBEER SINGH GODARA & SHRI G. D. PADMAHSHALI
॥ आयकर अपीलीय न्यायाधिकरण, पुणे “एस.एम.सी.” न्यायपीठ, पुणे में ॥ IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH, PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपऩल सं. / ITA No. 841/PUN/2023 निर्धारण वषा / Assessment Year : 2019-20 Shri Sant Sena Maharaj Nabhik Samajachi Nagari Sahkari Patsanstha Maryadit, Behind Shani Mandir, Radhabai Chal, Chalisgaon – 424 101 PAN: AABAS8462N . . . . . . . अपीलार्थी / Appellant बिधम / V/s Income Tax Officer- 1(4), Jalgaon . . . . . . . प्रत्यर्थी / Respondent द्वधरध / Appearances Assessee by : Shri Abhay Avachat [‘Ld. AR’] Revenue by : Shri R Y Balawade [‚Ld. DR] सुनवाई की तारीख / Date of conclusive Hearing : 10/08/2023 घोषणा की तारीख / Date of Pronouncement : 01/09/2023 आदेश / ORDER PER G. D. PADMAHSHALI, AM; The present appeal instituted u/s 253(1) of Income-tax Act, 1961 [‘the Act’ hereafter] challenges DIN & Order No. ITBA/NFSC/S/250/2023- 24/1052715471(1) dt. 10/05/2023 passed u/s 250 of the Act by National Faceless Appeal Centre, Delhi [‘NFAC’ hereafter].
Tersely stated facts of the case are; 2.1 The appellant assessee is a credit co-operative society and for assessment year 2019-20 [‘AY’ hereafter] was identified as non-filer, in whose case information of high value financial transactions in the form of cash deposits of ₹71,99,101/- was received by the respondent.
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2.2 Pursuant to such information, the assessee was called upon to file return of income [‘ITR’ hereafter] by 30/09/2020. The appellant filed its return u/s 139(4) of the Act on 14/10/2020 declaring total income of ₹6,13,990/- without making claim for any deductions u/c VI-A of the Act.
2.3 On 20/11/2020 the aforestated ITR u/s 143(1) of the Act was summarily processed accepting declared total income without variation, and thus determined the tax payable in line with the ITR filed by the assessee society.
2.4 Aggrieved by summary assessment, the assessee sought to rectify the taxable income returned for not allowing eligible 80P deduction, has filed an application for rectification u/s 154 of the Act on 05/12/2020, which came rejected by the Ld. CPC on 16/12/2020.
2.5 The action of Ld. CPC denying to allow a deduction u/s 80P of the Act was challenged on twin grounds in an appeal before first appellate authority u/s 246A(1)(c) of the Act. The Ld. NFAC dismissed both the grounds vide para 5 of impugned order as placed at page 5 & 6; 5. Decision The appellant in its ground of appeal has assailed the AO- CPC in disallowing the deduction of Rs. 613988/- under intimation us 143(1) of the Act as the return was not filed within, the time provided us 139(4) of the Act. The appellant further stated that the said adjustments does not fall within the purview of the prima face adjustments permissible us
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143(1)(a) of the Act. The appellant in support of his ground of appeal. The appellant in its ground of appeal has assailed AO- CPC in denying the exemption us 80P of the Act and rejecting the rectification us 154 of the Act. The appellant alleged that the order u/s 154 of the Act passed by the AO-CPC is bad in law as provisions
5.1 The submission of the appellant is examined. The appellant in its submission has filed the copy of the order u/s 143(1) of the Act. It is observed from the same that the due date of filing the return of income for the impugned A. Y was 31.08.2019 and that the ROl was filed on 14.10.2020. The appellant got a communication us 143(1)(a) of the Act that the deduction claimed of Rs. 613988/- us 80P of the Act has been denied. It is essential to note that section 143(1)(a) of the Act specifically provides that no adjustments can be made unless an intimation is given to the assessee of such adjustment either in writing or in electronic mode. Therefore, as can be seen the proposed adjustment provided the assessee an opportunity and hence is passed following the good law. And the adjustment made us 143(1)(a) of the Act is valid adjustment as far as the legality of it is concerned. Therefore, the action of the AO CPC is correct and is upheld. The ground of appeal is dismissed.
5.2 As far the assesse second claim that no adjustment can be made u/s 143(1)(a) of the Act as sub-clause (v) of the said section states that (v) disallowance of deduction claimed under sections 10AA, 80- IA, 80-IAB, 80-IB, 80-IC, 80-ID or section 80-IE, if the return is furnished beyond the due date specified under sub-section (1) of section 139; or
The appellant state that the above specifically mentions certain sections wherein the disallowance can be made us 143(1)(a) of the Act are provided within it and as such the
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deduction us 80P of the Act is not mentioned is not mentioned in the sub-clause, therefore, the denial of deduction by the AO-CPC for the impugned A.Y 209-20 is not warranted and is not legally tenable The factual matrix of the case is that the return of income us 139 of the Act was filed by the assessee on 30.11.2020, whereas the extended date for filing the return was 31.8.2019. Therefore, the return was not filed within the due date as provided us 139(1) of the Act. Further section 80AC introduced in the Act vide Finance Act 2018 provides that no deduction shall be allowed if the return is not filed within the due date as specified u/s 139(1) of the Act. Section 80AC is reproduced below: 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) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80- IAB or section 80-IB or section 80-IC or section 80-ID or section 80- IE; (ii) the 1st day 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.
