KATRATHAL GRAM SEWA SAHKARI SAMITI LIMITED ,KATRATHAL vs. ITO WARD 1 SIKAR, SIKAR

3. Succinctly, the fact as culled out from the records are that in the case of the assessee, specific information was received on insight portal under the category “Non-fillerreturn PAN cases”. The assessee had not filed its return of income for the assessment year 2019-20. Thus, the case of the assessee was reopened by issuance of notice u/s 148 of the Act dated 24.03.2023 after passing order u/s 148A(d) of the Act dated 24.03.2023. In Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO case of the assessee, specific information was received on Insight Portal under the category “Non-filing of Return PAN cases.” The details of the information in possession of revenue reads asunder:- Information Information Source Count Amount Amount code description Amount Description Description Description SFT-004 Cash deposits in one Sikar 3 Aggregate 1,13,26,980/- or more account KendriyaSahakari gross (other than a current Bank Ltd. amount account and time received deposit) of a person form person in cash In response to notice u/s 148 of the Act, the assessee filed its return of income on 14.04.2023 declaring NIL income after claiming deduction of Rs. 2,47,549/- under chapter VIA. A notice u/s 143(2) of the Act was issued to the assessee on 06.10.2023. Statutory notices were issued as required as per law asking from the assessee details required for making the assessment. Ld. AO in the assessment proceeding noted that assessee claimed deduction u/s .80P(2)(a)(iv) and u/s 80P(2)(d) of the Act. The assessee's claim of deduction under chapter VIA was not allowable as per the provision of section 80AC of the Act and there by the claim was not allowed.

Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO 4. Aggrieved by the order of Assessing Officer, assessee preferred an appeal before the ld. CIT(A). Apropos of the grounds so raised, the relevant findings of the ld. CIT(A) are reiterated here in below:- “5.1 DECISION: I have carefully considered the facts of the case, assessment order. statement of facts and case-laws relied on by the appellant. It can be seen from the records that appellant is a Multi Purpose Co-operative Society which has not filed its return of income for the year under consideration on or before the specified date/due date as per the provisions of section 139(1) of the Act. Believing that the appellant had some income chargeable to tax that had escaped assessment, the case of the appellant was reopened u/s 147 of the Act and the appellant was requested to furnish the return of income for the AY 2019-20. In response the appellant filed the return of income on 14/04/2023however the same was much beyond the date for filing of return in terms of section 139(1) of the Act. Since the appellant has not filed its Return of Income for the year under consideration on or before the due date as per the provisions of section 139(1) of the Act, the AO has disallowed the deduction claimed u/s 80P as per the provision of section 80AC of the Act. 5.1. Before moving further, let me first surface provision of section 80AC of the Act which comes into force from 01/04/2018. The provision of section 80AC is as under :- [Deduction not to be allowed unless return furnished. 80AC. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after-the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction (1) is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE the 1st day of April, 2018, any deduction is admissible under any provision of (ii) this Chapter under the heading "C.-Deductions in respect of certain incomes", no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub- section (1) of section 139.] 5.2. As per provision of section 80AC of the Act, if the assessee makes his claim for deduction under section 80P in a return filed within time under sections 139(4), 142(1) or section 148 of the Act, he will not be allowed the deduction, unless the return in question was filed within the due date prescribed under section 139(1) of the Act. Thus, it is clear that the statutory scheme permits the allowance of a Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO deduction under section 80P of the IT Act only if it is made in a return recognized as such under the Act, and after 01/04/2018, only if that return is one filed within the time prescribed under section 139(1) of the Act. The amendment to Section 80AC with effect from 1-4-2018, however, mandated that for an assessee to get a deduction under section 80P of the IT Act, he had to furnish a return of his income for such assessment year on or before the due date specified in section 139(1) of the Act. The requirement of making the claim for deduction in a return of income filed by the assessee can be seen as a statutory pre-condition for claiming the benefit of deduction under the Act. It is trite that a provision for deduction or exemption under a taxing Statute has to be strictly construed against the assessee. The similar view has also supported by the Hon'ble Kerala High Court in case of NileshwarRangekalluChethuVyavasayaThozhilaliSahakarana Sangham Vs. Commissioner of Income-tax [2023] 152 taxmann.com 347 (Kerala). (IT APPEAL NOS. 120 OF 2019/11 OF 2022, MARCH 14, 2023) wherein it is held as under :- "On a reading of section 80A(5) and section 80AC as they stood prior to 1-4-2018, it is found that when the latter provision was amended by Finance Act 2018, it would reveal that the statutory scheme under the IT Act was to admit claims for deduction under section 80P as were made by the assessee of income filed by him. That return can be under section 139(1), or section 148, and to be valid, had to be filed within the due under those provisions. Under section 80A(5), the claim for only such in a return 139(4), 142(1) date contemplated deduction under section 80P could be made by an assessee in a return filed within the time prescribed for fliling such returns under any of the above provisions. The amendment to section 80AC with effect from 1-4-2018, however, mandated that for an assessee to get a deduction under section 80P, he had to furnish a return of his income for such assessment year on or before the due date specified in section 139(1). In other words, after 1-04-2018, even if the assessee makes his claim for deduction under section 80P in a return filed within time under section 139(4), 142(1) or section 148, he will not be allowed the deduction, unless the return in question was filed within the due date prescribed under section 139(1). Thus, it is allowance of a deduction under recognised as such under the Act, and filed within the time prescribed under cases, for the assessment years 2009-10 after the dates prescribed under section issued under section 142(1) and section and could not have been acted upon by the were filed before the completion of the clear that the statutory scheme permits the section 80P only if it is made in a return after 1-4- 2018, only if that return is one section 139(1). As the return in these and 2010-11, were admittedly filed 139(1) and 139(4) or in the notices 148, the returns were indeed non-est Assessing Officer even though they assessment. There is yet another aspect of the matter. The requirement of making the claim for deduction in a return of income filed by the assessee can be seen as a statutory precondition for claiming the benefit of deduction under the IT Act. It is trite that a provision for deduction or exemption under a taxing statute has to be strictly construed against the assessee and in favour of the revenue. Thus, a failure on the part of an assessee to comply with the pre-condition for obtaining the deduction cannot be condoned either by the statutory authorities or by the courts.

Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO A claim for deduction under section 80P can be entertained even if it is made in a return filed beyond the time permitted under the Act, ignores the perspective that sees the requirement of the claim for deduction being made in a valid return pre- condition for obtaining the benefit of the statutory deduction. The said also fly in the face of the express statutory provisions that requires the claim to be made in a return filed by the assessee, by which term is meant a under the Act, and therefore have necessarily to be seen as per found that the subsequent amendments to section 80AC by fortifies the view that this Court had taken for, it makes the under section 80P conditional on filing a return within the under section 139(1). In other words, the pre-condition for deduction under section 80P has now been made more stringent by the time available to an assessee for making the claim. It is also the Finance Act 2018 claim for deduction due date prescribed claiming the reducing the time available to an assessee for making the claim. A reading of the provisions of section 139(8) and (9) clearly reveals that even under those provisions, the restrictions placed with regard to the accrual of interest on amounts assessed on an assessee iswith regard to the date of filing a return within the time prescribed under the IT Act. Under section 234A, however, although the provision suggests that even a return filed beyond the time prescribed under any of the provisions of the IT Act can have the effect of limiting the accrual of interest on the amounts assessed against an assessee, it has to be seen that the said provision is permitting a filing of a belated return for limited purpose of conferring a specific benefit of limiting the accrual of on an assessee, and for no other purpose. This Court cannot accept the of the assessee that the said provisions which are intended for a and are not general in nature,have to be seen as manifesting a that enables the Department to act upon a belated return for an assessee for deduction under section 80P the interest. contention specific purpose statutory scheme allowing the claim of In the light of the aforesaid discussion, this Court finds that the above questions of law have to be answered in favour of the revenue and against the assessee. Thus, these IT Appeals are disposed by answering the substantial questions of law raised therein, in favour of the revenue and against the assessee. 5.3. In the present case, it is evident from the record that the appellant has failed to file return of income for the AY 2019-20 as per provision of section 139(1) of the Act. Therefore keeping in view of provision of section 80AC and respectively following the above judicial pronouncement. I am of the view that the appellant would not be eligible for deduction claimed u/s 80P of the Act. Accordingly, the observations and the findings of the AO appears to be in order which does not permit me to take a divergent view. Accordingly the disallowance of the deduction claimed u/s 80P of Rs 2,47,549/- is upheld and the grounds raised in this respect are dismissed

6. In the result, the appeal is Dismissed.”

Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO 5. Feeling dissatisfied with the above order of the ld. CIT(A), the assessee preferred the second appeal before this tribunal. Apropos of the grounds raised by the assessee, ld. AR of the assessee relied upon the following written submission:- “GOA-1: Invalid action u/s 147/148 and invalid assessment u/s 147 rws 144B GOA-2: Disallowance of deduction u/s 2,47,549/- u/s 80P Under chapter VI-A: FACTS:1.The brief facts of the case that the society is a co-operative society registered under Rajasthan Cooperative society Act IV of 1953. The society deals in the trading & distribution of agriculture produce & agriculture implements in order to supply the same to its members and also provide credit facilities to its members to provide support in their agriculture production activities & to improve their financial condition. It is also a primary agriculture credit society. It works on the principle of self-help as well as mutual help. It works to serve its members and not for earning profits. Assessee has not filed its return of income for the year originally being the surplus exempt u/s 80P. However in response to the notice u/s 148 assessee has filed its ROI on dt.14.04.2023 declaring the total income of Rs. Nil by claiming the deduction u/s 80P being the Co-Operative Society. Copy of ITR with Computation of Total income is enclosed.(PB17-19) In this case the ld. AO has issued a notice u/s 148A(b) on dt.27.02.2023 on the reasons that the assessee has not filed the ITR and during the year under consideration, amount of total deposit in the bank account is Rs.3,23,39,785/- out of which an amount of Rs. 1,13,26,980/- was deposited in cash /- as reported on Insight Portal under head RMS - Non-Filing of Return - PAN Cases.

