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Income Tax Appellate Tribunal, “SMC” BENCH, PUNE
Before: SHRI MANISH BORAD & MS. ASTHA CHANDRA
Assessment Year : 2020-21 Ajinkya Madhyamik Shikshak Income Tax Officer, Sevak Sah. Patsanstha Maryadit, Ward – 2, Satara 769, Jagtap Colony, Malhar Peth, Vs. Satara – 415001 PAN : AAAAA3002D अपीलधर्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Prateek Jha Department by : Shri Akhilesh Srivastava Date of hearing : 22-04-2025 Date of 18-06-2025 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 15.10.2024 of the Ld. Additional/Joint Commissioner of Income Tax (Appeals)-5, Delhi [“Addl./JCIT(A)”] pertaining to Assessment Year (“AY”) 2020-21.
The assessee has raised the following grounds of appeal :
1. The Ld CIT(A) erred in dismissing the appeal on the ground that the assessee had not filed its return under section 139(1) of the IT Act and therefore, it was not entitled to deduction under section 80P ignoring the Circular No. 08 of 2021 of the CBDT.
2. The Ld CIT(A) erred in not appreciating that denial of deduction claimed under section 80P of the IT Act while processing return under section 143(1) was without jurisdiction and bad in law.
3. The Ld CIT(A) erred in not appreciating that the assessee was entitled to deduction of Rs.36,53,421/-under section 80P of the IT Act and the Ld ADIT, CPC, was not justified in denying this claim.
4. The Ld CIT(A) erred in not appreciating that the ITR could not be filed within time allowed under section 139(1) because of the Pandemic and the ITR was uploaded on the website on 13.05.2021 that is within the time extended by the CBDT.
5. The above grounds of appeal are without prejudice to one another.
6. The appellant craves leave to furnish Additional Evidence which may be relevant to the above Grounds of Appeal
in course of the appeal proceedings.
7. The appellant craves leave to amend or alter any of the above Grounds of Appeal or to add new Grounds of Appeal during the course of appeal proceedings.”
Briefly stated, the facts of the case, as culled out from the statement of facts filed along with Form 35, are that the assessee is a patsanstha and engaged in accepting deposits from its members and in turn providing credit facilities to its members. It provides its members with loans and earns interest thereon. The income of the assessee is eligible for claim of deduction u/s 80P of the Income Tax Act, 1961 (the “Act”). For AY 2020- 21, the assessee did not file its return of income within time available u/s 139(1) of the Act. However, the date of filing of return was extended to 31.05.2021 for AY 2020-21 owing to Covid-19 Pandemic period. Accordingly, the assessee uploaded its ITR on 13.05.2021. Thereafter, the assessee received intimation u/s 143(1) of the Act from the CPC, Bengaluru (“CPC”) wherein the assessee’s claim of deduction of Rs.36,53,421/- u/s 80P of the Act was denied.
The assessee preferred an appeal before the Ld. Addl./JCIT(A), inter alia raising following contentions : “6.1 The Ld ADIT has not given reasons for denying the assessee deduction claimed under section 80P of the IT Act in the intimation issued under section 143(1) of the IT Act. It appears however that he did so on the ground that the return of income was not uploaded within time available under section 139(1) of the I T Act. 6.2 Section 80AC of the IT Act provides that where in the computing the total income of the assessee of any prevision year relevant to the assessment year commencing on or after first day 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 return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139. 6.3 The assessee had tiled return of income on 13.05.2021. Due date for filing this return was 31.10.2020 under the normal circumstances. However, the pandemic COVID-19 broke out at massive scale in India in the month of March, 2020 and the Government had to declare lock down and curtail activities of the public to stop the spread of the pandemic. The Government and also the Supreme Court took cognizance of this pandemic and inconvenience caused to the public and extended the limitation dates for compliances. The Central Board of Direct Taxes issued Circular No. 08/2021 dated 30 April, 2021 extending the various dates. Vide para 1 (d) of the Circular the date for filing of belated return was extended till 31" May, 2021. The assessee therefore, had time to file its return on or before 31.05.2021. The assessee files its ITR on 13.05.2021 i.e. within time.
6.4 In view of this fact the assessee was not hit by the provisions of section 80AC of the IT Act. The assessee was entitled to deduction under section 80P of the IT Act. A copy of the Circular No. 08 of 2021 is attached herewith.”
