SUMITRA SAHAKARI PATPEDHI MARYADIT,MUMBAI vs. -, -

These two appeals by the assessee are directed against two separate orders passed by the National Faceless Appeal Centre (hereinafter referred as the Ld. CIT(A)) both dated 19.12.2025 for Assessment Years 2019-20 and 2020-21. Since the issue involved in both

The common grievance of the assessee is against denial of deduction under section 80P of the Income-tax Act, 1961 ("the Act") on the ground that the return of income was not furnished within the due date prescribed under section 139(1) of the Act. The assessee has also challenged the action of the authorities below in not considering the explanation regarding delay in filing the return.

Briefly stated, the assessee is a co-operative credit society engaged in providing credit facilities to its members. For both the assessment years under consideration, the returns of income were admittedly filed beyond the due date prescribed under section 139(1). The Assessing Officer denied deduction claimed under section 80P by invoking the provisions of sections 80A(5) and 80AC of the Act. The Ld. CIT(A) confirmed the action of the Assessing Officer holding that filing of the return within the prescribed time is a mandatory condition for claiming deduction under Chapter VI-A and the assessee having admittedly failed to satisfy the said condition, no deduction could be granted.

Before us, the Ld. Authorised Representative submitted that the delay in filing the returns occurred on account of extraordinary circumstances beyond the control of the management. It was submitted that substantial funds of the society were siphoned off by the erstwhile management and criminal proceedings were initiated against the persons responsible. Because of the financial irregularities and administrative difficulties arising therefrom, the returns of income could not be filed within the prescribed period. Reliance was placed upon various judicial precedents including the decision of the Hon'ble Kerala High Court in

The Ld. Departmental Representative, on the other hand, supported the orders of the lower authorities and submitted that sections 80A(5) and 80AC contain a statutory embargo against allowing deduction where the return is not furnished within the prescribed due date. According to him, neither the Assessing Officer nor the appellate authorities have any power to relax the mandatory statutory requirement.

We have carefully considered the rival submissions and perused the material placed before us. There is no dispute on the factual aspect that for both the assessment years under consideration the assessee furnished its returns beyond the due date prescribed under section 139(1). The deduction under section 80P has been denied solely on account of delayed filing of the returns by applying sections 80A(5) and 80AC of the Act.

We have also carefully examined the judicial precedents relied upon by the Ld. Authorised Representative. In our considered opinion, those decisions are distinguishable on facts and do not govern the controversy before us. Most of the decisions relied upon either deal with

The Tribunal, being a statutory appellate authority, cannot grant equitable relief in contravention of an express statutory prohibition. Once the Legislature has made timely filing of return a condition for claiming deduction under Chapter VI-A, the same has to be given full effect. However, the statute itself recognizes that genuine hardship may arise in deserving cases. Accordingly, section 119(2)(b) empowers the competent authority to condone delay in filing the return and admit a claim where genuine hardship is established.

In the present case, the assessee has explained that the delay occurred because of alleged siphoning and embezzlement of funds by the erstwhile management, resulting in serious administrative and financial difficulties. Whether the said circumstances constitute "genuine hardship" warranting condonation is a matter falling exclusively within the jurisdiction of the authority empowered under section 119(2)(b). Considering the peculiar facts of the present case and in the interest of substantial justice, we deem it appropriate to grant liberty to the assessee to approach the competent authority under section 119(2)(b) of the Act by filing an application seeking condonation of delay in furnishing the returns of income for both the assessment years. In the event the competent authority condones the delay and directs admission of the claim, the Assessing Officer shall give effect to such order and examine the assessee's claim for deduction under section 80P on merits in

Accordingly, while we uphold the legal position that the deduction cannot presently be allowed in the absence of condonation of delay under section 119(2)(b), we restore the matter to the file of the Assessing Officer only for the limited purpose of giving effect to the order, if any, passed by the competent authority under section 119(2)(b) of the Act. The assessee is at liberty to file appropriate condonation petitions before the competent authority within a reasonable time. The Assessing Officer shall pass consequential orders in accordance with law after receipt of the order of the competent authority.

Since the facts and issue involved in Assessment Year 2019-20 are identical, our findings and directions rendered hereinabove for Assessment Year 2020-21 shall apply mutatis mutandis to ITA No.1515/Mum/2026 for Assessment Year 2019-20 also.

In the result, both the appeals of the assessee are allowed for statistical purposes in the above terms.

Order pronounced in the open court on 30/06/2026