VIDYUT TRANSMISSION KARMACHARI VETAN BHOGI CREDIT COOPERATIVE SOCIETY,LUCKNOW vs. CPC BANGALORE/ITO-2(1), LUCKNOW

5. That in any view of the matter the appellant reserves her right to take any fresh ground before hearing of the appeal.

It is therefore respectfully prayed that a suitable order may kindly be passed and relief be allowed accordingly.”

4. In the course of appellate proceedings in Income Tax Appellate Tribunal (‘ITAT’, for short) a paper book containing the following particulars was filed from the assessee’s side:

S.No. Particulars 1. Written submission 2. Copy of communication of proposed adjustment 3. Copy of acknowledgement for filing of ITR 4. Copy of Memorandum explaining the Provisions of Finance Bill. 5. Copy of order reported in 169 taxmann.com 300 in Hon'ble ITAT, Bench A, Lucknow in the case of Sahkari Ganna Vikas Samiti Ltd. vs. ACIT 4.1. Further, written submissions were also filed from the assessee’s side which are reproduced below, for the ease of reference:

“1- ON THE ISSUE OF GROUND OF APPEAL

NO. 1 ΤΟ

3. It is prayed that Ld CPC vide order u/s. 143(1)/154 dated 28.01.2021 disallowed the deduction u/s 80P(2)(a) by making adjustment u/s 143(1)(a)(ii)- Incorrect Claim for reasons being return was not filed within due date. Copy of communication of proposed adjustment is at page 9 of the paper book. That the disallowance has been made merely because the return was filed beyond the due date specified u/s 139(1) accordingly filed u/s 139(4). Copy of acknowledgement for filing of ITR is at page 10 of the Paper book.

It is prayed that the provisions of section 143(1)(a)(ii) state as under :- "An incorrect claim if such incorrect claim is apparent from any information in the return"

It is further prayed that in the Explanation to section 143(1), the Act has layed out the situations which shall be considered to be 'An incorrect claim if such incorrect claim is apparent from any information in the return'. These situation are: Explanation For the purposes of this sub-section,- (a) "an incorrect claim apparent from any information in the return" shall mean a claim, on the basis of an entry, in the return,- (i) of an item, which is inconsistent with another entry of the same or some other item in such return;” (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction; Admittedly, none of the 3 (three) situations envisaged above are applicable to the case of the appellant for the instant year. Clause (i) of the explanation will not apply as there is no item of entry which is inconsistent with another entry item. The deduction claimed u/s 80P was duly claimed in the return of income and was properly filled in the Schedule VI-A - Deduction under chapter VI- A under Part C, Sl. No. 2m of ITR 5. Clause (ii) of the explanation will also not apply as there is no such item in the return to substantiate the entry which has not been furnished. The deduction claimed u/s 80P has been duly furnished and was properly filled in the Schedule VI-A - Deduction under chapter VI-A under Part C, Sl. No. 2m of ITR 5. Clause (iii) has no relevance as the deduction claimed u/s 80P(2)(a) is not computed on the basis of any monetary limit or percentage or ratio or fraction and thus this clause will also not apply.

It is prayed that the adjustment was made u/s 143(1)(a)(ii) only on account of Amendment carried out in section 80AC by Finance Act 2018 w.e.f from AY 2018-19. That as a result of this amendment from 2018-19 assessment year, the deductions falling in the heading "C" of chapter VIA of the Income-tax Act, 1961 can be said to be brought in the ambit of this section. However, at the relevant point of time, no such powers were vested with the CPC Bangalore to make adjustment on account of default made in section 80AC. The enabling provision to make such adjustment u/s. 143(1) was brought on the Statute only by the Finance Act, 2021 w.e.f AY 2021-22.

