INDUR INTIDEEPAM MACS FEDERATION LIMITED,NIZAMABAD vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1, NIZAMABAD

The assessee has raised five identical grounds in its both appeals for the AYs 2006-07 and 2008-09 and they are extracted herein below for reference:-

The order of the Ld. CIT (A) is erroneous both on facts and in law.

The brief facts of the case are that the assessee is a Co-operative Society providing small scale loans to poor and marginal farmers. Since, the assessee has not filed its return of income for the AY 2006- 07 and 2008-09 notices were issued U/s. 148 of the Act. Thereafter, the assessee file its return of income for both the AYs and both the assessments were completed by the Ld. AO U/s. 143(3) r.w.s 147 of the Act on 25/03/2013 wherein the ld. AO assessed the income of the assessee and also granted deduction U/s. 80P of the Act. Subsequently, the Ld. AO on verifying the records found that the assessee was not entitled to claim deduction U/s. 80P of the Act because the assessee had failed to file the return of income for the relevant AYs within the due date specified U/s. 139(1) of the Act r.w. Explanation-2. Hence, the Ld. AO invoked his powers U/s. 154 of the Act and computed the income of the assessee for both the relevant AYs by withdrawing the deduction granted U/s. 80P of the Act at the time of original assessment. When the matter cropped up before the ld. CIT (A), the Ld. CIT (A) agreed with the view of the Ld. AO for the following reasons:-

Aggrieved by the order of the ld. CIT (A), the assessee is now in appeal before us for both the AYs raising five identical grounds. However, the crux of the issue is that the Ld. CIT (A) had erroneously confirmed the order of the ld. AO who had unduly withdrawn the deduction claimed by the assessee U/s. 80P of the Act invoking his powers U/s. 154 of the Act.

The ld. AR vehemently argued before us by stating that the assessee had filed its return of income for both the AYs in response to notice issued U/s. 148 of the Act wherein it had claimed the deduction U/s. 80P of the Act. The Ld. AR further argued by stating that there was no provision in the Act which bars the assessee from claiming deduction U/s. 80P of the Act for not filing the return of income within the due date provided U/s. 1391(1) and 139(4) of the Act. The ld. DR though vehemently argued in support of the orders of the ld. Revenue Authorities could not successfully controvert to the submissions of the ld. AR.

After hearing both sides, we find merit in the arguments advanced by the ld. AR. The assessee had filed its return of income for both the relevant AYs pursuant to the notice issued U/s. 148 of the Act claiming deduction U/s. 80P of the Act. Therefore, the assessee has complied with the provisions of section 80A(5) of the Act. Section 80A(5) only stipulates that the assessee should claim the deduction in the return of income which the assessee had complied while responding to notice issued U/s. 148 of the Act. Further Section 80A(5) does not stipulate that the return of income should be filed within the due date prescribed U/s.139(1) & (4) of the Act. Moreover We do not find any other provisions of the Act which bars the claim of deduction U/s. 80P of the Act if the return of income is not filed within the due date as provided U/s. 139(1) & (4) of the Act. The Ld. DR also could not successfully controvert to the submission of the ld. AR. Therefore, we do not find any merit in the order passed by the Ld. AO invoking his powers U/s. 154 of the Act, withdrawing the claim of deduction U/s. 80P of the Act in the case of the assessee for both the AYs. Since the ld. CIT (A) has also agreed with the same view of the ld. AO, his orders are also devoid of merits. For the aforestated reasons, we hereby set aside the orders of the Ld. CIT (A) and direct the ld. AO to grant deduction U/s. 80P of the Act to the assessee for both the AYs. Accordingly, both the appeals of the assessee are held in its favour.

In the result, both the appeals of the assessee are allowed.