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Facts
The assessee, a cooperative society, failed to file its income tax return for AY 2018-19 within the stipulated due date. Consequently, the Assessing Officer initiated reassessment proceedings and denied the deduction claimed under Section 80P.
Held
The Tribunal held that the deduction under Section 80P is admissible only if the return of income is filed within the prescribed due date, relying on a decision of the Madras High Court. As the assessee filed a belated return, the deduction was rightly denied.
Key Issues
Whether deduction under Section 80P is admissible if the return of income is filed after the due date, and whether Section 143(1)(a) adjustments are applicable in such cases.
Sections Cited
148A, 148, 147, 144B, 139(1), 80P, 80AC, 143(1)(a)
AI-generated summary — verify with the full judgment below
This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) [in short, the ld. CIT(A)] dated 03/07/2025 for the Assessment Year (AY) 2018-19 as per ground of appeal on record. The assessee has also filed Stay application arising out of the present appeal.
2 ITA 2159/Chny/2025 546 Sulur Primary Agriculture Co-Op Credit Society Vs ITO
The facts of the case in brief are that the assessee is a cooperative society registered under Tamil Nadu Co-operative Societies Act, 1983. The assessee is a primary agricultural Co-operative society and credit society formed with an objection of providing credit facilities to its members, who are primarily agriculturist, to improve their economic conditions, for this purpose of providing credit facilities to its members, the assessee collects deposits from its members, borrow funds from bank, lends to farmers and its members provide group loans to self-help groups and collects the repayments of jewel loan, agricultural loans and all other loans etc. The assessee-society also runs ration shops and supply groceries to the general public at subsidized rate and it also distributes Pongal bonus etc. However, it was found by the Assessing Officer that the assessee had not filed its return of income for the A.Y. 2018-19, therefore, a show cause notice under Section 148A(b) of the Income Tax Act, 1961 (in short, the Act) was issued on 21/02/2022 by the Assessing Officer after getting approval of the ld. PCIT, Coimbatore-1. Since there was no response from the assessee, an order under Section 148A(d) of the Act was passed on 31/03/2022 with the approval of ld. PCIT, Coimbatore-1 and finally, a notice under Section 148 of the Act dated 05/04/2022 was issued to the assessee. In response to the notice issued under Section 148, the assessee filed its return of income on 02/05/2022 declaring income of Rs. ‘NIL’ after claiming deduction under Section 80P(2)(a) of the Act amounting to Rs. 27,502/-, under Section 80P(2)(c)(i) of the Act amounting to Rs. 2/- and under Section 80P(2)(d) of the Act amounting to Rs. 28,44,970/- totaling Rs. 28,72,474/-. The Assessing Officer, however, denied the 3 ITA 2159/Chny/2025 546 Sulur Primary Agriculture Co-Op Credit Society Vs ITO said deduction claimed under Section 80AC and under Section 80P of the Act on the ground that the return of income was not filed within stipulated time period, therefore, the assessment order under Section 147 r.w.s. 144B of the Act dated 19/01/2024 was passed and the income of the cooperative society was assessed at Rs. 28,72,474/-.
Aggrieved by the order of Assessing Officer, the assessee filed appeal before the ld. CIT(A). The ld. CIT(A) vide the impugned order, confirmed the order passed by the Assessing Officer on the ground that return was not filed under Section 139(1) and the return filed under Section 148 of the Act was a belated return and, therefore, the assessee is not eligible to get deduction under Section 80AC and 80P of the Act.
Further aggrieved by the order of ld. CIT(A), the present appeal has been filed by the assessee before this Tribunal.
During the appellate proceedings before us, it was submitted by the ld. AR that it was beyond the scope of Section 143(1)(a)(ii) of the Act. It was submitted that power to disallow a claim under Chapter VI-A (including Section 80P) for non- filing of return within the due date under Section 139(1) of the Act was introduced into Section 143(1)(a) specifically through sub-clause (v) by the Finance Act, 2021 w.e.f. April,1, 2021. Therefore, this provision is not applicable for the assessment year under consideration. Further, it was submitted that the Assessing Officer and the ld. CIT(A) failed to appreciate that prior to the amendment by the Finance Act, 2021, the scope of adjustments under Section 143(1)(a) was limited to arithmetical errors, incorrect claims apparent from 4 ITA 2159/Chny/2025 546 Sulur Primary Agriculture Co-Op Credit Society Vs ITO information in the return (as defined in the explanation), and disallowance of expenditure indicated in the audit report but not taken into account. The belated filing of return, in itself, did not constitute an “incorrect claim” apparent from the return for the purpose of disallowance under Section 143(1)(a)(ii) for the relevant assessment year. The ld. AR of the assessee further submitted that placing reliance by the lower authorities of the decision of the Hon’ble Madras High Court in the case of Veerapampalayam Primary Agricultural Cooperative Credit Society Ltd. Vs DCIT (138 taxmann.com 571) (Mad) is misplaced and the said case is distinguishable on facts and law. It was further submitted that the Assessing Officer should have followed the principles laid down in the cases supporting the assessee’s contention, such as Thachanattukara Farmers Producer Company Ltd. Vs ITO, Wad-1, Palakkad and Premier Cooperative Credit Vs CIT(A), the principles regarding Section 80P deduction and 143(1) adjustments are relevant. Finally, the ld. AR submitted that since the assessee has fulfilled all the conditions for claiming deduction under Section 80P of the Act, the Assessing Officer and the ld. CIT(A) should have allowed the same.
On the other hand, the ld. CIT-DR supported the order of the ld. CIT(A) and placed reliance on the decision of Hon’ble Madras High Court in the case of Veerapampalayam Primary Agricultural Cooperative Credit Society Ltd. Vs DCIT (Supra) wherein the Hon’ble Madras High Court has dealt with identical issue and held that the deduction under Section 80P of the Act is admissible only if the return of income is filed within the prescribed due date and such adjustments fall within the scope of Section 143(1)(a) of the Act.
5 ITA 2159/Chny/2025 546 Sulur Primary Agriculture Co-Op Credit Society Vs ITO
We have considered the rival submissions and we do not find any reason to deviate from the decision of the Hon’ble Madras High Court in the case of Veerapampalayam Primary Agricultural Cooperative Credit Society Ltd. Vs DCIT (Supra) wherein it has already been held that for claiming of deduction under Section 80P, the return of income should have been filed within the stipulated due date. In the present case, the assessee-society has filed its return of income after the stipulated time. Accordingly, the appeal of the assessee is dismissed.
Now we take S.A. No. 79/Chny/2025. Since the quantum appeal of the assessee for the A.Y. 2018-19 is dismissed, the said Stay application becomes infructuous and also dismissed.
In the result, the appeal and the Stay application of the assessee are dismissed.
Order pronounced in the open court on 26/09/2025.