3. For the year under consideration, the assessee was Non-filer i.e. the assesseedid not file its return of income for the Assessment Year 2019-20. In the absence ofreturn of income, the transactions carried out by the assessee through the said bankaccount remained unexplained and the amount of total deposits of Rs.3,23,39,785/- has not been brought to tax. Copy of notice is enclosed(PB1-4). Thereafter in want of reply the ld. AO has passed the order u/s 148A(d) on dt. 24.03.2023 (PB5-16) wherein he has stated the same thing as stated in the notice u/s 148A(b) and also issued the notice u/s 148(PB5). In response to the notice u/s 148 assessee has filed the return on dt.14.04.2023 declaring the total income of Rs. Nil by claiming the deduction u/s 80P being the Co-Operative Society. Thereafter the ld. AO has issued the notice u/s 142(1) and in response thereto the assessee has filed the objection dt. 22.12.2023 and also filed the reply on merit (PB24-30). The ld. AO has not decided our Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO objection and he has issued a show cause notice on dt.13.02.2024(PB36A-36K) wherein he has stated that The Assessee has claimed Deduction u/s. 80P of Rs.2,47,549/- in the Return of Income furnished u/s. 148 of the Act on 14.04.2023 for the Assessment Year 2019-20. As per the provisions of Section 80AC of the Income Tax Act, 1961, as amended by Finance Act, 2018, which pertains to Deduction not to be allowed unless return furnished, no Deduction u/s. 80P shall be allowed unless Return of Income is furnished in accordance with the provisions of Section 80AC i.e. on or before the due date specified u/s. 139(1) of the Income Tax Act. In order to avail Deduction u/s. 80P, the Return of Income of the assessee was required to be furnished in accordance with the provisions of Section 80AC i.e. within the due date specified u/s. 139(1) of the Act. However,the assessee failed to do so and the same was not complied with. Hence, the Deduction u/s.80P, as claimed, cannot be allowed. In view of the above, in consequence of Disallowance of Deduction u/s.80P of Rs.2,47,549/-, such Other Incomes including Interest Income, is taxed u/s. 56 of the Act under the head “Income from Other Sources”. Accordingly, penalty proceedings u/s 270A of the Act for under reported income are being initiated separately. Copy enclosed (PB19-23). In response thereto the assessee has filed the reply on 20.02.2024(PB24-32) with the legal position and case laws, also reproduced at page 14-19 of the assessment order. However the ld. AO did not feel satisfy with the reply and held the same as held in the SCN and completed the assessment at Rs.2,47,549/- by disallowing the deduction claimed of Rs.2,47,549/- u/s 80P. In first appeal we have filed the detailed WS and Paper book as well as legal position. However the ld. AO did not consider the same in their true perspective and sense and stated that 5.3. In the present case, it is evident from the record that the appellant has failed to file return of income for the AY 2019-20 as per provision of section 139(1) of the Act. Therefore keeping in view of provision of section 80AC and respectively following the above judicial pronouncement, I am of the view that the appellant would not be eligible for deduction claimed u/s 80P of the Act. Accordingly, the observations and the findings of the AO appears to be in order which does not permit me to take a divergent view. Accordingly the disallowance of the deduction claimed u/s 80P of Rs 2,47,549/- is upheld” Hence this appeal SUBMISSIONS : 1. No addition made on the reasons recorded u/s 148A(b): At the very outset it is submitted that as the ld. AO issued the notice u/s 148/148A(b)/148A(d) on the reasons recorded that“the assessee has not filed the ITR and during the year under consideration, amount of total deposit in the bank account is Rs.3,23,39,785/- out of which an amount of Rs. 1,13,26,980/- was deposited in Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO cash as reported on Insight Portal under head RMS - Non-Filing of Return - PAN Cases.For the year under consideration, the assessee was Non-filer i.e. the assesseedid not file its return of income for the Assessment Year 2019-20. In the absence ofreturn of income, the transactions carried out by the assessee through the said bankaccount remained unexplained and the amount of total deposits of Rs.3,23,39,785/- has not been brought to tax. Copy of notice is enclosed). However on perusal of the assessment order admittedly it has been come to know that the ld. AO has not made any addition on this issue or on the issue recorded in the reason for reopening the case and he has made different addition on account of disallowance u/s 80P due to not filling the ITR u/s 139(1), which is illegal and now it is the settled legal position of law that if no addition on the reasons recorded has been made then no other addition can be made, for this kindly refer following decisions: (a) In the case of CIT vs. Shri Ram Singh306 ITR 0343(Raj.) he Hon’ble High Court Of Rajasthan Held that It is only when, in proceedings under s. 147 the AO assesses or reassesses any income chargeable to tax, which has escaped assessment for any assessment year, with respect to which he had "reason to believe" to be so, then only, in addition, he can also put to tax, the other income, chargeable to tax, which has escaped assessment, and which has come to his notice subsequently, in the course of proceedings under s.