Referring to the provisions as they stood in 2018-19 and 2019-20 assessment year, it is submitted that as per law, the claim u/s. 143(1)(a) could be disallowed by the AO (herein CPC Bangalore) only on the grounds of arithmetical error or that the assessee had made an incorrect claim etc. but not on the grounds that the return was filed beyond the due date. The provisions of clause (v) of section 143(1)(a) as it stood in AY 2019-20 is reproduced hereunder: "disallowance of deduction claimed u/s 10AA, 801A, 801AB, 801в, 80IC, 80ID or section 80IE, if the return of income is furnished beyond the due date specified under sub-section(1) of section 139". On a bare perusal of clause (v) it can be seen that section 80P is not mentioned at that time. The said clause (v) of section 143(1)(a) is a specific clause for making adjustment by way of "disallowance of deduction", if the return of income is furnished beyond the due date specified u/s 139(1) of the Act. The said clause (v) specifies that disallowance of deduction claimed u/s 10AA, 801A, 80IAB, 801B, 80IC, 80ID or section 801E shall be made if the return of income is furnished beyond the due date specified u/s 139(1) of the Act. However, there is no mention of section 80P. Meaning thereby that the deduction u/s 80P cannot be disallowed if the return of income is furnished beyond the due date specified u/s 139(1) of the Act. Accordingly, when there is a specific clause in section 143(1)(a) which speaks about 'disallowance of deduction' when return is not filed within time limit provided in section 139(1) and when such clause does not mention section 80P then no adjustment can be made u/s 143(1)(a) of the Act for disallowance of deduction u/s 80P by invoking clause (ii) of section 143(1)(a) in AY 2019-20. The enabling provision to disallow deduction u/s 80P if the ITR is not filed within due date was brought by way amendment made by Finance Act 2021 w.e.f. 01.04.2021 wherein clause (v) of section 143(1)(a) was amended by substituting following words "Section 10AA or under any of the provisions of Chapter VI-A under the heading "C.. Deduction in respect of certain incomes in place of "sections 10AA, 801A, 801AB, 801B, 80IC, 80ID or section 80IE". Clause 34 of memorandum to Finance Bill 2021 makes it amply clear that the aforesaid amendment will take effect from 01-04-2021 and will accordingly apply for Assessment year 2021- 22 and subsequent years. Copy of Memorandum to Finance Bill 2021 w. r. t. Clause 34 is at page 11-12 of the Paper book. Thus only after the amendment made by Finance Act 2021 w.e.f. 01.04.2021 in clause (v) of section 143(1)(a), adjustment to return of income was made permissible i.r.o. deduction claimed u/s 80P (Chapter VI-A under the heading "C.- Deduction in respect of certain incomes) if the return of income was filed beyond due date specified u/s 139(1) of the Act and no such adjustment was permissible under section 143(1)(a) prior to Finance Act 2021 and in view of the above, no adjustment can be made by Ld. AO CPC by disallowing the deduction u/s 80P under clause (ii) of Section 143(1)(a). This issue is squarely covered by the decision of Hon'ble ITAT, Bench 'A', Lucknow in the case of Sahkari Ganna Vikas Samiti Ltd in vide order dated 26.11.2024 where the Hon'ble Bench held as under: "The Ld. AR for the Assessee also drew our attention to the written submissions filed by the assessee (referred to foregoing paragraph no. 1 of this order) relevant portion of which is reproduced as under: - "1 It is prayed that Ld. CPC vide order u/s 143(1) dated 16.07.2020 disallowed the deduction u/s 80P(2)(a) by making adjustment u/s 143(1)(a)(ii)- Incorrect claim for reasons being return was not filed within due date. That the disallowance has been made merely because the return was filed beyond the due date specified u/s 139(1). The due date of filing ITR was 31.10.2019 but the ITR was filed on 01.11.2019 after the delay of merely 25 minutes and was uploaded at 009:25:43 hrs on 01.11.2019. Copy of acknowledgement for filing of ITR is at page of the paper book." 4.1 The Ld. Sr. DR for Revenue relied on the order of the Ld. CIT(A).

(ii)…. (iii) ….. (iv) ……

(v) disallowance of deduction claimed under [section 10AA or under any of the provisions of Chapter VI-A under the heading "C-Deduction in respect of certain incomes", if the return is furnished beyond the due date specified under sub- section (1) of section 139; or (vi) …….