The Ld. Addl./JCIT(A) did not accept the above contentions of the assessee and dismissed the appeal of the assessee applying the provisions of section 80AC of the Act for the reason that the return of income for the relevant AY 2020-21 under consideration was not filed by the assessee within the due date specified u/s 139(1) of the Act. The relevant observations and findings of the Ld. Addl./JCIT(A) as under:
“6. Decision The only effective ground in this appeal is on account of disallowance of deduction claimed u/s 80P(2)(a)(i) of Rs. 36,53,721/- of the Income Tax Act. It is appropriate to reiterate that the appellant is a cooperative society who filed belated income tax return u/s 139(4) on 13.05.2021 declaring a gross total income of Rs.1,39,490/- and claimed deductions under Chapter VIA, specifically under Section 80P(2)(a)(i) of the Income Tax Act, leading to a declaration of total taxable income as Nil. The appellant has relied upon CBDT circular 8/2021 which is reproduced below: Circular No. 08/2021 F.NO 225/49/2021/ITA-II Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, Dated 30th April 2021
Subject: Extension of time lines related to certain compliances by the Taxpayers under the Income-tax Act 1961. 1 In view of severe pandemic the Central Board of Direct Taxes, in exercise of its powers under Section 1th of the income-tax Act 1961, provides following relaxation in respect of Income-tax compliances by the taxpayers. a) Appeal to Commissioner (Appeals) under Chapter XX of the income-tax Act, 1961 for which the last date of filing under that Section is 1 April 2021 or thereafter, may be filed within the time provided under that Section or by 31 May 2021, whichever is later, b) Objections to Dispute Resolution Panel (DRP) under Section 144C of the income-tax Act 1961, for which the last date of fling under that Section is 1st April 2021 or thereafter may be filed within the time provided under that Section or by 31st May 2021, whichever is later, c) Income tax return in response to notice under Section 148 of the Income- tax Act, 1961 for which the last date of filing of return of income under the said notice is 1st April 2021 or thereafter, may be filed within the time allowed under that notice or by 31st May 2021, whichever is later. d) Filing of belated return under sub-section (4) and revised return under sub-section (5) of Section 139 of the income-tax Act 1961 for Assessment Year 2020-21, which was required to be filed on or before 31st March 2021, may be filed on or before 31st May 2021, e) Payment of tax deducted under Section 194-IA, Section 194-IB and Section 194M of the Income-tax Act, 1961 and filing of challan-cum-statement for such tax deducted, which are required to be paid and furnished by 30th April 2021 under Rule 30 of the Income-tax Rules. 1962 may be paid and furnished on or before 31 May 2021. f) Statement in Form No 61, containing particulars of declarations received in Form No. 60, which is due to be furnished on or before 30 April 2021, may be furnished on or before 31 May 2021 sd/- (Ravinder Maini) Director to the Government of India.
Thus, the facts of the case are that the appellant has filed belated return/s 139(4) on 13.05.2021 that too by virtue of Circular 8/2021 which extended date to file belated return on or before May 31,2021. If the assessee has filed a belated return of income, then the deduction claimed u/s 80P is not allowed on the grounds that the return has to be filed within time frame provided under section 139. As per sec 80A (5) if the claim under sec 10 provisions or deduction under heading C for certain income is not made by the assessee in his return of income the deduction is denied. As per sec 80AC deduction is allowed only if in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after 1st day of April, 2018 if return is filed within due date specified under sec 139(1). Hence there exist no infirmity in order of Ld AO and no interference is called for.
7. In result, the appeal is dismissed.”
6. The Ld. AR reiterated the submissions made before the Ld. Addl./JCIT(A) reproduced above and contended that the impugned deduction u/s 80P claimed by the assessee is not hit by the provisions of section 80AC of the Act as the due date for filing of the return of income for relevant AY 2020-21 was extended to 31.05.2021 vide CBDT Circular No. 8/2021. The assessee filed its return on 13.05.2021 which was well within the extended due date. Further, relying on the decision of the Delhi Bench of the Tribunal in the case of Sahakari Ganna Vikas Samiti Sikri Gate Vs. ITO in for AY 2019-20, dated 19.07.2023 and the Lucknow Bench of the Tribunal in the case of Sahkari Ganna Vikas Samiti Ltd. Vs. ACIT (2024) 169 taxmann.com 300 (Lucknow – Trib.) the Ld. AR submitted that the provisions of section 80AC of the Act will not apply to the case of the assessee for AY 2020-21 presently under appeal.
7. The Ld. DR supported the order of the Ld. AO/Ld. Addl./JCIT(A) and submitted that the provisions of section 80AC are applicable for AY 2020- 21 and therefore no interference with the order of the Ld. Addl./JCIT(A) is called for.