147. To put it in other words, if in the course of proceedings under s. 147, the AO were to come to conclusion, that any income chargeable to tax, which, according to his "reason to believe", had escaped assessment for any assessment year, did not escape assessment, then, the mere fact, that the AO entertained a reason to believe, albeit even a genuine reason to believe, would not continue to vest him with the jurisdiction, to subject to tax, any other income, chargeable to tax, which the AO may find to have escaped assessment, and which may come to his notice subsequently, in the course of proceedings under s.

147. Sub-s. (2) of s. 148 mandates reasons for issuance of notice by the AO and sub-s. (1) thereof mandates service of notice to the assessee before the AO proceeds to assess, reassess or recomputed escaped income. Sec. 147 mandates recording of reasons to believe by the AO that the income chargeable to tax has escaped assessment. All these conditions are required to be fulfilled to assess or reassess the escaped income chargeable to tax. As per Expln. 3 if during the course of these proceedings the AO comes to conclusion that some items have escaped assessment, then notwithstanding that those items were not included in the reasons to believe as recorded for initiation of the proceedings and the notice, he would be competent to make assessment of those items. However, the legislature could not be presumed to have intended to give blanket powers to Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO the AO that on assuming jurisdiction under s. 147 regarding assessment or reassessment of escaped income, he would keep on making roving inquiry and thereby including different items of income not connected or related with the reasons to believe, on the basis of which he assumed jurisdiction. For every new issue coming before AO during the course of proceedings of assessment or reassessment of escaped income, and which he intends to take into account, he would be required to issue a fresh notice under s. 148.— CIT vs. Jet Airways (I) Ltd. (2011) 239 CTR (Bom) 183 : (2011) 52 DTR (Bom) 71 : (2011) 331 ITR 236 (Bom) concurred with. The very basis of initiation of proceedings for which reasons to believe were recorded were income escaping assessment in respect of items of club fees, gifts and presents, etc., but the same having not been done, the AO proceeded to reduce the claim of deduction under ss. 80HH and 80-I which as per above discussion was not permissible. Had the AO proceeded to make disallowance in respect of the items of club fees, gifts and presents, etc., then in view of the discussion as above, he would have been justified as per Expln. 3 to reduce the claim of deduction under ss. 80HH and 80-I as well. In view of the above discussions, the Tribunal was right in holding that the AO had the jurisdiction to reassess issues other than the issues in respect of which proceedings are initiated but he was not so justified when the reasons for the initiation of those proceedings ceased to survive. (d) In the case of CIT vs. Dr. DevendraGupta336 ITR 0059(Raj): held Reassessment—Scope—Addition in respect of items other than the one on which notice in given—Income alleged to have escaped assessment in reasons recorded not having been actually foundto . (e) Also refer AVG Construction Pvt. Ltd v/s ITO Ward 6(2) Jaipur in dt. 02.09.2021 under the same facts and circumstances copy is enclosed. (f) Recently the Honble ITAT Jaipur Bench in the case of ShriShambhuDayalSaraf v/s IT in dt02.07.2018 58 TW 355(Jp), has also held the same view copy of order is enclosed (g) Also refer latest decision of this Honble ITAT in the case of PappuQureshi v/s ITO in ITA No. 314//Jp/2019 dt. 28.04.2020 Sec. 292B is no applicable: S. 292B could not be invoked to correct a foundational/substantial error as it was meant so as to meet jurisdictional requirement—Therefore, both impugned notice and impugned order were quashed and set aside—It was made clear that this order would not prohibit Revenue from issuing a fresh notice for reassessment, if requirement of Ss 147/148 were satisfied, including limitation period therein Kindly refer SumitBalkrishan Gupta v/s ACIT 104 CCH379(Bom.HC)(2019). Thus, cannot be said that it is an irregularity curable u/s. 292B— (h)In the case of SarafGramodyogSansthan vs. ITO108 ITD 115(Agra)it has been held that Further, AO had referred to wrong bank account number in the reasons recorded by him—Sec. 292B cannot take care of any mistake in recording the reasons because that section refers to "return of income, Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO assessment, notice, summons or other proceedings"—It does not refer to the reasons recorded by the AO—Any invalid proceedings for assumption of jurisdiction cannot be corrected by s. 292B (i) In the case of Vikram Singh vs. Income Tax Officer (2021) 63 CCH 0044 LucknowTribReassessment—Escapement of income—Case of assessee was reopened u/s. 147 for deposits in bank amounting Rs.11,00,000—Held, Bombay High Court in case of CIT vs. Jet Airways (I) Ltd., 331 ITR 236 has held that sec. 147 has this effect that AO has to assess or reassess income ("such income") which escaped assessment and which was basis of formation of belief and if he does so, he can also assess or reassess any other income which has escaped assessment and which, comes to his notice during course of proceedings— However, if after issuing a notice under s. 148, he accepted contention of assessee and holds that income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income— If he intends to do so, a fresh notice under s. 148 would be necessary, legality of which would be tested in event of a challenge by assessee—In view of above facts and circumstances and in view of judicial precedent—Assessee’s ground allowed. (j) In the case of CIT(EXEMPTION) vs. B.P. Poddar Foundation ForEducationSep 13, 2022 (2022) 115 CCH 0026 KolHCReassessment— Reopening of assessment—Assessee filed return of income declaring a total income of Rs. NIL—Return was processed under Section 143 (1—A survey was conducted from which it was found that assessee has deposited money with NIL—It was further seen that said company is a specified person of assessee— According to Assessing Officer, assessee is hit by Section 13(1)(c)(ii) and Section 13(1)(d) for such reason assessment was reopened under Section 147—Assessing Officer observed that from impugned documents it was seen that assessee had deposited sums with N and both these companies are specified persons of assessee—Therefore, Assessing Officer held that these amounts are to be taxed separately at Maximum Marginal Rate in terms of proviso to Section 164(2)—Total amount was treated as income by invoking Section 13(1)(b) read with Section 11(5)—Amount said to have received as donation was added back to income of assessee under Section 69A—CIT(A) affirmed view taken by Assessing Officer except for granting partial relief such as with regard to claim for carry forward of depreciation etc—Tribunal after taking note of factual position, more particularly, that addition which was made in reassessment proceedings having been deleted by CIT(A) reassessment on heads which were not part of reasons recorded for reopening assessment is not sustainable—Held, in case of GKN Driveshafts (India) Ltd. Versus Income-Tax Officer and Ors., (2003) 259 ITR 19 (SC) it was held that assessing officer is bound to furnish reasons within a reasonable time and noticee is entitled to file their objection to such notice and assessing officer is bound to dispose of same by passing a speaking order—Though Explanation 3 inserted by amendment empowers assessing officer to assess income in respect of any issue which has escaped assessment when such issue comes to his notice subsequently in Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO course of proceedings under Section 147 notwithstanding that reasons for such issue have not been included in reasons recorded under Sub-Section 2 of Section 148, prerequisite is there should be a valid notice—Admittedly, in case on hand, notice was held to be not sustainable—If that be so, assessing officer cannot be stated to be empowered to make a roving enquiry into other issues which according to him came to his notice during reassessment proceedings— Foundation of a reassessment proceeding is a valid notice and if this notice is held to be invalid entire edifice sought to be raised on such foundation has to collapse—Tribunal was right in granting relief to assessee—Revenue’s appeal dismissed. (k)In the case of Satyawan vs. ITO Jun 20, 2022 (2022) 65 CCH 0217 DelTribReassessment—Reopening of assessment—Assessee is challenging very validity of assessment made by Assessing Officer as assessment was reopened for escapement of income on account of cash deposits made into bank account by assessee and whereas while completing assessment Assessing Officer made various disallowances of expenses other than reason for which assessment was reopened—Held, a plain reading of reasons recorded Assessing Officer has reason to believe that income of assessee has escaped assessment in respect of cash deposits of Rs.68,68,705/- as they were remained unexplained—However, while completing assessment Assessing Officer disallowed 25% of purchases for want of bills and vouchers—Assessing Officer also disallowed opening capital shown by assessee in his capital account as no explanation was offered by assessee— There is one more addition which was made by assessee is in respect of license fee paid by assessee for want of supporting documents—Other than these three additions there is no other addition or disallowance made by Assessing Officer, which relates to cash deposits by assessee made into his bank account—In other words, Assessing Officer did not make any addition for which assessment was reopened—In case of Ranbaxy Laboratories Limited Vs. CIT (ITA. No. 148/2008) Delhi High Court held that if Assessing Officer does not make any addition on primary ground on basis of which proceedings under Section 147 were initiated he cannot make other additions—Ratio of decision of Delhi High Court squarely applies to facts of case since Assessing Officer did not make any addition for which reopening was made—Assessing Officer made various other additions other than addition for which assessment was reopened—In view of above, respectfully following above decision of jurisdictional High Court, reassessment order passed by Assessing Officer under Section 143(3) read with Section 147 is bad in law—Assessee’s grounds allowed. Thus when on the very basis of issuance of notice u/s 148/148A(B)/148(d) no addition has been made then no other addition/disallowance can be made. The other addition or disallowance can be made only with the addition/ disallowance proposed in the notice u/s 148/148A(b)/148(d). .