5.1 The assessee's claim for deduction under section 80P of the Act falls under provisions of Chapter VIA of the Act. It is a fact that the amendment to Section 143(1)(a)(v) of the Act, enabling disallowance of deduction claimed Chapter VIA of the Act, was made by the Finance Act, 2021, w.e.f. 01.04.2021. The present case before us pertains to assessment year 2019-20 (previous year 2018-19). It can be readily inferred, therefore, that an assessee will not be hit by provisions of Section 80AC of the Act, having regard to the assessee claim for deductions under Chapter VIA of 1. T. Act, while processing the return and making adjustments under section 143(1) of the Act. It follows accordingly that in the present case before us, the assessee's claim for deduction under section 80P of the Act (which falls under Chapter VI-A of the Act) is not hit by Section 80AC of the Act while processing the return and making adjustments under section 143(1) of the Act. In coming to this conclusion, we take strength from the following precedents: - i. Sahakari Ganna Vikas Samiti v. ITO (supra). ii. [2023] 149 taxmann.com 28/200 ITD 14 (Rajkot Trib) in the ITAT Rajkot Bench, Lunidhar Seva Sahkari Mandali Ltd v. Assessing Officer (CPC) iiil. [2023] 146 taxmann.com 468 (Chandigarh Trib.) (SMC) in Lanjani Co-operative Agri Service Society Ltd (CPC) v Deputy Commissioner of Income Tax, CPC iv. Order dated 22/05/2023 of Income Tax Appellate Tribunal 'A' (SMC) Bench, Kolkata in Assessment Year: 2019-20 (Kishorepur Paschimanlal skus Limited v ITO.

Copy of the case law is at page 13-19 of the paper book.

Following case laws are also squarely applied in the present case:

1- [2023] 149 taxmann.com Section 80P, read with section 139, of 28 (Rajkot Trib.) IN THE the Income-tax Act, 1961 - ITAT RAJKOT BENCH Deductions - Income of co-operative Lunidhar Seva Sahkari societies (Claim raised in belated Mandali Ltd. v. Assessing return) - Assessment year 2019-20 - Officer (CPC) Assessee, a co-operative society claimed deduction under section 80P - Assessing Officer denied said deduction holding that return of income was not filed within due date prescribed under section 139(1) However, assessee had filed its return of income belatedly on 30-11-2020-It was noted that denial of claim under section 80P would not come within purview of prima facie adjustment under section 143(1)(a)(v) for reason that said section was not in force during period under consideration i.e. assessment year 2019-20 Further case of assessee would also not fall within purview of prima facie adjustment under section 143(1)(a)(ii) - Whether since return of income was filed within due date permissible under section 139(4), in which claim for deduction under section 80P was made, therefore, deduction under section 80P could not be denied to assessee only on basis that assessee did not file its return of income within due date prescribed under section 139(1) - Held, yes [Para 7.4] [In favour of assessee] 2. [2023] 146 Section 80P. Act, 1961 read with taxmann.com46 8 sections 80AC and 143(1), of the (Chandigarh- Trib.) IN Income-tax operative societies (Sub THE ITAT CHANDIGARH clause (v) of section 143(1)) BENCH 'SMC' in the appeal Assessment years 2018-19 and 2019- of Lanjani Co-Operative 20-Assessee, a primary agricultural Agri Service Society co-operative society, filed its return (CPC)v.Deputy Ltd. claiming Deductions Income of co- Commissioner of Income- deduction under section 80P tax, CPC Assessing Officer disallowed deduction on grounds of return being filed belatedly only after intimation under section 143(1) Whether enabling provisions of sub-clause (v) of section 143(1)(a) providing for disallowance of deduction under section BOP due to late filing of return was introduced by Finance Act, 2021 effective from 1- 4-2021 and it was not on statute for relevant assessment years 2018-19 and 2019-20, therefore, Assessing officer lacked jurisdiction to make disallowance under section 80P in order under section 143(1) during relevant years - Held, yes [Paras 14.2 and 14.6] [In favour of assessee] 3. IN THE INCOME Consistent with the view taken by the APPELLATE TRIBUNAL Tribunal "A under identical (SMC)" BENCH, KOLKATA circumstances, we have no hesitation 1.Τ.Α. Νο. in holding that the assessee cannot 716/Kol/Assessment Year: 2022 be denied the deduction u/s. 2020 80P of the Act on 2019- the ground that the return of income was not filed within the due date prescribed u/s. 139(1) of the Act under proceedings made u/s. 143(1) of the Act for the Assessment Year 2019-20. Thus the intimation u/s 143(1) dated 28/09/2020 is invalid in law and thereby quashed.