8. We have heard the Ld. Representatives of the parties and perused the material available on record as well as judicial precedents relied upon by the Ld. AR. The facts of the case are not in dispute. Admittedly, the assessee filed return after the specified due date u/s 139(1) of the Act but it was filed on 13.05.2021 within the extended time granted vide CBDT Circular No. 8/2021. The claim of deduction u/s 80P of the Act was denied by the CPC in its intimation order under section 143(1) of the Act as the return of income was not filed by the assessee within the specified due date. The Ld. Addl./JCIT(A) confirmed the action of the CPC for the reasons reproduced in preceding paragraphs. We find that the impugned issue is no longer res-integra. The identical issue had come up for adjudication before the Delhi Bench of the Tribunal in the case of Sahakari Ganna Vikas Samiti Sikri Gate (supra) and the Lucknow Bench of the Tribunal in the case of Sahkari Ganna Vikas Samiti Ltd. (supra) wherein after analyzing the provisions of section 80AC and section 143(1) and subsequent amendment thereto, it was held that such adjustments under Chapter VI-A was not permissible u/s 143(1) of the Act in respect of assessment years prior to assessment year 2021-22. The relevant findings and observations of the Delhi Bench of the Tribunal in the case of Sahakari Ganna Vikas Samiti Sikri Gate (supra) pertaining to AY 2019-20 are reproduced below : “3. When the matter was called for hearing, the Learned Counsel submitted that the deduction has been denied taking shelter of Section 80AC(ii) of the Act. In this regard, it was submitted that the assessee has filed and uploaded the return which is belated by only one day on account of technical difficulties in the Income-tax site. It was further submitted that in the instant case, the intimation has been drawn under Section 143(1) of the Act which specifies the nature of adjustments under Section 143(1)(a) of the Act permissible for adjustments. Section 143(1)(a)(v) of the Act concerns disallowance of deduction under Chapter VI-A. Section 80P of the Act falls under "C.-Deductions in respect of certain incomes". The Learned Counsel pointed out that such disallowance under Section 143(1) of the Act is not permissible in view of the insertion/modification made which is made effective by the Finance Act 2021 from A.Y. 2021-22 whereas the present case concerns A.Y. 2019-20 where such amendment to Section 143(1)(v) of the Act authorising such denial was not in place. Learned Counsel also referred to the judgement of Co-ordinate Bench of Tribunal in the case of Kishorepur Paschimanchal SKUS Limited vs. ITO (ITA No.716/Kol/2022) order dated 22.05.2023 to buttress his stand. The Learned Counsel thus urged for suitable relief. 4. The Learned DR for the Revenue, on the other hand, relied upon the action of the Revenue authorities and submitted that in view of express provisions of Section 80AC of the Act applicable to A.Y. 2019- 20 in question, the Revenue authorities were fully justified in denying the deduction where the return was filed beyond the date specified under Section 139(1) of the Act. Learned DR thus submitted that no interference with the order of CIT(A) is called for. 5. We have carefully considered the rival submissions. The denial of benefit of deduction under Section 80P of the Act in response of belated return is in issue. In the instant case, the return was filed belatedly under Section 139(4) of the Act. While drawing the intimation under Section 143(1) of the Act, the CPC, Bengaluru has denied the claim of deduction under Section 80P of the Act owing to ROI filed after due date. The assessee sought rectification thereof under Section 154 of the Act which was reported. The CIT(A) in the first appeal also refused to entertain rectification of mistake towards aforesaid deduction claimed under Section 80P of the Act. Hence, in this appeal.
We find that the issue is no longer res integra. The identical issue has come up before the Co-ordinate Bench of Tribunal in the case of Kishorepur Paschimanchal SKUS Limited (supra) wherein after taking note of provisions of Section 80AC of the Act and provision of Section 143(1) and subsequent amendment thereto, it was concluded that such adjustments under Chapter VI-A was not permissible under Section 143(1) of the Act in response of assessment years prior to A.Y. 2021-22.