5.4 The submission of the appellant is examined in the light of the provisions of above section which clearly in clause (ii) mentions "C- Deduction in respect of certain incomes", which clearly covers deduction u/s 80P of the Act. Therefore, the AO-CPC was correct in denying the exemption us 80P of the Act to the assessee as it has not filed the return within the due date as specified us 139(1) of the Act. There is no mistake in the order of the AO-CPC u/s 154 of the Act. The grounds of appeal are dismissed. (Emphasis supplied)
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2.6 Disagreeing with the views of tax authorities below, the assessee brought up the present appeal against the impugned order on as much as seven grounds as laid in the appeal memo; “1. The rectification Order under section 154 passed by the learned AO and the appellate order passed u/s 250 of the Income Tax Act, 1961 passed by the Commissioner of Income Tax (Appeal), NFAC are bad in law. 2. The ITO has erred in not considering and in not allowing benefit of deduction under section 80P of the Act of Rs. 6,13,988/- claimed by assessee and the learned CIT A in disallowing and confirming the same. 3. On the facts and in the circumstances of the case and in law the learned ITO has erred in not allowing benefit of deduction u/s 80P while passing rectification order u/s 154 and the CIT A erred in disallowing same. 4. It is prayed that the assessee is eligible for deduction u/s 80P and the same be allowed since disallowance made of the same in the order passed by AO u/s 154 is not permissible. 5. The intimation has made certain adjustments which are not permissible under section 143(1) of the Act, therefore intimation passed under section 143(1) is bad in law. 6. The Assessee prays for any other relief to be allowed in its case under provisions of law. 7. The assessee craves leave to add, alter, amend, modify, delete all or any of the grounds of appeal. ”
At physical hearing, Ld. AR reiterated appellant’s version of submission as were laid before tax authorities below. Per contra Ld. DR vehemently supported the impugned order. We have heard rival contentions of both parties; and subject to provisions of rule 18 of ITAT- Rules, 1963 perused material placed on record, case laws relied upon by both the rival parties and duly considered the facts of the case in the light of settled legal position which are forewarned to parties present.
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In the extant appeal, precisely two issues have arisen for our consideration viz; (1) eligibility for claim of deduction u/s 80P of chapter VI-A of the Act and (2) the jurisdiction to disallow 80P deduction in summary assessment u/s 143(1) of the Act for impugned AY.
Let us deal with first issue first, i.e. Eligibility of the appellant for claim of deduction u/s 80P of VI-A of the Act; 5.1 It goes without saying that, by virtue of section 80A (1) of the Act, in computing total income, subject to the provisions of Chapter VI-A of the Act, certain deduction are allowed from gross total income. Precisely these all deductions u/c VI-A are subjected to twin riders laid in sub- section (5) of section 80A and clause (ii) of section 80AC of the Act.
5.2 S/s (5) of section 80A of the Act disentitles assessee to eligible claim of deduction if same is not made in return of income. That is to say, if assessee fails to make a claim in return of income, then no deduction u/c VI-A shall be allowed irrespective of reason of its failure to make a claim. Further from AY 2018-19, clause (ii) of section 80AC of the Act makes claim for deduction or eligibility harder by subscribing that, no deduction u/c VI-A of the Act shall be allowed to assessee unless a return of income making a claim for deduction therein is filed within a due date prescribed u/s 139(1) of the Act.
