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Facts
The assessee, a co-operative society, filed its return of income belatedly due to delays in audit. The CPC denied its claim for deduction under Section 80P on this ground. The assessee's rectification application and subsequent appeal to the CIT(A) were also rejected.
Held
The Tribunal held that the amendment to Section 143(1)(a)(v) of the Act, which allowed the CPC to make disallowances for belated returns, was effective from AY 2021-22. Therefore, for AY 2018-19, the CPC lacked the jurisdiction to disallow the deduction on the ground of a belated return.
Key Issues
Whether the CPC had the jurisdiction to disallow a deduction under Section 80P for a belated return filed for Assessment Year 2018-19, prior to the amendment of Section 143(1)(a)(v)?
Sections Cited
80P, 143(1), 154, 119(2)(b), 80AC, 139(1), 139(4)
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आयकर अपीलीय अिधकरण,च"डीगढ़ "यायपीठ “एस.एम.सी” , च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCHES, “SMC” CHANDIGARH HEARING THROUGH: PHYSICAL MODE "ी िव"म "सह यादव, लेखा सद"य BEFORE: SHRI. VIKRAM SINGH YADAV, AM आयकर अपील सं./ िनधा"रण वष" / Assessment Year : 2018-19 The Tarkwari Co-Operative The ITO बनाम Agriculture Service Society Ltd. Ward, Hamirpur Vill: Tarkwari, P.O. Tarkwari, Tehsil: Bhoranj, Dist: Hamirpur, Himachal Pradesh-177001 "ायी लेखा सं./PAN NO: AABAT1500E अपीलाथ"/Appellant ""यथ"/Respondent िनधा"रती क" ओर से/Assessee by : Shri Ajay Patyal, Advocate राज"व क" ओर से/ Revenue by : Dr. Ranjeet Kaur, Sr. DR सुनवाई क" तारीख/Date of Hearing : 07/01/2025 उदघोषणा क" तारीख/Date of Pronouncement : 13/01/2025 आदेश/Order
PER VIKRAM SINGH YADAV, AM
This is an appeal filed by the Assessee against the order of the Ld. CIT(A) / NFAC, Delhi dt. 11/07/2024 pertaining to Assessment Year 2018-19 wherein the assessee through its various grounds of appeal
has effectively challenged the sustenance of disallowance of deduction amounting to Rs. 3,56,370/- claimed under section 80P of the Act.
2. Briefly the facts of the case are that the assessee is a primary Agriculture Co-operative service society registered under Societies Act. It filed its return of income on 31/03/2019 which was processed under section 143(1) by CPC Bangaluru and vide its intimation dt. 25/06/2019, the claim of deduction under section 80P has been denied.
Being aggrieved, the assessee filed the rectification application under section 154 dt. 06/05/2020 and the said rectification application was also rejected by the JAO vide order passed under section 154 r.w.s. 143(1) dt. 20/10/2020.
The assessee carried the matter in appeal before the Ld. CIT(A) who has sustained the said action of the CPC/JAO. 5. Against the said findings, the assessee is in appeal before us. 6. During the course of hearing, the Ld. AR submitted that the assessee is a cooperative society registered under the Society Act, 1860 and its accounts are subjected to audit by the Government Auditor and the said audit was only completed on 29/12/2018 and which has basically resulted in delay in filing of the return of income which was filed on 31/03/2019. It was submitted that the delay in filing the return of income was beyond the control of the assessee and the assessee cannot be penalized for the delay in filing the return whereby its lawful claim of deduction under section 80P for which assessee is otherwise eligible be denied. It was submitted that even the CBDT Circular vide its Circular No. 13/2023 dt. 26/07/2023 has realized the hardship which is caused to the Cooperative Societies whereby the claim of deduction under section 80P has been denied on account of delay in getting accounts audited under respective state laws and to mitigate genuine hardship, the powers have been granted to the Chief Commissioner of Income Tax and Director General of Income Tax to consider the condonation application under section 119 (2)(b) of the Act and it was accordingly submitted that the delay in filing the return of income be condoned and the AO be directed to allow the claim of deduction under section 80P of the Act. 7. It was further submitted that the CPC, Bagaluru has not provided the reasonable opportunity to the assessee in terms of proposed disallowance in compliance with first proviso to Section 143(1)(a) of the Act and has straight away made the adjustment by way of denial of claim of deduction under section 80P of the Act. 8. It was further submitted that no doubt, Section 80AC as amended by the Finance Act, 2018 mandated that even for claiming deduction claimed under section 80P of the Act, the return of income has to be fled before due date as specified under section 139(1) and 139(4) however it is a matter of fact that Sub- Clause (v) of Section 143(1)(a) was amended by the Finance Act 2021 and therefore, the enabling provision to address the amendment in Section 80AC came into place only w.e.f A.Y. 2021-22 and therefore, the CPC Bangaluru doesn’t have the necessary jurisdiction to make the disallowance while processing the return of income and issuance of intimation under section 143(1) of the Act. 9. It was submitted that there are series of decisions where Coordinate Chandigarh Benches have consistently held that in absence of the enabling provisions, the CPC, Bangaluru cannot make the subject adjustment while processing the return of income. In this regard, our reference was drawn to the decision of Coordinate Chandigarh Bench in case of The Lanjani Co-op. Agriculture Service Society Ltd. & Ors Vs. DCIT(CPC) Bangaluru (ITA No. 332/Chd/2021), Balol Co-op Agriculture Service Society Ltd. Vs. The CIT(CPC) Bangaluru (ITA No. 79/Chd/2022), Karohta Co-op Agriculture Service Society Ltd. Vs. ITO, Ward Hamirpur (ITA No. 447/Chd/2022), Mundkhar Co-op. Agriculture Service Society Ltd. Vs. The ITO, Ward Hamirpur (ITA No. 513/Chd/2022) and 10. It was further submitted that similar view has been taken by various other Benches of the Tribunal such as Indore Benches in case of Nagar Palika Nigam Karmchari Kalyan Sakh Sahakari Sanstha Maryadit, Ujjain Vs. CPC, Bangaluru (ITA No. 198/Ind/2024), Mumbai Benches decision in case of The Premier Co- operative Credit Vs. CIT(A) NFAC Delhi (ITA No. 2605/Mum/2024), Nagpur