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Income Tax Appellate Tribunal, Hyderabad SMC Bench, Hyderabad
Before: Shri R. K. PANDA
आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad SMC Bench, Hyderabad Before Shri R. K. PANDA, ACCOUNTANT MEMBER & 251/Hyd/2022 Assessment Year: 2018-19 JMJ Mahila Mutually Vs. Income Tax Officer Aided Coop. Thrift Dev. Ward 2 Credit & Marketing Mahaboobnagar Mahaboobnagar PAN:AACAJ0879P (Appellant) (Respondent) Assessee by: Sri E.S. Ranganath, CA Revenue by: Sri Y Sesha Srinivas,DR Date of hearing: 14/07/2022 Date of pronouncement: 15/07/2022 ORDER The above two appeals filed by the assessee are directed against the separate orders dated 6.4.2022 of the learned CIT (A)- NFAC, relating to A.Y. 2018-19. ITA 248/Hyd/2022 relates to the order of the CIT (A)-NFAC in confirming the order of the CPC Bengaluru in not allowing deduction u/s 80P of the I.T. Act and CIT (A)- NFAC in upholding the dismissal of rectification application filed before the CPC Bengaluru. For the sake of convenience, both these appeals were heard together and are being disposed of by this common order.
Facts of the case, in brief, are that the assessee is a cooperative society providing credit to its members. It filed its return of income on 18.10.2018 declaring Nil income and claimed Page 1 of 7 exemption of Rs.4,19,204/-u/s 80P of the I.T. Act. The Assessing Officer passed the order u/s 143(1) of the I.T. Act and disallowed the deduction u/s 80P of the I.T. Act on the ground that the return was filed on 18.10.2018 instead of on or before 31/8/2018 without audit report u/s 44AB. The assessee filed rectification application with the Assessing Officer which was rejected by the Assessing Officer.
3. The assessee filed an appeal before the learned CIT (A) against the order passed u/s 143(1) and the learned CIT (A)/ NFAC vide order dated 20.04.2022 dismissed the appeal filed by the assessee by observing as under: “5.1 I have considered the facts and circumstances of the case, submissions of the appellant and material available!: on record. In the presen5.1 case the assessee has filed its return of income on 18.10.2018. AO disallowed the deduction u/s 80P. Appellant filed rectification application. AO again disallowed the deduction stating that the appellant has not correctly filled- schedule VIA for claiming the deduction u/s 80P. The other reason for non allowance of deduction is, the same is not allowable for status 'other than co- operative society. The appellant has filed grounds of appeal
regarding the due date of filing of return. During the course of appeal proceedings, the appellant has admitted that inadvertently did not mention that it was liable to audit. It failed to submit the date of furnishing of audit report in the return of income. However, the appellant has not submitted any proof in respect of filing of audit report. The reasons for disallowing the deduction are as mentioned in the rectification order dated 28 06.2019 The appellant has admitted that is had made mistake while filling9 the return of income. Hence the action of the AO cannot be treated as wrong. In absence of any proof regarding the audit report the appeal of the appellant is liable to be dismissed.
6. In result, the appeal is dismissed”.
3.1 Similarly, the assessee filed appeal against the rejection of the rectification order passed u/s 154 of the I.T. Act, 1961 and the learned CIT(A)/NFAC dismissed the appeal by observing as under: “6.1 I have considered the facts and circumstances of the case, the observations of the AO and material available on record on the above Page 2 of 7 matter. As mentioned supra, this office has issued several letters to file written submission. However, neither any adjournment was sought for nor any written submissions were filed. The letters were issued through ITBA System at the e-mail ID provided in ITBA System. From the above conduct of the assessee, it is evident that assessee is no more interested in pursuing the appeal. The Hon'ble Supreme Court in the case of CIT Vs B.N. Bhattacharjee and others [1979] 10 CTR 354 (SC) observed that preferring an appeal, means effectively pursuing it The Hon'ble M.P. High Court in the case of Estate of Late Tukojirao Holkar Vs CWT [19791 223 ITR 480 (M.P.) dismissed the reference filed at the instance of the assessee for default and for not taking necessary steps. Considering the conduct of the assessee in the present Circumstance, I am of the view that the assessee is not interested in pursuing the appeal. This view has been affirmed by Hon'ble ITAT Ahmedabad in case of Amitkumar H. Shah Vs. ACIT in vide their order dated 31.12.2013, wherein following the order of ITAT Delhi Bench in the case of CIT Vs Multiplan India Pvt. Ltd., [1991] 38 ITD 320 (Del), 1TAT has dismissed the appeal filed by the assessee for want of persuasion. Under these circumstances, the current appeal of the appellant is liable to be dismissed”.
