NABARUN S K U S LTD.,NADIA vs. I.T.O.WARD-41(1), KRISHNANAGAR

PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. In this case, there is a delay of 532 days in filing of the said appeal. the delay has been requested to be condoned through an affidavit as under: “Sub:-Condonation of delay under clause (b) of sub-section (2) of section 119 of the Income-tax Act, 1961 for returns of income claiming deduction u/s 80P of the Act for various assessment years from AY 2018-19 to AY 2022-23-Reg Section 80P of the Income-tax Act, 1961 (hereafter referred to as 'Act') provides for deduction in respect of income of co-operative societies under Chapter VIA- Part-C ("Deductions in respect of certain incomes") of the Act. 2 In so far as section 80P of the Act is concerned, Finance Act, 2018 substituted

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section 80AC of the Act w.e.f. 01.04.2018 which provides as under-
Deduction not to be allowed unless return furnished.
80AC. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after
(i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction a admissible under section 80-IA or section 80-1AB or section 80-18 or section 80-IC or section 80-ID or section 80-IE
(ii) the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading "C-Deductions in respect of certain incomes"
no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub- section (1) of section 139. 3. Applications have been received in the Central Board of Direct Taxes (hereafter referred to as 'the Board") from co-operative societies claiming deduction u/s 80P of the Act for various assessment years from AY 2018-19 10 AY 2022-23, regarding condonation of delay in furnishing return of income and to treat such returns as 'returns furnished within the due date under sub-section (1) of section 139 of the Act stating that delay in furnishing return of income was caused due to delay in getting the accounts audited under respective State Laws.
4 In order to mitigate genuine hardship in cases referred to in para 3, the Board, in exercise of the powers conferred under section 119 of the Act, hereby directs that the Chief Commissioners of Income-tax (CCSIT) / Directors General of Income-tax (DGsIT) are authorised to deal with such applications of condonation of delay pending before the Board, upon transfer of such applications by the Board, and decide such applications on merits, in accordance with the law.
5. The Board hereby further directs that the CCsIT/DGsIT, henceforth, shall admit all pending as well as new applications for condonation of delay in furnishing returns of income claiming deduction u/s 80P of the Act, filed either in the Board or in field formation for the assessment years 2018-19 to 2022-23 and decide such applications on merits in accordance with the law where such person is required to get his accounts audited under respective State Laws.
6. In the context of para-5 above, the CCsIT/DGsIT while deciding such applications for condonation of delay in furnishing return of income, shall satisfy themselves that the applicant's case is a fit case for condonation under the existing provisions of the Act. The CCSIT/DGsIT shall examine the following while deciding such applications-
(i) the delay in furnishing the return of income within the due date under sub- section (1) of section 139 of the Act was caused due to circumstances beyond the control of the assessee with appropriate documentary evidence's;
(ii) where delay in furnishing return of income was caused due to delay in getting the accounts audited by statutory auditors appointed under the respective State
Law under which such person is required to get his accounts audited, the date of completion of audit vis-à-vis the due date of furnishing the return of income under sub-section (1) of section 139 of the Act; and 3
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(iii) any other issue indicating towards tax avoidance or tax evasion specific to the case, which comes into the light in the course of verification and having bearing either in the relevant assessment year or establishing connection of relevant assessment year with other assessment year's.
6.1 Taw The cases falling under para 6(iii) above, would require further necessary action as per law.
7. The CCsIT/DGsIT shall preferably dispose the application within three months from the end of the month in which such application is received from the applicant or transferred by the Board. No order rejecting the application under section 119(2)(b) of the Act shall be passed without providing the applicant an opportunity of being heard.”
1.1
Considering the reasons given in the said petition, the delay is hereby condoned and the appeal is admitted for adjudication.
2. This appeal arises from order u/s 250 of the Income Tax Act, 1961
(hereafter “the Act”), dated 03.05.2023, passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi
[hereafter “the Ld. CIT(A)”].
2.1
In this case, the Ld. AO-CPC has passed an order u/s 143(1) (dated
17.06.2019) by adding Rs. 6,32,161/- on account of the fact that the return of income was furnished on 11.03.2019 and following section 80AC(1) of the Act, the benefit u/s 80P of the Act could not be allowed due to delayed filing of the return of income.
2.2
The assessee did not succeed at first appeal stage and has therefore approached the ITAT with the following grounds:
“1. That, the Ld. Commissioner of Income Tax (Appeals), National Faceless
Appeal Centre, Delhi erred in confirming action of CPC Bengaluru by holding that claim made by the Appellant was "Incorrect claim as per Sec. 143(1) of the Income Tax Act, 1961. 2. That, the Ld. Commissioner of Income Tax (Appeals), National Faceless
Appeal Centre, Delhi erred in confirming action of CPC Bengaluru by disallowing claim of deduction of Rs. 19,43,520/- by failing to appreciate that provisions of under section 143(1)(a)(v) of the Income Tax Act, 1961 do not provide for denial of deduction under section 80P of the Act when the return of income is not filed within time allowed under section 139(1) read with under section 139(4) of the Income Tax Act, 1961
3. That the Ld Commissioner of Income Tax (Appeals), National Faceless Appeal
Centre, Delhi erred in upholding action of the CPC Bengaluru in making