The relevant operative para of the order of the decision rendered by the Co-ordinate Bench is reproduced hereunder: “7. We have heard rival contentions and perused the materials available on record. It is apparent from the order of the ld. CIT(A) that the amendment in Section 143(1) made by Finance Act, 2021 which is not applicable for the present Assessment Year 2019-20. However, the same was not considered by the Ld. CIT(A). 7.1. The Co-ordinate Bench of this Tribunal in Lunidhar Seva Sahakari Mandali Ltd. (supra) considered the above amendment and held as follows: “7. We have heard the rival contentions and perused the material on record. In the instant facts, admittedly the assessee did not file return of income within the time permissible under section 139(1) of the Act. However, the assessee filed its return of income belatedly on 30-11-2020 and claimed deduction of Rs. 2,22,704/- under section 80P of the Act. The issue for consideration before us is that whether once the return of income is filed beyond the prescribed date under section 139(1) of the Act, can the deduction under section 80P of the Act be denied to the assessee, by way of adjustment under section 143(1) of the Act. On going through the statutory provisions, we observe that 80AC of the Act provides that no such deduction under section 80P of the Act shall be allowed to an assessee unless he furnishes a return of his income on or before the due date specified under section 139(1) w.e.f. assessment year 2018-19 onwards. However, section 143(1)(a)(v) of the Act provides that disallowance of deduction claimed under any of the provisions of Chapter VI-A under the heading "C.—Deductions in respect of certain incomes" (which includes deduction under section 80P of the Act), can be made if the return is furnished beyond the due date specified under sub-section (1) of section 139. This amendment has been introduced w.e.f. 1-4-2021. Accordingly, the above amendment would not apply to the impugned assessment year. Further, section 143(1)(ii) of the Act permits adjustment in case of an incorrect claim, if such incorrect claim is apparent from any information in the return. However, Explanation to the aforesaid section specifies the following cases where the claim made in the return of income can be said to be “incorrect” for the purposes of this sub-section: (a) "an incorrect claim apparent from any information in the return" shall mean a claim, on the basis of an entry, in the return,— (i) of an item, which is inconsistent with another entry of the same or some other item in such return;
(ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction. 7.1 A joint reading of the above provisions makes it evident that the claim of deduction under section 80P of the Act cannot be allowed the assessee, if the assessee does not file its return of income within the due date stipulated under section 139(1) of the Act w.e.f. assessment year 2018-19 onwards. However, we also note that amendment has been introduced in section 143(1)(a)(v) of the Act to provide that the claim of deduction under section 80P of the Act can be denied to the assessee, in case the assessee does not file its return of income within the time prescribed under section 139(1) of the Act with effect from 01-04-2021 and does not apply to the impugned assessment year i.e. assessment year 2019-20 relevant to financial year 2018-19. Accordingly, in our considered view, denial of claim under section 80P of the Act would not come within the purview of prima facie adjustment under section 143(1)(a)(v) of the Act, for the simple reason that the section was not in force during the period under consideration i.e. assessment year 2019-20. 7.2 The second issue for consideration is that whether the case of the assessee would fall within the purview of prima facie adjustment under section 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return). In our view, the scope of the adjustments that can be made under the said provision has been elaborated in the Explanation to the aforesaid section, which does not include denial of deduction claimed by the assessee in case the assessee does not furnish its return of income within the date stipulated under section 139(1) of the Act. The Explanation to the said section specifically provides for cases/instances when the claim made by the assessee could be said to be “incorrect”. Therefore, in our considered view, the case of the assessee would also not fall within the purview of prima facie adjustment under section 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return). 7.3 We note that in the case of Chirakkal Service Co-Operative Bank Ltd. Kannur v. CIT 2016] 68 taxmann.com 298 (Kerala), the Kerala High Court held that a return filed by assessee beyond period stipulated under section 139(1) or 139(4) or under section 142(1) or section 148 can also be accepted and acted upon for entertaining claim raised under section 80P provided further proceedings in relation to such assessments are pending in statutory hierarchy of adjudication in terms of provisions of Act. In the case of ASR Engg. & Projects Ltd. [2019] 111 taxmann.com 49 (Hyderabad - Trib.), the ITAT held that to be eligible to make claim under section 80-IA or any other section of Chapter VI A, assessee should have filed return of income under section 139(1) and even if it did not make claim for deduction in original return and subsequently file revised return making such claim, its claim for deduction under section 80-IA is maintainable. Therefore, where assessee had filed return under section 139(1), it was entitled to claim deduction under section 80-IA even if such claim was not made in original return but subsequently in revised return filed in response to notice issued under section 153A. In the case of Lanjani Co-Operative Agri Service Society Ltd. (CPC) v. DCIT [2023] 146 taxmann.com 468 (Chandigarh - Trib.), the ITAT held that the enabling provisions of sub-clause (v) of section 143(1) providing for disallowance of deduction under section 80P due to late filing of return having been introduced by Finance Act, 2021 effective from 1-4-2021, disallowance of deduction claimed under section 80P during relevant years 2018-19 and 2019-20 on grounds of late filing of return was unjustified. 7.4 We note that the instant case, there was a delay in filing the return of income by the assessee for the assessment year 2019-20 and return of income was filed within due date permissible u/s 139(4) of the Act, in which the claim for deduction u/s 80P of the Act was made. Therefore, looking into the totality of facts, we are of the view that claim of deduction u/s 80P of the Act cannot be denied to the assessee only on the basis that the assessee did not file return of income its return of income within due date u/s 139(1) of the Act, in light of the discussion and judicial precedents highlighted above.
