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Facts
The assessee, a Primary Agricultural Credit Cooperative Society, filed its income tax return for A.Y. 2018-19 belatedly, claiming a deduction under Section 80P. The CPC disallowed the Section 80P deduction via an intimation under Section 143(1)(a) due to the late filing. The Ld. Addl./JCIT(A) dismissed the assessee's appeal, advising to seek condonation of delay from the CCIT, leading the assessee to appeal to the Tribunal.
Held
The Tribunal held that the CPC was not justified in disallowing the Section 80P deduction for A.Y. 2018-19 because the amendment to Section 143(1)(a), which granted CPC the power to make such disallowances for belated returns, came into effect only from A.Y. 2021-22. Relying on a coordinate bench decision, the Tribunal reversed the lower authorities' order and directed the Assessing Officer to allow the deduction.
Key Issues
Whether the CPC was justified in denying the Section 80P deduction for a belatedly filed return for A.Y. 2018-19, given that the relevant amendment to Section 143(1)(a) came into effect from A.Y. 2021-22.
Sections Cited
250, 143(1)(a), 139(4), 139(1), 80P, 143(1)(a)(v), 143(1)(a)(ii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA BENCHES “SMC”, KOLKATA
Before: DR.MANISH BORAD
Assessee by : Shri Soumitra Choudhry, A.R. Revenue by : Smt. Madhumita Das, Addl. CIT Date of hearing : 27.11.2024 Date of pronouncement : 05.02.2025 आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal pertaining to Assessment Year 2018- 19 at the instance of assessee is directed against the order dated 25.07.2024 passed by Addl./JCIT(A)-5, Delhi u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) which in turn is arising out of Intimation Order dated 04.07.2019 passed u/s. 143(1)(a) of the Act.
Briefly stated, the facts of the case are that the assessee is a Primary Agricultural Credit Cooperative Society carrying on the banking business. The assessee filed the return of income u/s.139(4) of the Act for the A.Y. 2018-19 on 18.03.2019 as against the due date for filing the return on 31.08.2018, 2 Shyamganj Pirijpur Samabay Krishi Unnayan Samity Ltd., declaring Nil income after claiming deduction u/s.80P of the Act at Rs.5,46,053/-. The CPC vide its intimation dated 04.07.2019 made adjustment in the returned income for non-filing of the income-tax return u/s.139(1) of the Act, thereby disallowed the said claim made u/s.80P of the Act.
Aggrieved assessee preferred appeal before the ld.Addl/JCIT(A) who vide impugned order dismissed the appeal but giving liberty to the assessee to prefer the alternate remedy available before the CCIT by observing as under :
“The only effective ground in this appeal is regarding addition of Rs. 5,46,053/- on account of disallowance of deduction claimed u/s 80P of the Act. It is brought on record that the due date of filing of the ITR in this case was 31.08.2018. However, the appellant filed its ITR on 18.03.2019 i.e. after the due date of filing of the ITR. Therefore, as the assessee violates the provisions of Section 80P of the Act, the CPC disallowed the deduction claimed u/s 80P of the Act. In this regard, it is reiterated that this appeal pertains to the denial of the deduction under section 80P of the Act due to the late filing of the Income Tax Return (ITR) for the Assessment Year 2018-19. The appellant has argued that the delay in filing the ITR was due to ignorance and delay in statutory audit. Upon a thorough examination of the facts and circumstances of the case, it is noted that the cooperative society did indeed file the ITR beyond the prescribed due date. As per the provisions of the Income Tax Act, adherence to timelines is crucial for claiming deductions under various sections, including section 80P. The Act mandates strict compliance with the filing deadlines to ensure the timely processing and verification of returns. The Act provides clear guidelines that must be followed to ensure uniformity and predictability in tax administration. Notwithstanding the above, the appellant is advised to seek remedy by making an application before the concerned Chief Commissioner of Income Tax (CCIT) for the condonation of delay. This is in accordance with Instruction No. R11015/01/2023-CD-I dated 03.08.2023 issued by the Government of India, Ministry of Cooperation, which provides for the consideration of such cases on merit. The Instruction allows taxpayers who have missed the filing deadline due to genuine reasons to apply for relief, thereby ensuring that the denial of deductions does not result in undue hardship. The CCIT is empowered to condone the delay if a satisfactory explanation is provided. In conclusion, while the appeal regarding the denial of the 80P deduction due to late filing is dismissed as per the statutory requirements of the Income Tax Act, the appellant is encouraged to pursue the available remedy through the application to the CCIT. This order is thus disposed of with the advice to the 3 Shyamganj Pirijpur Samabay Krishi Unnayan Samity Ltd., appellant to take necessary steps in line with the guidance provided by the Ministry of Cooperation to potentially secure the desired deduction. In the result, the appeal is dismissed.
