VARDAYINI CO-OPERATIVE HOUSING SOCIETY LIMITED,PUNE vs. INCOME TAX OFFICER, WARD-2(2), PUNE, PUNE

This appeal filed by the assessee is directed against the order dated 25.07.2024 passed by Ld. CIT(A)/NFAC for the assessment year 2020-21.

Thus, appeal filed by the appellant stands dismissed.”

We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book and case law furnished by the counsel of the assessee. In this regard, we find that the assessee co-operative society has furnished its return of income belatedly. The extended last date for furnishing return of income for assessment year 2020-21 was 15.02.2021 whereas the assessee co-operative society has furnished its return of income on 31.03.2021. Ld. CIT(A)/NFAC in the light of section 80AC held that if the return is not furnished u/s 139(1) of the IT Act the assessee is not entitled to claim deduction u/s 80P of the IT Act. Accordingly, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee. In this regard, we find that the assessee before us has claimed that interest income from other co-operative society is only Rs.13,88,673/- which was claimed as deductible u/s 80P(2)(d) of the IT Act. Admittedly, the return of income was not furnished u/s 139(1) of the IT Act and therefore, we do not find any error in the order passed by Ld. CIT(A)/NFAC wherein he disallowed the claim made by the assessee u/s 80P(2)(d) of the IT Act. However, we also find that CBDT has issued Circular No.13/2023 [F. NO. 173/21/2023-ITA-I] wherein liberty was given to the assessee to pray for condonation of delay in filing of return of income, which reads as under :- “CIRCULAR NO. 13/2023 [F. NO. 173/21/2023-ITA-I], DATED 26-7-2023 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.

In so far as section 80P of the Act is concerned, Finance Act, 2018 substituted section 80AC of the Act w.e.f. 1-4-2018 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 is admissible under section 80-1A or section 80-1AB or section 80-IB or section 80- 1C or section 80-ID or section 80-IE; (ii) the 1st day of April, 2018, any deduction is admissible under any Chapter under the heading "C—Deduct ions 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.

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 to 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.

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.

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.

In the context of para-5 above, the CCsIT/DGsIT white 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-a-vis the due date of furnishing the return of income under sub-section (I) of section 139 of the Act; and (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 The cases falling under para 6(iii) above, would require further necessary action as per law.

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. Vikas Singh, Director (ITA-1)” However Ld. AR of the assessee could not furnish any such information that the assessee has applied in the light of above circular for condonation of delay in filing the return of income for the period under consideration or not. Considering the totality of the facts of the case and in the interest of justice, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC in this regard and remand the matter back to the file of the Assessing Officer to decide the issue of deduction u/s 80P(2)(d) of the IT Act afresh if the assessee furnishes any order condoning the delay in filing of return of income in the light of CBDT circular for the period under consideration.