F.V. 112 THE VILLUPURAM DISTRICT PUBLIC HEALTH DEPARTMENT EMPLOYEES COOP THRIFT AND CREDIT SOCIETY,VILLUPURAM vs. INCOME TAX OFFICER, VILLUPURAM
आयकर अपीलीय अिधकरण‘सी’ ायपीठ, चेई।
IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI
ी मनु कुमार िग र, ाियक सद एवं एस. आर. रघुनाथा, लेखा सद के सम(
BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No.2047/Chny/2025
िनधा8रण वष8 /Assessment Year: 2019-20
FV 112 The Villupuram District Public
Health Department Employees Co-op.
Thrift and Credit Society, 60,
Kandasamy layout, 1st Street, (K.K.
Road), Villupuram 605 602,
Viluppuram
[PAN: AAAAF4857B]
Vs.
The Income Tax Officer,
Ward-1,
Vilupuram.
(अपीलाथ/Appellant)
( यथ/Respondent)
अपीलाथE की ओर से/ Appellant by :
Shri G. Reddi Prakash, C.A.
GHथE की ओर से /Respondent by :
Ms. R. Anita, Addl. CIT
सुनवाई की तारीख/Date of Hearing
:
18.09.2025
घोषणा की तारीख /Date of Pronouncement
:
10.10.2025
आदेश / O R D E R
PER MANU KUMAR GIRI (Judicial Member):
This appeal by the assessee is directed against order of the Ld.
Commissioner of Income-tax (Appeals),ADDL/JCIT(A)-5 Delhi [in short
'the Ld. CIT(A)'] dated 04.02.2025 for assessment year 2019-20. 2. There is a delay of 85 days in filing this appeal. The assessee has filed petition along with affidavit for condonation of delay stating therein the reasons for belated filing of the appeal. On perusal of the aforesaid reasons in the condonation application, we are of the view that there is FV 112 – The Vilupuram.
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sufficient cause for belated filing of this appeal. Hence, we condone the delay in filing this appeal and proceed to dispose of the appeals on merits.
Briefly stated facts of the case are that the assessee, a cooperative credit society registered under the Tamil Nadu Co-operative Societies Act, 1983, filed its Income Tax Return for the Assessment Year 2019-20 on 30.11.2020, declaring total income as Nil after claiming a deduction of Rs.51,21,967/- under Chapter VI-A of the Act. However, during processing, this deduction was disallowed by CPC, resulting in the computation of total income at Rs.51,21,970/- Aggrieved by this order, the assessee preferred an appeal before the ld. CIT(A).
The ground of appeal primarily contended before the ld. CIT(A) is that the order under section 143(1)(a) is bad in law, as section 143(1)(a) does not empower the Assessing Officer to deny deduction under section 80P merely due to the belated filing of the return under section 139(4).
During appellate proceedings, the assessee submitted a written response, reiterating that the delay in filing the return was due to the election process in the society and that the statutory audit was conducted as per the prescribed regulations The assessee also cited various judicial precedents in support of its contention that denial of deduction under FV 112 – The Vilupuram. :- 3 -:
section 80P could not have been made as a prima facie adjustment under section 143(1)(a). Upon consideration of the facts and submissions, it is observed that the provisions of section 80AC mandate that no deduction under section 80P shall be allowed unless the return is filed within the due date specified under section 139(1). Section 80AC was introduced to ensure timely compliance with tax filing obligations for claiming deductions under Chapter VI-A. The legislative intent behind this provision is to streamline tax administration by making it obligatory for taxpayers to file returns within the prescribed timeline to avail deductions.
It applies to all deductions under Chapter VI-A, including section 80P, and reinforces the importance of timely compliance in taxation. Further,
CBDT Circular No. 13 of 2023, issued vide letter F.No. 173/21/2023-ITA-I dated 26.07.2023, provides a mechanism for taxpayers to seek condonation of delay in filing returns in cases where genuine hardships caused the delay. The circular emphasizes that condonation applications should be filed with the juri ictional authority, citing valid reasons for the delay and providing supporting documentation. The competent authority may condone the delay if satisfied with the reasons, thereby allowing the taxpayer to claim deductions that were otherwise disallowed due to the late filing of the return. While, the assessee has cited judicial precedents supporting its claim, the proper remedy for claiming the deduction would
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be to seek condonation of delay in filing the return before the competent authority under the provisions of the Act. In view of the above, the ld.
CIT(A) dismissed the appeal with a direction to the assessee to file a condonation of delay request before the appropriate authority in accordance with CBDT Circular No. 13 of 2023 and the Assessing Officer shall revisit the deduction claim of the assessee on disposal of the condonation petition.
