THE TARKWARI CO-OPERATIVE AGRICULTURE SERVICE SOCIETY LTD.,,HAMIRPUR vs. INCOME TAX OFFICER, HAMIRPUR
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
᮰ी िवᮓम ᳲसह यादव, लेखा सद᭭य
BEFORE: SHRI. VIKRAM SINGH YADAV, AM
आयकर अपील सं./ ITA No. 952/Chd/2024
िनधाᭅरण वषᭅ / Assessment Year : 2018-19
The Tarkwari Co-Operative
Agriculture Service Society Ltd.
Vill: Tarkwari, P.O. Tarkwari,
Tehsil: Bhoranj, Dist: Hamirpur,
Himachal Pradesh-177001
बनाम
The ITO
Ward, Hamirpur
˕ायी लेखा सं./PAN NO: AABAT1500E
अपीलाथᱮ/Appellant
ᮧ᭜यथᱮ/Respondent
िनधाᭅᳯरती कᳱ ओर से/Assessee by :
Shri Ajay Patyal, Advocate
राज᭭व कᳱ ओर से/ Revenue by :
Dr. Ranjeet Kaur, Sr. DR
सुनवाई कᳱ तारीख/Date of Hearing :
07/01/2025
उदघोषणा कᳱ 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. 4. 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 3
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 juri iction 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
(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
Benches in case of Food Corporation of India Employees Co-operative Society
Vs. A.O/ CPC (ITA No. 422/Nag/2022).
11. Per contra, the Ld. DR has relied on the findings of the Ld.CIT(A) wherein the latter has placed reliance on the decision of Coordinate Ahmedabad
Benches in case of Parabada Co-operative vs ITO (ITA no. 128/Ahd/2023) and has held that the deduction under section 80P is not allowable as the return was not filed within the specified time under section 139(1) of the Act.
12. Have heard the rival contentions and pursued the material available on record. It is not in question that Section 80AC of the I.T. Act, as amended by Finance Act, 2018, stipulated that for claiming deduction u/s 80P of the Act, the return of income was required to be filed before the due date, as prescribed by section 139(1) and in the present case, the return was filed belatedly. However, it was only by the amendment to section 143(1)(a)(v) brought in by Finance Act,
2021, that the CPC can be said have been vested, exercising powers u/s 143(1)(a), to make disallowance on the ground of belated return. Prior to that, as per the un-amended provisions, the AO could disallow a claim u/s 143(1) (a) only on the grounds of arithmetical error or that the Assessee had made an incorrect claim, etc which is again not a case as so defined in the explanation which doesn’t include denial of deduction due to delayed filing of return of income. Reference, in this regard, may be had to ‘Fatehraj Singhvi & Ors. v. UOI and Ors’; 289 ITR 602 (Kar.). It goes without saying that in the absence of enabling powers, no disallowance can be made. As such, enabling provisions being absent, the CPC did not have the juri iction to make the disallowance in question, in the order u/s 143 (1) of the Act for impugned assessment year 2018-
19. This is a consistent stand taken by the Chandigarh Benches and therefore, to maintain the rule of consistency and in absence of said orders being disturbed/reversed by the higher authorities, I find merit in the grievance raised by the assessee and the same is accepted. The order under appeal is 5
accordingly reversed. Consequently, the disallowance of Rs. 3,56,370/- is cancelled.
13. In the result, the appeal is allowed.
(Order pronounced in the open Court on 13/01/2025 ) िवᮓम ᳲसह यादव
(VIKRAM SINGH YADAV)
लेखा सद᭭य / ACCOUNTANT MEMBER
AG
Date: 13/01/2025
आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to :
अपीलाथᱮ/ The Appellant 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 5. गाडᭅ फाईल/ Guard File
आदेशानुसार/ By order,
सहायक पंजीकार/