FT 66 KANDAMANGALAM PANCHAYAT UNION TEACHERS COOP THRIFT & CREDIT SOCIETY,VILLUPURAM vs. INCOM TAX OFFICER , VILLUPURAM

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ITA 1362/CHNY/2026Status: DisposedITAT Chennai09 July 2026AY 2019-20206 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal after the assessee paid a cost of Rs. 10,000/-. The appeal was then decided on merits.

What were the facts?

The assessee, a Cooperative Thrift & Credit Society, appealed against an order confirming a disallowance made by CPC under section 143(1). The disallowance was related to a deduction claimed under section 80P.

What were the issues?

The key issue was the jurisdiction of CPC to make adjustments under section 143(1) for disallowances related to belated ITR filing, particularly for assessment years prior to the amendment effective from 01.04.2021.

Which sections of the Income-tax Act were involved?

Section 80P,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & SHRI S.R. RAGHUNATHA

Hearing: 01.06.2026Pronounced: 09.07.2026

आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee-Cooperative Thrift & Credit Society, against the order of the Learned Commissioner of Income Tax (Appeal)/ADDL/JCIT (A)-4, (hereinafter referred to as ‘Ld.CIT(A)’), Delhi, dated 29.04.2024 for the Assessment Year (hereinafter referred to

ITA No.1362/Chny/2026 (AY 2019-20) FT 66 Kandamangalam Panchayat Union Teachers Coop Thrift & Credit Society :: 2 :: as ‘AY’) 2019-20, confirming the intimation passed by CPC under section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

2.

The assessee has inter-alia raised a legal issue, challenging the jurisdiction of CPC making impugned disallowance while passing intimation under section 143(1) of the Act. According to assessee, the provision enabling CPC to make the impugned adjustments came in the statute only w.e.f 01.04.2021 i.e. from AY 2021-22; and hence CPC erred in denying deduction claimed u/s 80P on the ground of belated filing of ITR and brought to our notice that issue is covered in favor of assessee and cited the decision of Co-ordinate Bench of this Tribunal (Bangalore) in the case of Villupuram District Revenue Department Employees Coop Thrift and Credit Society Vs ITO [ITA No.51/Chny/2024 for AY 2019-20 dated 31.05.2024.

3.

At the outset, it is noted that there is a delay of 617 days in filing of the appeal before this Tribunal. The assessee has filed an application for condoning the delay along with the affidavit of the secretary of the appellant-society. Having perused the contents of the affidavit and cause for the delay, we find there was sufficient cause, but we by interim order dated 13.05.2026, directed the assessee-society to remit cost of Rs.10,000/- in favour of the 'Tamil Nadu State Legal Services Authority' at Hon'ble High Court of Madras; and in compliance thereto, assessee has

ITA No.1362/Chny/2026 (AY 2019-20) FT 66 Kandamangalam Panchayat Union Teachers Coop Thrift & Credit Society :: 3 :: remitted Rs.10,000/- via DD NO.844680 on 27.05.2026 [copy of which has been filed before us]. Having perused the same, and considering the contents of the affidavit and cause for the delay, which couldn’t be controverted, finding sufficient cause, we condone the delay and proceed to adjudicate the merits of the grounds of appeal raised by the assessee.

4.

The brief facts are that the assessee is a Co-operative credit Society registered under the Tamil Nadu Cooperative Societies Act, 1983 with object of providing financial assistance to its Members, by inter-alia borrowing funds from co-operative central Bank which is in-turn utilized for the purpose of issuing loans to its members of the society, who are of mainly farmers. All the activities of assessee-society are monitored by the Joint Registrar of Tamil Nadu Co-operative Department. Statutory Audit is conducted every year by Assistant Director of Tamil Nadu Co-operative Audit Department. Books of Accounts are maintained as per the software developed by the Tamil Nadu Co-operative Department and Statutory Audit is carried out and return of Income has been filed as per Books of accounts. The Appellant has filed the return of income for the A.Y. 2019- 20 as on 29.09.2020 under section 139(4) of the Act, as belated return. And the reason behind filing of belated return u/s 139(4) of the Act, was attributed to belated departmental audit and election. In its ITR, the appellant claimed deduction for the entire amount of income of Rs. 22,26,701/- under section 80P of the Act, which was disallowed by

ITA No.1362/Chny/2026 (AY 2019-20) FT 66 Kandamangalam Panchayat Union Teachers Coop Thrift & Credit Society :: 4 :: intimation passed on 23.11.2020 u/s 143(1)(a) of the Act. Aggrieved, the assessee filed an appeal before the Ld.CIT(A), who dismissed the same. Aggrieved, the assessee is before us.