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adjustment to the returned income of the Appellant by way of an intimation under section 143(1). of the Income Tax Act, 1961 and in denying the benefit of under section 80P of the Income Tax Act, 1961 of Rs. 19,43,520/- to the Appellant by failing to appreciate that this was not a prima facie adjustment permissible under section 143(1)(a) of the Income Tax Act, 1961
4. That, the Ld. Commissioner of Income Tax (Appeals), National Faceless
Appeal Centre, Delhi erred in not adjudicating ground of disallowance of claim of deduction of Rs. 19,43,520/-under section BOP of the Income Tax Act, 1961. 5. That, the Ld Commissioner of Income Tax (Appeals), National Faceless
Appeal Centre, Delhi erred in disallowing the claim of deduction under section 80P of the Income Tax Act, 1961 without appreciating the facts and nature of the Appellant as well as the entire transaction within member of the Appellant.
6. That, the Ld. Commissioner of Income Tax (Appeals), National Faceless
Appeal Centre, Delhi has erred in relying on various case laws, which are not at all applicable to the Appellant's case.
The aforesaid grounds are without prejudice to each other and the appellant craves leave to add/delete/alter and/or amend any of grounds as aforesaid as and when necessary.
Therefore, your Appellant prays before the Hon'ble Members of the Appellate
Tribunal for justice against decision made by the Ld Commissioner of Income
Tax (Appeals) as well as the Ld. Assessing Officer.
3. Before us, the Ld. AR argued that the power of Ld.AO-CPC to consider the provisions of section 80AC of the Act for the purposes of section 143(1) of the Act, were bestowed on him only w.e.f. 01.04.2021. The Ld. AR pointed out that an amendment was brought into the section 143(1)(a)(v) of the Act, from 1.4.2021, through which the entire Chapter VI-A was brought within the purview of section 143(1)(a) of the Act. It was the submission that before 01.04.2021 such an adjustment could not be made by the Ld. AO-CPC. The Ld. AR relied on several cases of Coordinate
Benches of the ITAT which have held accordingly.
3.1
The Ld. DR relied on the orders of authorities below.
4. We have carefully considered the rival submissions and have gone through the documents before us. Perusal of section 143(1)(a)(v) of the Act shows that indeed there is an amendment w.e.f. 01.04.2021, through which the provisions of Chapter-VI-A would be used for making any 5
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adjustment u/s 143(1)(a) of the Act. In this regard, the Coordinate Bench order in the case of Durgamondop Samaby Krishi Unnayan Samiti Ltd., ITA
No. 1153/Kol/2023, dated 24.07.2024, in which both of us were author and co-author, the following has been given as a finding:
“3. We have considered the rival submissions and also gone through the documents on record. For the sake of reference, the provisions of Section 143(1)(a)(v) of the Act as they stood prior to amendment, and relevant for the assessment year under consideration are as under:
"v) disallowance of deduction claimed under sections 10AA, 80-IA, 80-1AB,
80-IB, 80-IC, 80-ID or section 80-IE, if the return is furnished beyond the due date specified under sub-section (1) of section 1.39; or 3.1. Thereafter, with effect from 01.04.2021 the amended provisions read as under:
"(v) disallowance of deduction claimed under 98/section 10AA or under any of the provisions of Chapter VI-A (emphasis added) 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 3.2. Furthermore, Section 80AC of the Act reads as under:
"[Deduction not to be allowed unless return furnished.
80AC. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after-
(i) the 1st day of April, 2006 but before the 1 day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-
IB or section 80-I or section 80-ID or section 80-IE
(ii) the 1 day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading "C-Deductions in respect of certain incomes", no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139. 3.3. A careful perusal of the said Sections reveals that Section 143(1)(a) of the Act has been designed as a complete code in itself and lays down the mandate for any Assessing Officer undertaking processing of return of income under this Section.
Section 80AC of the Act is clearly outside of the purview of Section 143(1)(a) of the Act and would come into play in case of assessment order was being framed u/s 143(3) of the Act. In fact, this interpretation is strengthened by the judgment of Hon'ble Kerala High Court in the case of Nileshwar Rangekallu Chethu Vyavasaya
Thozhilali Sahakarana Sangham vs. CIT reported in [2023] 152 taxmann.com 347
(Kerala). The head notes are extracted for ready reference:
"Section 80P, read with sections 80A and 80AC, of the Income-tax Act, 1961
Deductions - Income of co-operative societies (Belated return) Assessment