2. As in this case the notice u/s 148 dt.24.03.2023 has been issued by the Jurisdictional AO i.e ITO Ward-1 Sikarnot by the FAO, which is illegal invalid. In support in the case of Sharda Devi Chhajer&Ors. vs. ITO &Ors. (Raj) 25 19th March, 2025 it has been held that REASSESSMENT—NOTICE UNDER S. 148—Validity vis-a-vis notice issued by jurisdictional AO and not as per s. 151A—JAO shall not have the jurisdiction to issue notices under s. 148, as it would not only render s. 151A weak, but may also lead to its diminishing activation—For the purpose of assessment and reassessment under ss. 147, 148 and 148A and in light of the sanction under s. 151A, adherence has to be made to algorithm based random assessing system—Impugned notices issued by JAO are quashed and set aside, with liberty to the respondents to issue fresh notices in compliance of the CBDT notification dt. 29th March, 2022, by keeping the FAO as AO.—Sharda Devi Chhajer&Ors. vs. ITO &Ors. (Raj) 25. Further on this same issue the Honble Supreme Court has confirmed the order of the Honable Bombay High Court in the case of PrakashPandurangPatil v/s Income Tax Officer, Ward 5, Panvel&Ors. In W.P. No. NO. 10749 OF 2024 dated 12.08.2024. Vide SPECIAL LEAVE PETITION (CIVIL) Diary No. 39689/2025 [Arising out of impugned final judgment and order dated 12-08-2024 in WP No. 10749/2024 passed by the High Court of Judicature at Bombay] INCOME TAX OFFICER WARD 5 PANVEL & ORS. Petitioner(s) VERSUS PRAKASH PANDURANG PATIL Respondent(s) Date : 18-08-2025. Hon’ble Rajasthan High Court has also held the same in various case. The ld. CIT(A) has not speak a single word on our legal submissions despite available before him, which shows he was not having any adverse to our WS. Hence the assessment so made is illegal invalid and liable to be quashed.