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5.3 The conjoint reading of s/s (5) of section 80A and clause (ii) of section 80AC of the Act beyond an iota of doubt lays down that, from AY 2018- 19 a claim for deduction u/c VI-A of the Act is allowable utterly when such claim is made in the ITR filed within the statutory due date prescribed u/s 139(1) of the Act; and this position of law can be more clearly adumbrated or tabulated as under;
Original Return of Income Filed Revised Return of Income Filed Allowability of Allowability of After expiry of due After expiry of due Asst. Year Sr Deduction u/c VI-A Deduction u/c VI-A Within due date Within due date date prescribed u/s date prescribed u/s of the Act of the Act prescribed u/s 139(1) prescribed u/s 139(1) 139(1) 139(1) Without Claim Not Allowed 1 - With Claim Allowed 2 Without Claim - Not Allowed Without Claim Not Allowed 3 - With Claim Allowed 4 Without Claim Not Allowed 5 Upto AY - Without Claim Not Allowed - With Claim Allowed 6 2017-18 Without Claim Not Allowed 7 (Claims are subjected - to 80A(5) of the Act) 8 With Claim Allowed With Claim - Allowed Without Claim Not Allowed 9 - With Claim Allowed 10 Without Claim Not Allowed 11 Allowed - With Claim - With Claim Allowed 12 Without Claim Not Allowed 13 - With Claim Allowed 14 Without Claim - Not Allowed Without Claim 15 Not Allowed - With Claim 16 Without Claim 17 - Without Claim Not Allowed - Not Allowed From AY With Claim 18 2018-19 Without Claim Not Allowed 19 - (Claims are subjected With Claim Allowed 20 to 80A(5) & 80AC(ii) Without Claim Not Allowed of the Act) 21 With Claim - Allowed Allowed - With Claim 22 to the extent claimed in Original ITR Without Claim 23 Not Allowed Not Allowed - With Claim - With Claim 24
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5.4 In this case, the due date for the impugned assessment year 2019-20 was 31/08/2019 and admittedly the assessee filed its return first time on 14/10/2020 wherein no claim for any deduction u/c VI-A of the Act was made. In the absence of claim in the ITR and furnishing the same after the expiry of due date, ostensibly has attracted twin riders laid in s/s (5) of section 80A and clause (ii) of section 80AC of the Act. Consequently the claim for 80P deduction made through a note-appended to the ITR was rightly rejected by the Ld. CPC while processing the ITR summarily u/s 143(1) of the Act, thus left no mistake therein which could fall within the ambit of section 154 of the Act. And finding no fault with the rejection of claim for 80P deduction, for aforestated reasons the Ld. NFAC has rightly dismissed the appeal on this score. This view also finds concurrence in the decision co-ordinate bench in ITA No 944/Mum/2022. Thus applying rule of stricter interpretation of law laid by Hon’ble Supreme Court in ‘CoC (Import) Mumbai Vs M/s Dilip Kumar and Company and Ors’ reported in 9 SCC 1 (SC) we hold the impugned order flawless. Resultantly all the grounds relating to this issue stands dismissed and adjudicated accordingly.
Now coming to assessee’s challenge of jurisdiction of section 143(1)(a)(v) of the Act; 6.1 At the outset of hearing the Ld. AR contended that, the jurisdiction of Ld. CPC to disallow the claim of deduction made in return filed
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beyond the due date specified u/s 139(1) of the Act in terms of section 143(1)(a)(v) is contra legem, since this enabling provision brought into effect by Finance Act, 2021 consequently applies from assessment year 2021-22 and to subsequent years.
6.2 To drive home the aforestated contention, the Ld. AR strongly pressed into service the decision of co-ordinate bench in case of ‘Lanjani Co-Operative Agri Service Society Ltd. Vs DCIT’ reported in 65 CCH 0560. Per contra Ld. DR contented that, the ratio laid in foregoing case has no application to the present case, since said case was dealt with AY 2018-19 wherein belated ITR was filed declaring NIL income after claiming a deduction u/s 80P of the Act, as against the present case.
6.3 After considering former submission, we see force in rival contention to the effect that; (1) the jurisdiction to disallow the claim of deduction made in the belated return is available to the Ld. CPC from AY 2021-2022 (2) ratio laid by Co-ordinate bench in ‘Lanjani Co- Operative Agri Service Society Ltd. Vs DCIT’ holds good where belated ITR was furnished making a claim for deduction therein.
6.4 We note that, a disallowance can only be made when there is claim for deduction in the ITR; therefore in absence of any claim made in the
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return, there remains no room for processing any disallowing u/s 143(1)(a)(v) of the Act.
6.5 Undisputedly in the present case, the appellant society furnished its ITR beyond the prescribed due date (filed belated) and without making therein any claim for 80P deduction, therefore there wasn’t anything to be disallowed while processing the return summarily u/s 143(1) of the Act, therefore impugned order in our considered opinion remain flawless.
6.6 In the light of foregoing discussion, on this second issue we see the orders of tax authorities below flawless, resultantly issue of jurisdiction and related grounds are adjudicated against the appellant assessee.
In result, the appeal of the assessee is DISMISSED In terms of rule 34 of ITAT Rules, order pronounced in open court on this Friday 01st day of September, 2023.
-S/d- -S/d- SATBEER SINGH GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; ददनाांक / Dated : 01st day of September, 2023. आदेश की प्रनिनलनप अग्रेनषि / Copy of the Order forwarded to : 1.अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The Pr.CIT, -4, Pune (MH-India) 4. The NFAC, Delhi, New Delhi 5. DR, ITAT, Bench ‘SMC’, Pune 6. गार्डफ़ाइल / Guard File. आदेशानुसार / By Order Ashwini वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्यायादधकरण, पुणे / ITAT, Pune.
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