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years 2009-10 and 2010-11 Assessee society, engaged in financing and social welfare of toddy tappers/workers, had claimed deduction under section 80P Assessing Officer made disallowance under section 80P(2)(a)(vi) since assessee's returns were filed much beyond date for filing prescribed under section 139 and even under section 148 On reading sections 80A(5) and 80AC as they stood prior to 1-4-2018, it was noted that statutory scheme under Act was to admit only such claims for deduction under section 80P as were made by assessee in return of income filed by him
However, after 1-4-2018, even if assessee made his claim for deduction under section 80P in a return filed within time under section 139/4), 142(1) or 148, he would not be allowed deduction unless return so filed was within due date prescribed under section 139(1) Whether since assessee had filed its return of income after dates prescribed under section 139(1), returns were indeed non-est and could not be acted upon by Assessing Officer even if they were filed before completion of assessment Held, yes Whether, since assessee failed to fulfil pre-condition prescribed under section 80P, it was not entitled to benefit of exemption under section 80P(2)(a)(vi) Held, yes
[Paras 11 to 14)
3.4. Thus, clearly since the processing has been done u/s 143(1)(a) of the Act, where the treatment to be given to items under Chapter VI (which includes Section 80P of the Act) is clearly mentioned then there can be no reason why the provisions of Section 80C of the Act will need to be resorted to for the limited purposes of processing of return. At the expense of repetition, it needs to mentioned that Section 80P of the Act was introduced for the purposes of Section 143(1)(a)(v) of the Act only with effect from 01.04.2021 Hence, any prior period return cannot be adversely effected in case it is not filed within the time prescribed u/s 139(1) of the Act. With this discussion. the appellant gets relief and the AO is directed to allow the benefit of Section 80P of the Act to the appellant.”
Considering the findings given in the above mentioned ITAT case
(supra), we hold that no adjustment could have been made u/s 143(1)(a) of the Act by the Ld. AO-CPC on account of any default mentioned in section 80AC of the Act for the Assessment Year under consideration. Accordingly, the addition made by the Ld. AO-CPC is directed to be deleted.
5. In result, appeal of the assessee is allowed.
Order pronounced on 01.12.2025 (Pradip Kumar Choubey) (Sanjay Awasthi)
Judicial Member Accountant Member
Dated: 01.12.2025
AK, Sr. P.S.

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Copy of the order forwarded to:
1. Appellant
2. Respondent
3. Pr. CIT
4. CIT(A)

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By order