February 20, 2023 (2023) 67 CCH 0398 Rajkot Trib (2023) 200 ITD 0014 (Rajkot-Trib) Asst. Year 2019-20 has held as under:- “7. We have heard the rival contentions and perused the material on record. In the instant facts, admittedly the assessee did not file return of income within the time permissible under section 139(1) of the Act. However, the assessee filed its return of income belatedly on 30-11-2020 and claimed deduction of Rs. 2,22,704/- under section 80P of the Act. The issue for consideration before us is that whether once the return of income is filed beyond the prescribed date under section 139(1) of the Act, can the deduction under section 80P of the Act be denied to the assessee, by way of adjustment under section 143(1) of the Act. On going through the statutory provisions, we observe that 80AC of the Act provides that no such deduction under section 80P of the Act shall be allowed to an assessee unless he furnishes a return of his income on or before the due date specified under section 139(1) w.e.f. assessment year 2018-19 onwards. However, section 143(1)(a)(v) of the Act provides that disallowance of deduction claimed under any of the provisions of Chapter VI-A under the heading “C.— Deductions in respect of certain incomes” (which includes deduction under section 80P of the Act), can be made if the return is furnished beyond the due date specified under sub-section (1) of section 139. This amendment has been introduced w.e.f. 1-4-2021. Accordingly, the above amendment would not apply to the impugned assessment year. Further, section 143(1)(ii) of the Act permits adjustment in case of an incorrect claim, if such incorrect claim is apparent from any information in the return. However, Explanation to the aforesaid section specifies the following cases where the claim made in the return of income can be said to be “incorrect” 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 7.1 A joint reading of the above provisions makes it evident that the claim of deduction under section 80P of the Act cannot be allowed the assessee, if the assessee does not file its return of income within the due date stipulated under section 139(1) of the Act w.e.f. assessment year 2018-19 onwards. However, we also note that amendment has been introduced in section 143(1)(a)(v) of the Act to provide that the claim of deduction under section 80P of the Act can be Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO denied to the assessee, in case the assessee does not file its return of income within the time prescribed under section 139(1) of the Act with effect from 01-04- 2021 and does not apply to the impugned assessment year i.e. assessment year 2019-20 relevant to financial year 2018-19. Accordingly, in our considered view, denial of claim under section 80P of the Act would not come within the purview of prima facie adjustment under section 143(1)(a)(v) of the Act, for the simple reason that the section was not in force during the period under consideration i.e. assessment year 2019-20. 7.2 The second issue for consideration is that whether the case of the assessee would fall within the purview of prima facie adjustment under section 143(1)(a)(ii)(an incorrect claim, if such incorrect claim is apparent from any information in the return). In our view, the scope of the adjustments that can be made under the said provision has been elaborated in the Explanation to the aforesaid section, which does not include denial of deduction claimed by the assessee in case the assessee does not furnish its return of income within the date stipulated under section 139(1) of the Act. The Explanation to the said section specifically provides for cases/instances when the claim made by the assessee could be said to be “incorrect”. Therefore, in our considered view, the case of the assessee would also not fall within the purview of prima facie adjustment under section 143(1)(a)(ii)(an incorrect claim, if such incorrect claim is apparent from any information in the return). 7.3 We note that in the case of Chirakkal Service Co-Operative Bank Ltd. Kannur v. CIT 2016] 68 taxmann.com 298 (Kerala), the Kerala High Court held that a return filed by assessee beyond period stipulated under section 139(1) or 139(4) or under section 142(1) or section 148 can also be accepted and acted upon for entertaining claim raised under section 80P provided further proceedings in relation to such assessments are pending in statutory hierarchy of adjudication in terms of provisions of Act. In the case of ASR Engg. & Projects Ltd. [2019] 111 taxmann.com 49 (Hyderabad- Trib.), the ITAT held that to be eligible to make claim under section 80-IA or any other section of Chapter VI A, assessee should have filed return of income under section 139(1) and even if it did not make claim for deduction in original return and subsequently file revised return making such claim, its claim for deduction under section 80-IA is maintainable. Therefore, where assessee had filed return under section 139(1), it was entitled to claim deduction under section 80-IA even if such claim was not made in original return but subsequently in revised return filed in response to notice issued under section 153A. In the case of Lanjani Co-Operative Agri Service Society Ltd. (CPC) v. DCIT [2023] 146 taxmann.com 468 (Chandigarh- Trib.), the ITAT held that the enabling provisions of sub- clause (v) of section 143(1) providing for disallowance of deduction under section 80P due to late filing of return having been introduced by Finance Act, 2021 effective from 1-4- 2021, disallowance of deduction claimed under section 80P during relevant years 2018-19 and 2019-20 on grounds of late filing of return was unjustified 7.4 We note that the instant case, there was a delay in filing the return of income by the assessee for the assessment year 2019-20 and return of income was filed within due date permissible u/s 139(4) of the Act, in which the claim for Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO deduction u/s 80P of the Act was made. Therefore, looking into the totality of facts, we are of the view that claim of deduction u/s 80P of the Act cannot be denied to the assessee only on the basis that the assessee did not file return of income its return of income within due date u/s 139(1) of the Act, in light of the discussion and judicial precedents highlighted above.

8. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 22-02-2023.” We also take into consideration the order of ITAT, Raipur Bench in the case of Jila Alp SankhyakBachatSahakariSakhSamitiMaryadit vs. DCIT in December 15, 2022 (2023) 221 TTJ 0404 (Raipur) wherein it has been held as under:- ‘’ 9. I have given a thoughtful consideration to the issue in hand, and find substance in the claim of the Ld. AR that though the amendment disabling an assessee to claim deduction under Chapter VIA of the Act was incorporated in Section 80AC of the Act vide the Finance Act, 2018 w.e.f. 01.04.2018, but as no such amendment was made available in section 143(1)(a) of the Act till 01.04.2021, therefore, no adjustment to the returned income of the assessee to the said effect could have been carried out during the year under consideration i.e. A.Y.2018-19. To sum up, it is the claim of the Ld. AR that as Section 143(1)(a)(v) of the Act was brought in conformity and rendered compatible to facilitate disallowance of claim for deduction u/s.80P r.w. Section 80AC(ii) only vide the Finance Act, 2021 w.e.f. 01.04.2021, thus, the disallowance of the assessee’s claim for deduction u/s.80P for a period prior thereto i.e. A.Y.2018- 19 could not have been carried out in the garb of an adjustment u/s.143(1)(a) of the Act.

