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Facts
The assessee, a Cooperative Society, had its Section 80P deduction for A.Y. 2018-19 denied by the AO under Section 80AC because the Income Tax Return was filed belatedly on 29.03.2019, beyond the due date of 31.10.2018. The assessee has a pending application for condonation of delay in filing the ITR with the PCIT, Pune, which is relevant in light of CBDT Circular No. 13/2023 addressing such delays for cooperative societies.
Held
The Tribunal remitted the entire issue back to the ld. CIT(A) for fresh examination, with instructions to consider the outcome of the assessee's pending application for condonation of delay. The ld. CIT(A) is directed to afford a reasonable opportunity of hearing to the assessee and decide the matter in accordance with law.
Key Issues
Whether deduction under Section 80P is allowable for a cooperative society despite belated filing of the Income Tax Return, considering a pending application for condonation of delay and the applicability of Section 80AC.
Sections Cited
143(3), 143(3A), 143(3B), 139(1), 139(4), 80P, 80P(2)(a)(i), 80P(2)(d), 80AC, 143(1)(a), Chapter VIA
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Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BOARD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y.2018-19 is directed against the order dated 01.10.2024 framed by National Faceless Appeal Centre, Delhi emanating out of Assessment Order dated 08.02.2021 passed u/s.143(3) r.w.ss.143(3A) & 143(3B) of the Income Tax Act, 1961.
Assessee has raised following grounds of appeal:
“1. On the facts and in the circumstances of the case and in law, the Learned Assessing officer erred in not appreciating the genuine difficulty faced by the appellant society in filing its return of income before the due date specified in section 139(1), and also failed to appreciate the fact that return is being filed u/s. 139(4) is a valid return and appellant society is entitled for the deduction claimed in the return of income.
2. On the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in rejecting deduction u/s 80P (2)(a)(i) for a sum of Rs.1,25,85,180/- being part of the book profit of appellant society without appreciating the fact that earning of interest is an integral part of society's business and appellant prays for allowing such deduction.
On the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in treating the interest received from investment a sum of Rs.1,25,85,180/-, as income from other sources by rejecting appellants contention that said interest income is integral part of business activity and your appellant prays for cancellation of Assessing officer's action
Without prejudice to above ground on the facts and in the circumstances of the case and in law, the Learned Assessing Officer in not allowing the deduction under section 80P(2)(d) on interest income received from other co-operative society. Your appellants pray for allowing the same
5. Without prejudice to above ground, on the facts and in the circumstances of the case and in the law Learned Assessing Officer erred in treating entire interest income as interest income received from other co-operative society or bank without allowing deduction on account of interest/administrative expenses. Your appellant prays for such deduction.
Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice.”
3. At the outset, ld. Counsel for the assessee submitted that assessee filed an application dated 20.11.2024 to PCIT, Pune for condonation of delay in filing of the income-tax return within the statutory time limit provided u/s.139(1) of the Act and the outcome of the application is still pending. He therefore prayed for remitting the issues to the file of ld.CIT(A) for necessary adjudication .
4. On the other hand, ld. DR supported the order of ld.CIT(A)/NFAC.
We have heard the rival contentions and perused the record placed before us. We observe that the assessee is a Cooperative Society and assessment for A.Y. 2018-19 concluded on 08.02.2021 u/s.143(3) r.w.s.143(3A ) & 143(3B) of the Act after the case being selected for Limited Scrutiny for examining the deduction claimed under Chapter VIA. Ld. Assessing Officer (AO) denied the claim u/s.80P(2)(a)(i) of the Act by applying section 80AC of the Act as the assessee filed the return on 29.03.2019 which is beyond the due date of filing of the return of income on 31.10.2018. Aggrieved assessee preferred appeal before ld.CIT(A) but failed to succeed. Now the assessee is in appeal before this Tribunal.
We observe that after the amendment brought in w.e.f. 01.04.2018 in section 80AC of the Act, assessee in order to claim deduction under Chapter VI of the Act which in this case is section 80P is required to file the return of income within the prescribed time limit u/s.139(1) of the Act. Though in cases where the return is processed u/s.143(1)(a) of the Act CPC has been given the power to make prima-facie adjustments disallowing deduction under Chapter VIA if the return is filed beyond the prescribed due date u/s.139(1) of the Act only w.e.f. 01.04.2021, however, for the assessments completed u/s.143(3) of the Act, section 80AC of the Act shall apply with full force. In the instant case, assessee’s return is filed belatedly and therefore section 80AC has been invoked and deduction u/s.80P(2)(a)(i) of the Act has been denied. However, CBDT has issued Circular No.13/2023 dated 26.07.2023 for handling the applications for condonation of delay in filing of income-tax return by Cooperative Societies pursuant to amendment in section 80AC of the Act post which deductions under Chapter VIA cannot be allowed unless the assessee furnishes the return of income for such assessment year on or before the due date prescribed u/s.139(1) of the Act. CBDT in this circular No.13/2023 dated 26.07.2023 has observed that applications have been received from Cooperative Societies where deduction u/s.80P of the Act for various assessment years from A.Y. 2018-19 to A.Y. 2022-23 regarding condonation of delay in furnishing of return of income and to treat such returns as returns furnished within the due date u/s.139(1) of the Act, stating that delay in furnishing return of income was caused due to delay in getting accounts audited under respective laws. There are certain other directions given by CBDT in the circular No.13/2023 dated 26.07.2023 which prima-facie indicates that many applications have been filed for condonation of delay in filing of the return by the Cooperative Societies.
Similar is the situation before us in the instant case and the assessee’s application for condonation of delay in filing of ITR for A.Y. 2018-19 is still pending. Considering this fact and also observing that case has been adjourned for almost six occasions in the past, we deem it appropriate to remit the issue back to the file of ld.CIT(A) for fresh examination of the issue and in the meantime assessee shall follow up with the concerned authority for the early disposal of assessee’s pending application (referred above). Needless to mention that ld.CIT(A) in the set aside proceedings shall afford reasonable opportunity of hearing to the assessee and decide in accordance with law. Impugned order is set aside and the effective grounds raised in the instant appeal are allowed for statistical purposes.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on this 14th day of November, 2025.