SRI KALABHAIRAWESHWARA MULTI-PURPOSE CO-OP.SOCIETY LIMITED ,CHIKKAMAGALURU vs. INCOME TAX OFFICER, WARD-1, CHIKKAMAGALURU

This is an appeal filed by the assessee against the order passed by the NFAC, Delhi vide order dated 16/06/2025 in DIN No. ITBA/NFAC/S/250/2025-26/1077046791(1) for the assessment year 2019-20.

The only issue raised by the assessee is that the learned CIT(A) erred in denying the benefit of deduction claimed by the assessee under section 80P of the Act, on account of non-filing of the return of income within the due date specified under section 139 of the Act.

In the present case, the assessee is a co-operative society. The assessee failed to file the return of income under section 139(1) of the Act. Accordingly, proceedings were initiated under section 148 of the Act. The assessee, in response to the notice issued under section 148 of the Act, claimed deduction under section 80P(2)(a)(i) of the Act amounting to ₹38,58,079.00. However, the same was denied by the AO under the provisions of section 80AC of the Act on account of non-filing of the return of income within the time stipulated under section 139(1) of the Act. On appeal, the learned CIT(A) confirmed the finding of the AO.

Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us.

The learned AR before us fairly admitted that the assessee was denied the benefit of section 80P(2)(a)(i) of the Act for the assessment ear 2018–19 on account of non-filing of the return of income within the stipulated time specified under section 139(1) of the Act. Such denial of deduction was also upheld by the ITAT in for the assessment year 2018–19, vide order dated 17 October 2024.

Accordingly, the learned AR submitted that the benefit of deduction under section 80P of the Act can also be denied for the year in dispute. However, the learned AR further submitted that the assessee has claimed deduction of the interest income under section 80P(2)(a)(i) of the Act on a gross basis i.e. ₹38,58,079.00 which has been made subject to addition. This means that the corresponding cost incurred by the assessee against such interest income was not allowed while calculating the income of the assessee. According to the learned AR, the net income of the assessee stands at ₹17,20,751 only, and therefore, only this net income should be made subject to taxation, instead of the gross receipt representing interest ₹38,58,079.00 only.

On the other hand, the learned DR could not controvert the arguments advanced by the learned AR for the assessee.

We have heard the rival contentions of both parties and perused the materials available on record. On perusal of the statement of income placed at page 32 of the appeal set, we note that the gross total income of the assessee stands at ₹17,20,751 only, whereas the assessee has claimed the deduction of ₹38,58,079 under section 80P of the Act. The AO held that since the return was filed late, the assessee is not eligible for deduction under section 80P of the Act.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

In this regard, we note that once the main appeal filed by the assessee has been disposed of, there is no reason to adjudicate the stay petition filed by the assessee. As such, the stay petition filed by the assessee in the given facts and circumstances becomes infructuous and does not require any separate adjudication. Accordingly, the stay petition filed by the assessee is hereby dismissed as infructuous.

In the result, the stay petition filed by the assessee is hereby dismissed as infructuous.

In the combined result, the appeal filed by the assessee is allowed for statistical purposes whereas the stay petition filed by the assessee is hereby dismissed as infructuous.