PRATHAMIKA KRUSHI PATTINA SAHAKARA SANGHA NIYAMITHA BESAGARAHALLI,BESAGARAHALLI AND POST MADDUR TQ MANDYA DIST vs. THE INCOME TAX OFFICER WARD 1 & TPS MANDYA, MANDYA

At the outset, it was noticed that the appeal was filed with a delay of 24 days. On perusal of the petition filed for condonation of delay and affidavit, we find that there is sufficient cause for the assessee in filing the appeal belatedly. We therefore condone the delay and proceed to adjudicate the appeal on merits in the following paragraphs.

Briefly stated, the facts of the case are assessee a primary agricultural credit co- operative society registered under the Karnataka Co-operative Societies Act, 1959, filed its return on 14.07.2020, admitting a gross total income of Rs.16,99,289/- and has claimed deduction under section 80P of the Act amounting to Rs.13,10,275/-. The assessee received an intimation under section 143(1) of the Act dated 23.09.2020 wherein the CPC has denied the deduction claimed by the assessee under section 80P of the act.

On being aggrieved by the Order of the learned AO, assessee carried the matter before learned CIT(A). The learned CIT(A) noticed that assessee has filed return of income belatedly and thereby invoked the provisions of section 80AC of the Act and denied the deduction claimed by the assessee under section 80P of the Act thereby dismissing the appeal of the assessee.

On being aggrieved by the Order of the learned CIT(A), assessee is in appeal before us by raising the various grounds. The only issue contested by the assessee is with respect to denial of deduction under section 80P of the Act amounting to Rs.13,10,275/-. The learned AR submitted that the assessee situated in a rural area was not conversant with the provisions of income tax and hence could not file the return of income within the period specified under section 139(1) of the Act. He therefore prayed that the delay in filing the return of income shall be condoned and the deduction under section 80P of the Act claimed by the assessee be allowed.

Per contra, the learned DR filed written submissions and stated that deduction under section 80P of the Act shall be allowed only when the assessee filed the return of income under section 139(1) of the Act. The Finance Act, 2018, was amended w.e.f. 01.04.2018 and provides that no deduction under Part C of Chapter VI-A including the deduction under section 80P of the Act shall be allowed unless the return of income is 2 furnished on or before the due date specified under section 139(1) of the Act. He relied on the decision of the Hon’ble Madras High Court in AA520 Veerappampalayam Primary Agricultural Co-operative Credit Society Ltd., Vs. DCIT reported in [2022] 138 taxmann.com 571 (Mad.).

We have heard the rival contentions and perused the material available on record. Admittedly, the assessee has not filed its return of income within the due date under section 139(1) of the Act for the Assessment Year 2019-20. The assessee has filed its return of income belatedly on 14.07.2020 by claiming the deduction under section 80P of the Act. In this connection, section 80AC of the Act amended by the Finance Act, 2018, w.e.f. 01.04.2018 is extracted below:

From the plain reading of the section 80AC of the Act as referred above, it is clear that any deductions claimed under this Chapter under the heading "C.—Deductions in respect of certain incomes", no deduction shall be allowed unless the assessee files return of income for such assessment year on or before the due date specified under section 139(1) of the Act. Section 80AC of the Act limits its allowability of deduction under this Chapter in respect of certain incomes specifically for the return of income furnished on or before the due date specified under section 139(1) of the Act and not for the return of income furnished under any other section of the Act.

It cannot be given an interpretation to cover the return of income filed belatedly beyond the time limit specified under section 139(1) of the Act. We are therefore inclined to dismiss the appeal.

In the result, appeal of the assessee is dismissed.