5.

As noted supra, assessee-society has raised a legal issue, challenging the jurisdiction of CPC making impugned disallowance while passing intimation under section 143(1) of the Act. According to assessee, the provision enabling CPC to make the impugned adjustments came in the statute only w.e.f 01.04.2021 i.e. from AY 2021-22; and hence CPC erred in denying deduction claimed u/s 80P on the ground of belated filing of ITR for the relevant AY 2019-20, which power CPC didn’t enjoy and hence impugned intimation is bad in law; and brought to our notice that issue is covered in favor of assessee and cited the decision of Co-ordinate Bench of this Tribunal (Banglore) in the case of Villupuram Credit Society (supra). In this regard, it is noted that return of income for AY-2019-20 was filed on 29.09.2020 as belated return u/s 139(4) of the Act and pursuant to it, CPC Bangalore denied deduction u/s 80P claimed by assessee-society of Rs. 22,26,701/- under section 143(1)(a)(v) of the Act. On appeal, the Ld.CIT(A) has concurred with the findings of CPC that u/s.80AC, deduction u/s.80P shall be allowed only to an assessee if the return is filed in time u/s 139(1) of the Act. According to assessee, the provision enabling CPC to make the impugned adjustments came in the statute only w.e.f 01.04.2021 i.e. from AY 2021-22; and hence CPC erred

ITA No.1362/Chny/2026 (AY 2019-20) FT 66 Kandamangalam Panchayat Union Teachers Coop Thrift & Credit Society :: 5 :: in denying deduction claimed u/s 80P on the ground of belated filing of ITR for the relevant AY 2019-20, which power CPC didn’t enjoy and hence impugned intimation is bad in law and in support of such a contention, the appellate has relied on the decision of the Bangalore bench of ITAT in the case of Villupuram Credit Society supra, inter-alia holding as under:-

“It could thus be seen that the enabling provisions allowing specified adjustment for Sec. 80P u/s 143(1)(a) has been brought on statute only with effect from 01.04.2021 and before that no such adjustment of deduction u/s 80P could have been done by the CPC u/s 143(1) (a) even if the return of income was filed beyond due date as specified u/s 139(1). No doubt, the provisions of Sec.80AC mandate denial of deduction u/s 80P even for AY2018-19, However, in our considered opinion, without there being corresponding enabling provisions u/s 143(1) (a), no such adjustment could have been made by CPC for AY 2018-19, The same is amply clear from the memorandum explaining the provisions in the Finance Bill, 2021 as extracted above. Considering the same, we direct revenue to grant deduction u/s 80P as claimed by the assessee in the return of income." 6. In the light of the ratio of the decision cited supra, we find force in the legal issue raised by assessee challenging the power of CPC making impugned disallowance while passing intimation under section 143(1) of the Act. In this regard, it is noted that the enabling provision allowing specified adjustment for Sec. 80P u/s 143(1)(a) has been brought in that section only with effect from 01.04.2021 and before that no such adjustment of deduction u/s 80P could have been done by the CPC u/s 143(1) (a) even if the return of income was filed beyond due date as specified u/s 139(1) of the Act. No doubt, the provisions of Sec.80AC mandate denial of deduction u/s 80P even for AY2018-19. However, without there being corresponding enabling provisions u/s 143(1)(a) of

ITA No.1362/Chny/2026 (AY 2019-20) FT 66 Kandamangalam Panchayat Union Teachers Coop Thrift & Credit Society :: 6 :: the Act, no such adjustment could have been made by CPC for AY 2018- 19, which is clear from the memorandum explaining the provisions in the Finance Bill, 2021. [Refer, decision of this Tribunal in CC 2355 Nambiampalayam Primary Agricultural Credit Society Vs. DCIT, Bengaluru. ITA No. 1003/Chny/2022 dated 20.02.2023 and in Chennai Kulalars Co-operative Credit Society Limited (Regd. No. X 35) Vs. DCIT, Bengaluru ITA No.712/Chny/2022 dated 12.10.2022]. Hence, assessee succeeds on the legal issue, and we direct CPC to grant deduction u/s 80P as claimed by the assessee in the return of income.

7.

In the result, the appeal filed by assessee is allowed.

Order pronounced on the 09th day of July, 2026, in Chennai.

Sd/- Sd/- (एबी टी. वक�) (एस. आर. रघुनाथा) (ABY T. VARKEY) (S.R.RAGHUNATHA) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�/ACCOUNTANT MEMBER चे�नई/Chennai, �दनांक/Dated: 09th July, 2026. YS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

YASHVI Digitally signed by YASHVIR SINGH R SINGH Date: 2026.07.20 15:12:44 +05'30'

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