The ld.AR filed the coordinate orders of the Tribunal which have decided the issue in question in favour of the assessee. The details of the orders are as under: i) Chennai Kulalers Co-operative Credit Society Limited (Regd. No.X35) Vs DCIT [ITA No.712/Chny/2022 for AY 2018-19 dated 12.10.2022]
ii) Villupuram District Revenue Department Employees Coop Thrift and Credit Society Vs ITO [ITA No.51/Chny/2024 for AY 2019-20 dated
31.05.2024]
The ld. DR vehemently supported the orders of the authorities below and pleaded for the dismissal of the appeal of the assessee.
We have gone through the rival submissions, materials on record and the orders of the authorities below. The coordinate orders of the Tribunal in the case of Chennai Kulalers Co-operative Credit Society Limited (Regd. No.X35) Vs DCIT [ITA No.712/Chny/2022 for AY 2018-19 dated 12.10.2022 held as under: FV 112 – The Vilupuram. :- 5 -:
The Ld. AR submitted that such an adjustment could have been made by CPC only w.e.f. Assessment Year (AY) 2021-22 since the amendment to Sec. 143(1)(a) was made by Finance Act, 2021 w.e.f. 01.04.2021. For the same, Ld. AR drew our attention to the relevant amendment made by Finance Act, 2021. The Ld. Sr. DR relied on impugned order wherein learned first appellate authority has relied on the provisions of Sec.80AC to confirm the adjustment so made in the intimation issued by CPC. Having heard rival submissions, the appeal is disposed-off as under.
The relevant provisions of Section 143(1)(a) prescribing processing of return of income (as amended by Finance Act, 2018), as applicable to AY 2018-19, read as under:
143(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:— (a) the total income or loss shall be computed after making the following adjustments, namely:—
(i) any arithmetical error in the return;
(ii) an incorrect claim, if such incorrect claim is apparent from any information in the return;
(iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under subsection (1) of section 139;
(iv) disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return;
(v) disallowance of deduction claimed under sections 10AA. 80-IA. 80-IAB. 80- IB.
80-IC. 80-ID or section 80-IE. if the return is furnished beyond the due date specified under sub- j section (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return:
It could be seen that sub-clause (v) covers only specified Sections and do not cover
Sec.80P. In other words, no adjustment of deduction claimed u/s 80P could have been made while processing the return of income.
4. The sub-clause (v) has been amended by Finance Act, 2021 and the amended sub-clause read as under: -
……
(v) disallowance of deduction claimed under section 10AA or under any of the provisions of Chapter VI-A under the heading "C.—Deductions in respect of certain incomes", if the return is furnished beyond the due date specified under sub-section (1) of section 139: or …….
Section 80P fall under Chapter VI-A under the heading “C-Deductions in respect of certain incomes”. The rational for the amendment, as given in the memorandum explaining the provisions in the Finance Bill, 2021 is as under: -
Rationalisation of the provision relating to processing of returned income and issuance of notice under sub-section (2) of section 143 of the Act.
The existing provisions of clause (a) of sub-section (1) of section 143 of the Act provides that at the time of processing of return of income made under section 139, or in response to a notice under sub-section (1) of section 142, the total income or loss shall be computed after making the adjustments specified in clauses (i) to (vi) therein.
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It is proposed to amend the following provisions of sub-section (1) of section 143 of the Act,-
(i)
Amend sub-clause (iv) of clause (a) of sub-section (1) of the section 143 of the Act, to allow for the adjustment on account of increase in income indicated in the audit report but not taken into account in computing the total income.
(ii)
Amend sub-clause (v) of clause (a) of sub-section (1) of the section 143 of the Act so as to give consequential effect to amendment carried out in section 80 AC vide
Finance Act, 2018. (iii)
Amend the provisions of section 143 to reduce the time limit for sending intimation under sub-section (1) of section 143 of the Act from one year to nine months from the end of the financial year in which the return was furnished.
Consequently, it is also proposed to reduce the time limit for issue of notice under sub- section (2) of section 143 of the Act from six months to three months from the end of the financial year in which the return is furnished.