of the Act while drawing intimation under Section 143(1) of the Act. We, thus, find merit in the plea of the assessee seeking rectification of the apparent error. Consequently, we set aside the order of the CIT(A) and direct the designated authority/CPC, Bengaluru to restore the deduction claimed under Section BOP of the Act made by the assessee. 9. In the result, appeal of the assessee is allowed.

It is further prayed that the Ld. CIT(A) relied upon the decision of Hon'ble Madras High Court in WP No. 7038 of 2020 dated 7-4- 2021 in the case of AA520 Veerappampalayam Primary Agricultural Co-operative Credit Society Ltd. v. Dy. CIT [2022] 138 taxmann.com 571. It is prayed that the said decision will not apply as the said decision is dated 07-4-21 and the amendment was brought from 01-4-21 by FA Act 2021 and this amendment in section 143(1) was neither argued nor referred to for the consideration of the Madras High Court and thus the said judgement is distinguishable as held by ITAT Chandigarh Bench in the case of Lanjani Co- Operative Agri Service Society Ltd. Vs Deputy Commissioner of Income-tax, CPC reported in 2023] 146 taxmann.com 468 (Chandigarh - Trib.).

5. At the time of hearing, learned Authorized Representative (AR) for the assessee drew our attention to order passed by us in the case of ‘Sahkari Ganna Vikas Samiti Ltd. Vs. ACIT’ [2024] 169 txmann.com 300 (Lucknow-Trib). He submitted that the facts and circumstances of the present case are similar to facts and circumstances in the aforesaid case of ‘Sahkari Ganna Samiti Ltd. Vs. ACIT’ (Supra).

5.1. Learned Departmental Representative (DR) for Revenue submitted that the facts are distinguishable. He submitted that the aforesaid case of the ‘Sahkari Ganna Samiti Ltd. vs. ACIT’ (Supra) pertained to a sugarcane cooperative; whereas the present case pertained to cooperative credit society of employees of Uttar Pradesh Power Corporation Ltd. The nature of business and activities of two cases being entirely different, the matters should be remanded back to the Assessing Officer (‘AO', for short) for verifying whether the facts and circumstances of the two cases are akin, he submitted.

6. We have heard both sides. We have also perused the materials on record. We are persuaded by the submissions of learned DR. The nature of business and activities of the assessee is that of a cooperative credit society; whereas the nature of activities of aforesaid case of ‘Sahkari Ganna Samiti Ltd. vs. ACIT’ (Supra) is that of a sugarcane cooperative; and it cannot be inferred readly that the ratio of aforesaid precedent ‘Sahkari Ganna Samiti Ltd. vs. ACIT’ (Supra) would also be applicable to the present case. This aspect requires factual verification at the end of the AO. Therefore, the impugned order of the learned CIT(A) is set aside and the issue in dispute regarding assessee’s claim for deduction u/s. 80P of the Act is remanded to the AO to pass order in accordance with law on this issue, after giving reasonable opportunity to the assessee and giving due consideration to decided precedents brought to his knowledge and attention. All grounds of appeal are treated as disposed of in accordance with aforesaid directions and order.

(Order pronounced in the open court on 19.12.2025)