AA520 VEERAPPAMPALAYAM PACS LTD.,ERODE vs. ITO, WARD-2(1), ERODE

The assessee is a co-operative society and filed its return of income on 25.02.2019 admitting total income at Nil. The assessee in the return of income has claimed deduction u/s. 80P(2)(a)(i) of the Act and 80P(2)(d) of the Act. The A.O in the assessment order passed u/s. 143(3) r.w.s 143(3A) & 143(3B) of the Act has disallowed the claim of deduction u/s. 80P of the Act on the ground that the assessee has not filled return within the due date prescribed. The A.O has also held that assessee is not eligible for claim of deduction u/s 80P(2)(d) in respect of interest income as it has made deposit in the co-operative bank and not co-operative societies. On appeal, the Ld. CIT(A) has confirmed the addition as the assessee has not filed return of income within due date and has also confirmed the disallowance u/s. 80P of the Act holding that income is not earned by applying the principle of mutuality .

The Ld. Authorized Representative (A.R) of the assessee has submitted that the assessee has filed a petition for condonation of delay in filing return of income u/s.119(2)(b) of the Act, which is pending before CCIT, Coimbatore. The Ld. AR further submitted that the Ld. CIT(A) has decided the appeal without considering the fact that the assessee’s petition for condonation of delay in filing return is pending before the CCIT. The Ld. AR therefore requested that the order of Ld. CIT(A) may be set aside and he may be directed to await the decision of the CCIT. The Ld AR has also relied on the order of Hon’ble Jurisdictional High Court in the case of CIT v. Salem Agriculture Producers Co-operative Marketing Society Ltd in Tax Appeal No 5 of 2015 on disallowances u/s 80P(2)(d) of the Act.

The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities.

We have heard the rival submissions, and perused the materials available on record. The Ld. CIT(A) has confirmed the disallowances of claim of deduction u/s 80P of the Act as the assessee has not filed return within the due date prescribed. The Ld AR has submitted that assessee has filled condonation petition for condoning the delay in filing return of income and same is pending before CCIT, Coimbatore, therefore the Ld. CIT(A) was not justified to dismiss appeal without awaiting for the order of the CCIT on its petition. We note that assessee has filled condonation petition on 20.03.2024 before CCIT Coimbatore and the same was pending at the time of deciding the appeal before Ld CIT(A). We, therefore remit the matter to the file of Ld. CIT(A) for deciding the appeal after the decision of CCIT. We also direct the Ld. CIT(A) to decide the issue of allowability of the claim u/s 80P(2)(d) of the Act in view of the decision of Hon’ble Jurisdictional High Court in the case of CIT Salem vs. The Salem Agriculture Producers Co-operative Marketing Society Ltd, supra. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.

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