Now the assessee is in appeal before the Tribunal assailing the impugned order.
I have heard the parties and perused the record placed before me. The solitary issue arises for my consideration is whether the CPC was justified in denying the deduction claimed by the assessee u/s.80P of the Act for filing the return belatedly. An amendment was brought in section 143(1)(a) of the Act by the Finance Act, 2021 w.e.f. 01.04.2021 giving powers to the CPC for disallowing the claim of deduction u/s.80P of the Act if return of income is not filed within the statutory time limit provided u/s.139(1) of the Act. However, prior to amendment, there was no mechanism for CPC to deny the deduction u/s.80P of the Act. Admittedly, the assessment year under consideration is 2018-19 whereas the amendment has been brought in from A.Y. 2021-22 and therefore the CPC erred in making the adjustment by way of disallowing deduction u/s.80 of the Act in the instant case. My view is fortified by the decision of Coordinate Bench of the Tribunal in the case of Finolex Industries Ltd. Employees Co-o. Credit Society Ltd. Vs. ITO in dated 03.04.2023 wherein the issue was decided in favour of the assessee by observing as under :
5. We have heard the submissions of the parties, considered the relevant materials/documents on record and analysed the facts and circumstances in this case. Section143(1)(a)(v) of the Act spells out that if any deduction is claimed under any of the provisions of Chapter VI-A which include deduction u/s 80P such deduction has to be allowed only if the return is filed within due date specified under sub-section 139(1) of the Act. In other words, if any return is filed beyond due date u/s 139(1) of the Act then no deduction u/s 80P shall be allowed. However, clause (v) was inserted by the Finance Act, 2021 w.e.f. 01- 4 Shyamganj Pirijpur Samabay Krishi Unnayan Samity Ltd., 04-2021. The case of the assessee, on the other hand, is for F.Y. 2018- 19 relevant to A.Y. 2019-20 which is the period prior to amendment brought in by the Finance Act, 2021. Before this amendment, clause (v) did not include and cover deduction u/s 80P. So therefore, in the present Case of the assessee though admittedly return was filed beyond the time limit prescribed u/s 139(1) of the Act but still section 143(1)(a)(v) is not applicable to the assessee since the case of the assessee is for A.Y. 2019-20, which is before the amendment. We also accept the argument of the ld. A.R for the assessee that even if the revenue intends to invoke clause (ii) of section 143(1)(a) that would also not be permissible since in the definition of incorrect claim as provided in the provision, the deduction u/s 80P is not included anywhere and is therefore, outside the purview of the said provision. Therefore, rigors of provisions of section 143(1)(a)(ii) and clause (v) are not applicable to the case of the assessee. On this legal ground itself, the assessee succeeds and any other grounds on merits, if any, becomes academic in nature.
On perusal of the above, I find that the facts of the above case are identical to the instant case of assessee. Following the decision of the Coordinate Bench of the Tribunal (supra), I hold that CPC was not justified in disallowing the deduction claimed by assessee u/s.80P of the Act for A.Y. 2018-19 as the powers for doing so were brought into the Act from A.Y. 2021-22. I therefore reverse the impugned order of the lower authorities and direct the Assessing Officer to allow the deduction claimed by the assessee u/s.80P of the Act. Grounds raised by the assessee are allowed.