AMASEBAIL VYVASAYA SEVA SAHAKARI SANGHA LIMITED,UDUPI vs. DEPUTY COMMISSIONER OF INCOME TAX, CPC, BENGALURU

This appeal by assessee is directed against the order of Ld. CIT(A) dated 24.3.2022. The assessee has raised following grounds of appeal:- 1. “In the facts and circumstances of the case, the Assessing Officer and the Appellate Authority erred in denying the benefit of deduction under Sec. 80P (2) of the Income Tax Act, 1961 to the appellant.

The Ld. A.R. submitted that assessee is entitled for deduction u/s 80P of the Act, though assessee has not filed the return of income. In this regard, he relied on the judgement in the case of Chirakkal Co-Operative Bank Ltd. Vs. CIT 384 ITR 490 (Kerala), wherein held as under:- "19. Section 80A(5) provides that where the assessee fails to make a claim in his return of income for any deduction, inter alia, under any provision of Chapter VI-A under the heading "C. — Deductions in respect of certain incomes", no deduction shall be allowed to him thereunder. Therefore, in cases where no returns have been filed for a particular assessment year, no deductions shall be allowed. This embargo in section 80A(5) would apply, though section 80P is not included in section 80AC. This is so because, the inhibition against allowing deduction is worded in quite similar terms in sections 80A(5) and 80AC, of which section 80A(5) is a provision inserted through the Finance Act 33 of 2009 with effect from April 1, 2013, after the insertion of section 80AC as per the Finance Act of 2006 with effect from April 1, 2006. This clearly evidences the legislative intendment that the inhibition contained in sub-section (5) of section 80A would operate by itself. In cases where returns have been filed, the question of exemptions or deductions referable to section 80P would definitely have to be considered and granted if eligible. 20. Here, questions would arise as to whether belated returns filed beyond the period stipulated under section 139(1) or section 139(4) as well as following sections 142(1) and 148 proceedings could be considered for exemption. If those returns are eligible to be accepted in terms of law, going by the provisions of the statute

On the other hand, Ld. D.R. submitted that assessee is not entitled for deduction u/s 80P of the Act, which is applicable from assessment year 2018-19 and in this regard, he relied on the judgement of Hon’ble Madras High Court in W.P. No.7038 of 2020 dated 7.4.2021, wherein held as under:- "7. The scope of an 'intimation' under Section 143 (1) (a) of the Act, extends to the making of adjustments based upon errors apparent from the return of income and patent from the record. Thus to say that the scope of 'incorrect claim' should be circumscribed and restricted by the Explanation which employs the term 'entry' would, in my view, not be correct and the provision must be given full and unfettered play. The explanation cannot curtail or restrict the main thrust or scope

I heard the rival submissions and perused the materials available on record. In this case, the main plea of the assessee is that assessee filed an application for condonation of delay in filing the income tax return for the assessment year 2018-19 and on this basis, exemption u/s 80P of the Act to be granted. In my opinion, if the delay is condoned by the competent authority, assessee is entitled for exemption u/s 80P of the Act in accordance with law. Hence, I remit the issue to the file of AO to examine whether application filed by the assessee on 30.11.2018 before PCIT, Central Revenue Building, Attavara, Bengaluru for condoning the delay in filing the return of income for the assessment year 2018-19. If it is condoned by the competent authority, the exemption u/s 80P of the Act is to be granted though it was filed belatedly. With this observation, I remit the issue to the file of AO for fresh consideration.