4. Aggrieved with such orders of the CIT (A)/ NFAC the assessee is in appeal before the Tribunal by raising the following grounds of appeals: “1. The Orders of the Ld CIT(A) and CPC, Bengaluru are erroneous on facts as well as on provisions of Law.
2. The CPC erred in not allowing deduction under section 80P of IT Act as eligible to the appellant being a co-operative society while 2 processing the return of income and determined the income of Rs 4,19,204/- and raised a demand for tax of Rs.1,54,0501- both under section 143(1) and 154 of IT Act.
3. The CPC ought to have observed that the time limit for submission of return of income is on or before 31.10.2018 as per the provisions of explanation 2 section 139 of IT Act and not 31.08 2018 observed by CPC and as appellant having filed the return of income on 3 08.10.2018 is eligible for deduction under section 80P of IT Act as the appellant has to get its accounts audited section 27 of under the provisions of Telangana Mutually Aided 1995 and Co-operative Societies Act, filed along the with relevant the details of audit are filled in the rectified TR| petition for rectification.
4. The Ld. CIT(A) though issued number of notices through ITBA system the Appellant could not respond the same as the Authorized Representative who filed the appeal was replaced by the Appellant and the new Authorized Representative could not respond to the notices for the reasons not known to the Appellant . 5. Any other ground that may be urged at the time of hearing of appeal.”
“1. The Orders of the Ld. CIT{A) and CPC, Bengaluru are erroneous on facts as well as on provisions of Law.
2. The CPC erred in not allowing deduction under section 80P of IT Act as eligible to the appellant being a co-operative society while processing the return of income and determined the income of Rs 4,19,204/- and raised a demand for tax of Rs.1,54,050/- under section 143(1) of IT Act.
The CPC ought to have observed that the time limit for submission of return of income is on or before 31.10.2018 as per the provisions of explanation 2 section 139 of IT Act and not 31.08.2018 as observed by CPC and appellant having filed the return of income on 3 08.10.2018 is eligible for deduction under section 80P of IT Act as the appellant has to get its accounts audited under the provisions of section 27 of Telangana Mutually Aided Co-operative Societies Act, 1995.
The Ld. CIT(A) ought to have called for the audit report along with the financial statements of the appellant during the appeal proceedings instead of rejecting the claim of appellant for deduction under section 80P of IT Act in the absence of any proof regarding audit report.
5. The Ld. CIT(A) is not right in his observation that the appellant has not correctly filled Schedule VI-A in ITR-5 for claim of deduction under section 80P of IT Act.
Any other ground that may be urged at the time of hearing of appeal”.
There is a delay of 156 days in filing of the appeal in for which the assessee has filed condonation application alongwith affidavit explaining the reasons for such delay. After considering the contents of the condonation application and after hearing the learned DR, the delay in filing of the appeal is condoned.
6. The learned Counsel for the assessee at the outset submitted that CIT (A)-NFAC for non-prosecution and the learned CIT (A)- Page 4 of 7 NFAC has not decided the appeal on merit. So far as is concerned, he submitted that although the same is decided against the assessee, however, the learned CIT (A)-NFAC has not considered the various submissions filed along with the judicial precedents on this issue. He submitted that for this year the date was extended to 31.10.2018 which has not been considered by the learned CIT (A)/NFAC. Therefore, in the interest of justice, these matters may be restored to the file of the CIT (A)-NFAC for fresh adjudication.
The learned DR, on the other hand, heavily relied on the order of the CIT (A)-NFAC and submitted that when the statute requires the assessee to file the return along with the audit report for claiming the deduction u/s 80P of the I.T. Act and the assessee has admitted that it had filed the returns belatedly, the learned CIT (A)-NFAC was fully justified in upholding the order of the Assessing Officer in denying the deduction u/s 80P of the I.T. Act. The learned DR accordingly submitted that the grounds raised by the assessee should be dismissed.