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Facts
The assessee, a co-operative society, filed its income tax return for AY 2018-19 belatedly. The CPC processed the return under section 143(1) and disallowed the deduction claimed under section 80P for non-submission of the return by the due date.
Held
The Tribunal held that the CPC did not have the power to disallow the deduction under section 80P while processing the return under section 143(1) for the assessment year 2018-19, as this power was granted to the AO effective from 01.04.2021.
Key Issues
Whether the CPC had the power to disallow the deduction u/s 80P of the Act while processing the return u/s 143(1) for AY 2018-19, given the amendment by the Finance Act, 2021?
Sections Cited
139, 143(1), 80P, 143(1)(a)(v)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Assessment Year: 2018-19 Paschim Putiary Cooperative Credit Society Samity Limited...….……….Appellant 328A, Nalini Bhawan, Banerjee Para Road, Kudghat, Kol-41. [PAN: AABAP7929B] vs. ITO, Ward-25(1), Kolkata.………….....................……........……...…..…..Respondent Appearances by: Shri G. Banerjee, AR, appeared on behalf of the assessee. Shri Archana Gupta, Addl. CIT, Sr. DR, appeared on behalf of the Revenue. Date of concluding the hearing : May 14, 2025 Date of pronouncing the order : May 16, 2025 ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal of the assessee for the assessment year 2018-19 is directed against the order dated 26.03.2024 passed by the ld. Commissioner of Income-tax, Appeals, NFAC, Delhi [hereinafter referred to as ‘the ‘ld. CIT(A)’].
Brief facts of the case are that the assessee is a Co-operative Society registered under West Bengal Co-operative Societies Act, 2013 as amended up to date. Assessee filed its income tax return u/s 139 of the Act for A.Y. 2018-19 on 30.03.2019. The return of the assessee was processed u/s 143(1) of the Income Tax Act, 1961 and thereafter the assessee received an intimation on 25.06.2019 in which an amount of Rs.3,50,338/- was disallowed by Deputy Director of Income Tax, CPC by disallowing the statutory deduction u/s 80P of the Act for non- submission of income tax return within due date i.e. 31.08.2018.
Dissatisfied with the above order, the assessee is in appeal before authorities below. However, the appeal of the assessee was dismissed by NFAC, Delhi vide order dated 26.03.2024. At the time of hearing, the ld. AR submitted that the assessee is a co-operative society registered under West Bengal Cooperative Societies Act, 2013 amended upto date. For the assessment year under consideration, the return of income has been filed by the assessee belatedly that is beyond the date prescribed u/s 139(1) of the Act. Details of which are given below: AY Due date Date of filing 2018-19 31.08.2018 30.03.2019
The return of the assessee for the year under consideration was processed u/s 143(1) of the Act by the CPC wherein the deduction claimed by the assessee u/s 80P of the Act was disallowed. In the appellate proceedings, the ld. CIT(A) stated that assessee has filed return of income belatedly and accordingly, the ld. CIT(A) confirmed the rejection of claim for deduction u/s 80P of the Act made by the AO in the intimation issued u/s 143(1) of the Act. In this regard, the ld. AR submitted that impugned adjustment made by way of disallowance of claim u/s 80P of the Act is beyond power of Assessing Officer during the year under consideration. The ld. AR invited our attention to the provisions of section 143(1)(a)(v) of the Act and submitted that the power to disallow the claim u/s 80P has been given to the AO w.e.f. 01.04.2021 by Finance Act, 2021 relevant to A.Y. 2021-22. Accordingly, the ld. AR submitted that the CPC was not empowered to disallow the claim of the assessee u/s 80P of the Act for the year under consideration while processing return u/s 143(1) of the Act. On the contrary, the ld. DR supported the order passed by the ld. CIT(A). 2
We have heard rival contention of the parties and perused the material available on record in the instant case. There is no dispute that the assessee had made claim u/s 80P of the Act. The ld. AR also brought to our notice that the power to make disallowance of deduction under the head “C – deduction in respect of certain incomes” under Chapter VIA while processing the return u/s 143(1) of the Act has been given to the AO by Finance Act, 2021 w.e.f. 01.04.2021 relevant to A.Y. 2021-22. This provision was introduced from A.Y. 2021-22 but the same cannot be given effect to instant assessment year 2018-19. Therefore, there was no power available with CPC to disallow the claim made under “C – deduction in respect of certain income” under chapter VIA. Hence, for all the reasoning mentioned above, we are of the view that the CPC could not have disallowed the deduction claimed by the assessee u/s 80P of the Act for the assessment year under consideration while processing the return of income u/s 143(1) of the Act. Accordingly, we set aside the order passed by the ld. CIT(A) on this issue for the assessment year under consideration and direct the CPC/AO to delete the disallowance of claim for deduction made u/s 80P of the Act.