These amendments will take effect from 1st April, 2021
It could thus be seen that the enabling provisions allowing specified adjustment for Sec. 80P u/s 143(1)(a) has been brought on statute only with effect from 01.04.2021 and before that no such adjustment of deduction u/s 80P could have been done by the CPC u/s 143(1)(a) even if the return of income was filed beyond due date as specified u/s 139(1). No doubt, the provisions of Sec.80AC mandate denial of deduction u/s 80P even for AY 2018-19. However, in our considered opinion, without there being corresponding enabling provisions u/s 143(1)(a), no such adjustment could have been made by CPC for AY 2018- 19. The same is amply clear from the memorandum explaining the provisions in the Finance Bill, 2021 as extracted above. Considering the same, we direct revenue to grant deduction u/s 80P as claimed by the assessee in the return of income. No other ground has been urged before us.
The appeal stand partly allowed.
The Coordinate Bench orders of the Tribunal in the case of Villupuram District Revenue Department Employees Coop Thrift and Credit Society Vs ITO [ITA No.51/Chny/2024 for AY 2019-20 dated 31.05.2024 held as under: 3.0 The only issue under consideration is the action of the Ld.CIT(A) in confirming action of CPC, Bangalore by which a deduction of Rs. 17,15,750/- was denied under 143(1)(a)(v). In the instant case return of income for AY-2019-20 was filed on 16.10.2020 as belated return u/s 139(4). The Ld.CIT(A) has concurred with the findings of CPC that u/s.80AC, deduction u/s.80P shall be allowed only to assessee if the return is filed in time u/s 139(1). It is the case of the assessee that the law has been FV 112 – The Vilupuram. :- 7 -:
wrongly interpreted by the revenue has the impugned provision enabling
CPC to make adjustments kick started only w.e.f 01.04.2021. 4.0 In support of its contentions, the appellate has relied upon the decision of the Hon’ble Bangalore ITI in the case of Villupuram Credit Society, inter-alia holding as under:-
It could thus be seen that the enabling provisions allowing specified adjustment for Sec. 80P u/s 143(1)(a) has been brought on statute only with effect from 01.04.2021 and before that no such adjustment of deduction u/s 80P could have been done by the CPC u/s 143(1)
(a) even if the return of income was filed beyond due date as specified u/s 139(1). No doubt, the provisions of Sec.0AC mandate denial of deduction u/s 80P even for AY2018-19, However, in our considered opinion, without there being corresponding enabling provisions u/s 143(1) (a), no such adjustment could have been made by CPC for AY 2018-19, The same is amply clear from the memorandum explaining the provisions in the Finance Bill, 2021 as extracted above. Considering the same, we direct revenue to grant deduction u/s 80P as claimed by the assessee in the return of income."
0 We have considered the rival submissions in the light of facts of the case and material available on records. It is seen that decision on identical facts has been taken by this tribunal in ITA No.1003/Chny/2022 dated 20.02.2023 and in ITA No.712/Chny/2022 dated 12.10.2022. In the impugned cases revenue was directed to grant deduction u/s. 80P as claimed by the assessee. As the facts of the present case are identical to the said decision, respectfully following the same, the revenue directed to grant deduction u/s.80P to the assessee.
0 In the result the appeal is allowed.
The Ld. D.R referred the judgment of the Hon’ble Juri ictional High Court in the case of AA520 Veerappampalayam Primary Agricultural Cooperative Credit Society Ltd. Vs. DCIT [2022] 138 taxmann.com 571 (Madras) dated 07.04.2021. 11. We find that the present issue in question is squarely covered by the orders of the Co-ordinate Benches of Tribunal referred supra. The FV 112 – The Vilupuram. :- 8 -:
judgment of the Hon’ble Juri ictional High Court in the case of AA520
Veerappampalayam Primary Agricultural Cooperative Credit Society Ltd.
Vs. DCIT [2022] 138 taxmann.com 571 (Madras) is not applicable in view of amendment in Section 143(1)(a) of the Act w.e.f 01.04.2021. Hence, respectfully following the Co-ordinate Bench orders referred supra, we direct the A.O to allow the deduction u/s. 80P of the Act to the assessee.
In the result, the appeal of the assessee is allowed.
Order is pronounced on 10th day of October, 2025 at Chennai. (एस. आर. रघुनाथा)
(S.R. Raghunatha)
लेखा
लेखा
लेखा
लेखा सदय
सदय
सदय
सदय /Accountant Member
(मनु कुमार िग र)
(Manu Kumar Giri)
ाियक सद / Judicial Member
चेनई/Chennai, दनांक/Dated: 10th October, 2025. EDN/-
आदेश की ितिलिप अ ेिषत/Copy to:
1. अपीलाथ/Appellant
2. थ/Respondent
3. आयकर आयु/CIT, Chennai
4. िवभागीय ितिनिध/DR
5. गाड फाईल/GF