10. Before proceeding any further, I deem it fit to cull out the post- amended provisions of Section 80AC of the Act, which reads as under: “80AC. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after— (i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80- IC or Section 80-ID or Section 80-IE; (ii)the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading “C-Deductions in respect of certain incomes.” no such deduction shall be allowed to him unless he furnishes a return of this income for such assessment year on or before the due date specified under sub-section (1) of Section 139.]” On a perusal of the aforesaid statutory provision, it transpires that sub-section (ii) of Section 80AC of the Act as was amended vide the Finance Act, 2018 w.e.f. 01.04.2018 contemplated, that no deduction under Chapter VIA of the Act would be admissible unless the assessee had furnished his return of income on or before the “due date” as specified under sub-section (1) of Section 139 of the Act. At the first blush, the view taken by the A.O who had vide his intimation issued u/s.143(1) dated 25.06.2019 disallowed the assessee’s claim of deduction u/s.80P for the reason that it had belatedly filed its return of income, i.e., beyond the stipulated time period provided u/s.139(1) of the Act appeared Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO to be correct, but then we are afraid that the fact is not so as it so appears. As stated by the Ld. AR, and, rightly so, the amendment in the machinery proviso i.e. Section 143(1)(a)(v) of the Act rendering the same as workable to disallow any deduction claimed by the assessee under Chapter VIA in a case return of income is furnished by him beyond the “due date” specified in sub-section (1) of Section 139 of the Act was made available only vide the Finance Act, 2021, w.e.f. 01.04.2021 i.e. from A.Y.2021-22 onwards. On the basis of the aforesaid position of law, I concur with the claim of the Ld. AR that as the pre-amended Section 143(1)(a)(v) jeopardized the allowability of an assessee’s claim for deduction only qua those claimed under Section 10A, 80-IA, 80-IAB, 80-IB, 80- IC, 80-ID or 80-IE of the Act, and Section 143(1)(a)(v) was only post- amendment that was made available on the statute vide the Finance Act, 2021 w.e.f. 01.04.2021 been made compatible, and in fact workable, to facilitate a disallowance contemplated u/s.80P w.e.f. A.Y.2021-22, therefore, it is beyond comprehension that as to how any such adjustment could have been made by the CPC, Bengaluru vide an intimation issued u/s.143(1) of the Act, dated 25.06.2019 for the year under consideration, i.e., A.Y.2018-19. On the basis of my aforesaid deliberations I find favour with the claim of the Ld. AR that as the CPC, Bengaluru had clearly traversed or, in fact exceeded its jurisdiction for disallowing u/s.143(1)(a)(v) of the Act the assessee’s claim for deduction u/s.80P de hors any power vested with it at the relevant point of time, thus, the same cannot be sustained and is liable to be vacated. Accordingly, I set-aside the order of the CIT(Appeals) and vacate the disallowance of the assessee’s claim for deduction u/s.80P of Rs.16,40,116/- made by the A.O. It is also noteworthy to mention that the CBDT vide its Circular No. 13/2023 dt.26.07.2023 has directed the Department to allow the condonation of delay where the return has been filed after due date as to claim made u/s 80P by the assesseswith following narration. ‘’Sub: Condonation of delay under clause (b) of sub-section (2) Section 119 of the Income Tax Act for returns of income claiming deduction u/s 80P of the Act for various assessment years from AY 2018-19 to AY 2022-23- Reg.’’ We find from the available records that the assessment in the case of the assessee had been completed but the assessee was unable to file application for condondation of delay before the prescribed authority. Hence, according to this circular, the assessee is entitled to avail of benefit u/s 80P of the Act. Hence in view of the above facts, circumstances of the case, case laws (supra) and the CBDT Circular, the Bench feels that the assessee is entitled to claim deduction u/s 80P of the Act with the direction to allow claim of Rs.3,13,541/- for A.Y. 2018-19. 4.1 Now we take up the appeal of the assessee for the assessment year 2019- 20 Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO 4.2 It is not imperative to repeat the facts of the case for the assessment year2019-20 as the issue raised in the appeal by the assessee for the assessment year 2018-19 are same and the decision taken by us in the case of the assessee for the assessment year 2018-19 shall apply mutatis mutandis in the assessment year 2019-20 also. Thus the appeal of the assessee is allowed.” This judgment is directly applicable in the present case, hence the addition so made may kindly be deleted in full here also However the ld. CIT(A) has not speak anything on the said judgment. 4.1 Further in section 148, it no where it has been stated that if the return has not been filed u/s 139, the claim of exemption shall be denied u/s 80P. The ld. AO has failed to read and understood the provisions of law and without considering in their true perspective and sense has denied the deduction and proceeded on misinterpretation. Thus the addition liable to be deleted . 4.2 Further the Society on the basis of provisions of Sec. 80P has not filled the ITR and under impression that the receipts/income below the limit. However filled u/s 148.

8. However the assessee had filed the ROI and Audit report suo-moto although u/s 148. Even As per the section 147 and section 148 of the Income Tax Act 1961 itself provide the opportunity to assessee for filing the return of income, hence we could not say that the Income Tax Return was late filed. And the Return filed u/s 148 is treated as filed u/s 139 and all the provision are applicable for the same. Further if there was any procedure default for non-filing the ITR timely, for that there many other penalties or provision has been given.

10. Prayer :Therefore in view of the above facts, submissions and legal position your honors is requested to delete the entire additions/disallowance and quash the order of the ld. AO and oblige.”

5.1 In support of the contention so raised in the written submission and the oral arguments the ld. AR of the assessee relied upon the following evidence / records :-

S. No. Particulars Page No. Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO 1. Copy of notice u/s 148A(b) dt. 27.02.2023 1-4 2. Copy of notice/order u/s 148A(d) dt. 24.03.2023 5-16 3. Copy of IT return with computation of total income 17-19 4. Copy trading P & L account and B/S 20-23 5. Copy of objection and reply to AO dt. 22.12.2023 24-30 6. Copy of reply to AO 31-36 7. Copy of SCN dt. 13.02.2024 36A-36K 8. Copy of reply to SCN 37-43 9. Copy of WS CIT(A) dt. 01.07.2024 44-61

7. Per contra, ld. DR heavily relied upon the legal finding recorded in the orders of the lower authority.

Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO On this issue, ld. AR of the assessee relied on the decision of the Jurisdictional High Court in the case of Commissioner of Income Tax Vs. Shri Ram Singh wherein the Hon’ble High Court held that :- 9. We have considered the submissions, and have gone through the judgments cited at the Bar, so also the impugned judgment of the learned Tribunal.

Katrathal Gram Sewa Sahkari Samiti Ltd. vs. ITO 22. Learned counsel for the Revenue could not find, or show, any contrary judgment of this Court, or of Hon'ble the Supreme Court, or even of any other High Court of the country.

Respectfully, following ratio as decided by our Jurisdictional High Court we allow legal ground no. 1 and as such allow the appeal of the assessee. The ground no. 2 being on merits of the dispute same becomes academic at this stage. Ground no. 3 is consequential and Ground no. 4 which is general do not require our finding. Resultantly, the appeal filed by the assessee is allowed. Order pronounced in the open court on 27/10/2025.