In the result, appeal of the assessee is allowed.” 7.2. Consistent with the view taken by the Tribunal under identical circumstances, we have no hesitation in holding that the assessee cannot be denied the deduction u/s. 80P of the Act on the ground that the return of income was not filed within the due date prescribed u/s. 139(1) of the Act under proceedings made u/s. 143(1) of the Act for the Assessment Year 2019-20. Thus the intimation u/s 143(1) dated 28/09/2020 is invalid in law and thereby quashed.
8. In the result, the appeal of the assessee is allowed.
8. In the light of observations towards impermissibility to make adjustments towards deduction claimed under Section 80P of the Act prior to the amendment carried out in Section 143(1)(a)(v) of the Act effective prospectively from 01.04.2021 i.e. A.Y. 2021-22, we are of the view that CPC, Bengaluru has committed prima facie error in making adjustments to the returned income on account of deduction claimed under Section 80P of the Act while drawing intimation under Section 143(1) of the Act. We, thus, find merit in the plea of the assessee seeking rectification of the apparent error. Consequently, we set aside the order of the CIT(A) and direct the designated authority/CPC, Bengaluru to restore the deduction claimed under Section 80P of the Act made by the assessee.”
Similar view has been taken by the Lucknow Bench of the Tribunal (supra), the relevant extract of which is reproduced below :
“5.1 The assessee‟s claim for deduction under section 80P of the Act falls under provisions of Chapter VIA of the Act. It is a fact that the amendment to Section 143(1)(a)(v) of the Act, enabling disallowance of deduction claimed Chapter VIA of the Act, was made by the Finance Act, 2021, w.e.f. 01.04.2021. The present case before us pertains to assessment year 2019- 20 (previous year 2018-19). It can be readily inferred, therefore, that an assessee will not be hit by provisions of Section 80AC of the Act, having regard to the assessee claim for deductions under Chapter VIA of I. T. Act, while processing the return and making adjustments under section 143(1) of the Act. It follows accordingly that in the present case before us, the assessee‟s claim for deduction under section 80P of the Act (which falls under Chapter VI-A of the Act) is not hit by Section 80AC of the Act while processing the return and making adjustments under section 143(1) of the Act. In coming to this conclusion, we take strength from the following precedents: - i. Sahakari Ganna Vikas Samiti, Sikri Gate Chandausi, Sambhal Vs. ITO-2(5), Chandausi Uttar Pradesh (supra). ii. (2023) 149 taxmann.com 28 (Rajkot-Trib) in the ITAT Rajkot Bench, Lunidhar Seva Sahkari Mandali Ltd Vs. Assessing Officer (CPC) iii. (2023) 146 taxmann.com 468 (Chandigarh-Trib) (SMC) in Lanjani Co-operative Agri Service Society Ltd (CPC) v Deputy Commissioner of Income Tax, CPC iv. Order dated 22/05/2023 of Income Tax Appellate Tribunal „A‟ (SMC) Bench, Kolkata in Assessment Year: 2019-20 (Kishorepur Paschimanlal skus Limited v ITO.
6. Respectfully following the aforesaid judicial precedents and in view of the foregoing discussion and in the specific facts and circumstances of the present case before us, we direct the Assessing Officer to allow the assessee‟s claim under section 80P of the Act, amounting to Rs.1,63,83,734/-.”
Based on the facts of the case and the legal position enumerated above and respectfully following the decisions (supra) of the Co-ordinate Bench(es) of the Tribunal and in the absence of any contrary material/decisions brought on record by the Revenue, we set aside the order of the Ld. Addl./JCIT(A) and direct the CPC to modify the assessment by allowing the assessee’s claim of deduction u/s 80P of the Act for AY 2020-21. All the grounds raised by the assessee are accordingly allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 18th June, 2025.
Sd/- Sd/- (Manish Borad) (Astha Chandra) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ददन ांक / Dated : 18th June, 2025. रदि आदेश की प्रनिनलनप अग्रेनर्ि / Copy of the Order forwarded to : अपील थी / The Appellant. 1. प्रत्यथी / The Respondent. 2. 3. The Pr. CIT concerned. धिभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, “एक सदस्य मामला” बेंच, 4. पुणे / DR, ITAT, “SMC” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. //सत्य दपत प्रदत// True Copy// आदेश नुस र / BY ORDER,
िररष्ठ दनजी सदिि / Sr. Private Secretary आयकर अपीलीय अदधकरण ,पुणे / ITAT, Pune