THE GANDHINAGAR DISTRICT CO-OPERATIVE CREDIT SOCIETY LIMITED,GANDHINAGAR vs. THE ITO, WARD-1 (PREVIOUSLY WARD-4), GANDHINAGAR

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

The ld. A.R. submitted the assessee is a registered co- operative credit society limited engaged in giving loans to its members out of contribution received from them and majority of the members are farmers. Members of the committee do not have much knowledge about filing of the ITR and were not properly advised by the auditors. Therefore, the ld. A.R. submitted that no return of income was filed for assessment year 2017-18. The ld. A.R. submitted that audit report of financial year 2016-17 relevant to assessment year 2017-18 was done on 28-12-2017. Later on, the due date to file ITR, the reasons stated was the bank account of the assessee maintained with the Gujarat District Co-operative Bank Ltd. was freezed by the Income Tax Department and through oversight appeal was not filed by the chartered accountant. The ld. A.R. submitted that during the assessment proceedings, the assessee furnished statement of computation of chargeable income, income and expenditure account, balance sheet, registration certificate etc. vide submission filed dated 26-09-2019 which is reflected in para 3 of the assessment order. The ld. A.R. submitted that section 80A(5) is directory and therefore the interpretation of mandatory requirement does not arise in case of assessee to file the return of income when the assessee is not having income at tall. The ld. A.R. relied upon the following decisions:-

The ld. D.R. submitted that since the assessee has not filed any return of income, the assessee cannot claim deduction u/s. 80P as the assessee is required to comply with the filing of return of income to claim the specific deduction which is not done in present case. The ld. D.R. relied upon the assessment order and the order of the ld. CIT(A).

We have heard both the parties and perused all relevant materials on record. At the time of hearing, the assessee has relied upon the decision of Bangalore Tribunal in case of M/s. Parthamika Krishi Pattina Sahakara Sangha Ltd. vs. ITO order dated 13-06-2022 wherein it is pointed out that not filing of income tax return without unintentional delay or not filing of return may be condoned. The provisions of section 80A(5) of the Act will come into play when only the return of income is filed by a assessee and the claim for deduction under chapter VIA of the Act is not claimed in the said return. Since the assessee did not file return of income for assessment year 2017-18, there was no question of invocating the provisions of section 80A(5) of the Act. The Tribunal has categorically mentioned in para 8 that neither the Assessing Officer nor the CIT(A) examined the conditions for allowing deduction u/s. 80P of the Act while passing the order simply thereby invoking section 80AC is not justifiable. In the present case also, the revenue authorities have not examined the claim of the assessee for deduction u/s. 80P of the Act and therefore it will be appropriate to remand this issue regarding eligibility to claim deduction u/s. 80P of the Act in the sense with regard to the quantum of deduction and also with regard to the other conditions for allowing deduction u/s. 80P of the Act and the Assessing Officer after verifying the same adjudicate as per Income Tax Act. Thus, the appeal of the assessee is partly allowed for statistical purposes.

In the result, the appeal of the assessee is partly allowed for statistical purposes.