PRIMARY AGRICULTURAL CREDIT CO-OPERATIVE SOCIETY LTD.,GOWDAHALLY vs. INCOME TAX OFFICER, WARD-1, CHICKMAGALUR

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ITA 1809/BANG/2026Status: DisposedITAT Bangalore04 August 2026AY 2019-203 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal upheld the disallowance of Section 80P deduction due to the delayed filing of the return without condonation. However, it remanded the issue of deductions under Section 57 to the AO for verification, if the income was assessed under Section 56.

What were the facts?

The assessee, a co-operative society, did not file its return of income within the due date. Upon reopening, it claimed deduction under Section 80P(2)(a)(i), which was disallowed by the AO and CIT(A) citing Section 80AC. An alternate submission was made regarding deductions under Section 57 if income was treated under Section 56.

What were the issues?

Whether a co-operative society is entitled to Section 80P deduction when the return is filed belatedly without condonation. Whether Section 57 deductions are admissible if income is assessed under Section 56.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i),Section 80AC,Section 148A,Section 148,Section 56,Section 57,Section 139(1),Section 119(2)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K.

PER SHRI SOUNDARARAJAN K., JUDICIAL MEMBER: This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 05/03/2026 in respect of the A.Y. 2019-20.

2.

The brief facts of the case are that the assessee is a co-operative society registered under the provisions of the Karnataka Co-operative Societies Act. The assessee had not filed their return of income. The assessee’s case was reopened for complete scrutiny for verifying the cash deposits made into their bank account. Notice u/s. 148A(b) was issued and thereafter

ITA No. 1809/BANG/2026 PRIMARY AGRICULTURAL CREDIT CO- OPERATIVE SOCIETY LTD.

an order u/s. 148A(d) was made. Simultaneously, notice u/s. 148 was issued and the assessee filed their return of income and claimed deduction u/s. 80P(2)(a)(i) of the Act. The AO relied on section 80AC of the Act and disallowed the claim of deduction.

3.

As against the said order, the assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) dismissed the appeal.

4.

As against the said order, the present appeal has been filed by the assessee before this Tribunal.

5.

At the time of hearing, the Ld.AR submitted that the assessee being a co-operative society is entitled for deduction u/s. 80P(2)(a)(i) of the Act even though the return was not filed u/s. 139(1) of the Act. The Ld.AR made an alternate submission that even though the income was treated as income from other sources u/s. 56 of the Act, the necessary deduction contemplated u/s. 57 should be granted and the balance income can be treated as income from other sources.

6.

The Ld.DR submitted that the order of the lower authorities are in accordance with the provisions and prayed to dismiss the same.

7.

We have heard the arguments of both sides and perused the materials available on record.

8.

As seen from the assessment order, the assessee had not filed their return of income u/s. 139(1) of the Act and therefore the claim made u/s. 80P(2)(a)(i) of the Act in the return filed pursuant to notice issued u/s. 148 of the Act was denied by the AO by relying on the section 80AC of the Act. The AO as well as the Ld.CIT(A) had also observed that the assessee had not filed any application u/s. 119(2)(b) of the Act before the Board to condone the delay in filing the return of income. In such circumstances, we do not find any error in the orders of the lower authorities.

9.

We have also considered the alternate submission made by the Ld.AR in which it was contended that if the interest income was disallowed and treated the same as income from other sources, necessary deduction u/s. 57 has to be granted. The AO had disallowed the

ITA No. 1809/BANG/2026 PRIMARY AGRICULTURAL CREDIT CO- OPERATIVE SOCIETY LTD.

deduction and treated the same as taxable. From the order, we do not find that under which head the income was assessed by the AO. We therefore thought it fit to remit this issue to the AO for ascertaining the fact under which the AO had assessed the income. If the AO had assessed the same u/s. 56 of the Act, necessarily the deductions has to be granted u/s. 57 of the Act. For this limited purpose of verifying the fact, we remit this issue to the file of the AO.

10.

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

Order pronounced in the open court on 04th August, 2026.

Sd/- Sd/- WASEEM AHMED SOUNDARARAJAN K. ACCOUNTANT MEMBER JUDICIAL MEMBER

Bangalore Dated: 04th August, 2026.

Copy to: PRIMARY AGRICULTURAL CREDIT CO- OPERATIVE SOCIETY LTD., MUDIGERE TALUK, CHICKMAGALUR 1 DISTRICT., CHIKKAMAGALURU-577132, KARNATAKA

INCOME TAX OFFICER, WARD-1, 2 WARD 1, COURT ROAD, CHICKMAGALUR., CHIKKAMAGALURU-577101, KARNATAKA

3 THE PCIT / CIT, 4 THE D.R., ITAT, BANGALORE BENCH

BY ORDER

ASSISTANT REGISTRAR, I.T.A.T., BANGALORE.

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