PRIMARY AGRICUTURAL CREDIT CO-OPERATIVE SOCIETY LTD.,DARADAHALLI vs. INCOME TAX OFFICER, CHIKKAMAGALURU

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ITA 1851/BANG/2026Status: DisposedITAT Bangalore18 June 2026AY 2018-195 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that as per the amended Section 80AC, filing the return of income by the due date under Section 139(1) is a statutory condition for claiming deductions under Chapter VI-A, including Section 80P. Since the assessee failed to meet this condition, the deduction was rightly disallowed.

What were the facts?

The assessee, a primary agricultural credit co-operative society, filed its return of income in response to a notice under Section 148, claiming a deduction under Section 80P. The Assessing Officer rejected this deduction because the return was not filed within the due date prescribed under Section 139(1). The CIT(A) upheld this decision.

What were the issues?

Whether the assessee is eligible for deduction under Section 80P when the return of income is filed belatedly in response to a notice under Section 148, in light of Section 80AC.

Which sections of the Income-tax Act were involved?

Section 80P,Section 80AC,Section 139(1),Section 148,Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH : BANGALORE

Before: SHRI BALAKRISHNAN S & SHRI SOUNDARARAJAN K

For Respondent: Shri. Ganesh R Ghale, Standing Counsel for the Dept
Hearing: 11.06.2026Pronounced: 18.06.2026

Per Balakrishnan S, Accountant Member : These appeals filed by the assessee are directed against the order of the learned CIT(A), NFAC Delhi vide order Nos. ITBA/NFAC/S/250/2025-26/1086561765(1) dated 26.02.2026 and No. ITBA/NFAC/S/250/2025-26/1086903345(1) dated 05.03.2026 respectively for the Assessment Year 2018-19 arising out of the orders passed under section 147 r.w.s 144B of the Act dt 07.02.2023 and 17.03.2023, for the Assessment Year 2018-19 and penalty order under section 270A dated 04.08.2023. Since the assessee is same, these appeals are clubbed and heard together and a consolidated order is passed. Firstly, we take up appeal in ITA No. 1850/Bang/2026. The facts are culled out there from.

2.

Briefly stated the facts of the case are the assessee is a primary agricultural credit co-operative society registered under Karnataka Co-operative Societies Act. 1959 and is

ITA Nos.1850,1851 and 1852/Bang/2026 Page 2 of 5 engaged in the business of providing agricultural credit facility to its members, distribution of fertilisers, distribution of food and grains under the public distribution system. The case was selected u/s 147 and thereafter notice u/s. 148 dated 25.03.2022 was issued and served on the assessee. In response to the notice u/s148, the assessee filed its return of income on 19.04.2022 claiming a deduction of Rs. 11,50,523/- u/s. 80P of the Act. The Ld. AO observed that assessee has not filed the return of income within the time prescribed u/s 139(1) of the Act and thereafter rejected the deduction claimed by the assessee u/s 80P of the Act and therefore made an addition to the total income of the assessee.

3.

On being aggrieved with the order of the Ld. AO assessee carried the matter in appeal before the Ld. CIT(A). Assessee made written submissions before the Ld. CIT(A). The Ld. CIT(A) observing that there is an inadequate compliance by the assessee, upheld the order of the learned AO by dismissing the appeal of the assessee.

4.

On being aggrieved by the order of the learned CIT(A) assessee is in appeal before us by raising the following grounds:

1.

Was C.I.T. (A) justified in sustaining the addition made due to disallowance of deduction claimed u/s. 80P of the Act by virtue of Sec. 80AC of the Act relying on the decision in Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakara Sangham vs. CIT even when in the said case, the Hon’ble High Court did not consider the legal issue of Respondent’s authority to make adjustment from total income as it stood for relevant A.Y. under Sec. 143(1)(a)(v) of the Act which did not contain disallowance of deduction under Sec. 80P of Chapter VI-A. 2. It is submitted, the appellant could not plead its alternative ground of appeal before both the below Authorities regarding its entitlement for deduction u/s. 57(iii) of the Act in respect of Interest on Investments of Rs. 15,55,553/- earned from CDCC Bank irrespective of the disallowance of deduction u/s. 80P of the Act for belated filing of ITR. 3. In view of the above, it is prayed the matter be remanded to Respondent for considering grant of deduction u/s. 57(iii) to appellant against CDCC Bank interest.

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ITA Nos.1850,1851 and 1852/Bang/2026 Page 3 of 5 5. At the outset, the learned AR submitted that the provisions of section 80AC of the Act w.e.f. 01.04.2018 cannot be applied to the assessee. He submitted that the returns were furnished in response to notice under section 148 of the Act on 19.04.2022. He also submitted that the claim for deduction under section 80P of the Act was made while filing the return of income under section 148 of the Act. He therefore pleaded that since section 80P of the Act being a beneficial provision, disallowance of the claim under section 80P of the Act is not justifiable.

6.

Per contra, the learned Departmental Representative [in short ‘DR’] heavily placed reliance on the orders of the Revenue authorities.

7.

According to section 80AC(ii) of the Act, the assessee has to file his return of income under section 139(1) of the Act to claim the benefit under Chapter “C.— Deductions in respect of certain incomes”. Section 80AC of the Act has been amended w.e.f. Assessment Year 2018-19 which reads as follows: “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.]

8.

In the instant case, the assessee has not filed the return of income on or before the due date prescribed under section 139(1) of the Act, however, has filed belatedly on 19.04.2022, in response to notice under section 148 of the Act. The Finance Act 2018 substituted Section 80AC with effect from 01.04.2018 (AY 2018-19) allowing the

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ITA Nos.1850,1851 and 1852/Bang/2026 Page 4 of 5 deduction admissible only when the assessee filed the return of income u/s 139(1) of the Act. Thus filing of the return of income within due date prescribed u/s 139(1) became a statutory condition for claiming deduction u/s 80P of the Act. No evidences were produced before the authorities or even before us, seeking condonation of delay. In these circumstances, we are of the opinion that the assessee is not entitled for deduction under section 80P of the Act for the claim made in the returns filed under section 148 of the Act on 19.04.2022 for the AY 2018-19. We therefore dismiss the grounds raised by the assessee.

9.

ITA No. 1852/Bang/2026 The facts stated in ITA No.1850/Bang/2026 are similar to the present appeal. Therefore, our decision in ITA No. 1850/Bang/2026 shall apply mutatis mutandis to this appeal also. Accordingly, the grounds raised by the assessee ae dismissed. In the result, appeal of the assessee is dismissed.

10.

ITA No. 1851/Bang/2026 This appeal is filed by the assessee against the penalty order passed under section 270A of the Act. Since the quantum appeal in ITA No.1850/Bang/2026 is decided against the assessee, penalty levied under section 270A of the Act arising out of the quantum addition in ITA No.1850/Bang/2026 is sustained.

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ITA Nos.1850,1851 and 1852/Bang/2026 Page 5 of 5 11. In the result, all the appeals are dismissed.

Pronounced in the open court on the date mentioned on the caption page.

Sd/- Sd/- (SOUNDARARAJAN K) (BALAKRISHNAN S) Judicial Member Accountant Member Bangalore. Dated: 18.06.2026. /NS/* Copy to: 1. Appellants 2. Respondent 3. CIT 4. CIT(A) 5. DR 6. Guard file By order

Assistant Registrar, ITAT, Bangalore.

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