ENGANDIYUR FARMERS SERVICE CO-OPERATIVE BANK LIMITED NO F 977,KUNDALIYUR vs. INCOME TAX OFFICER, GURUVAYUR

Brief facts of the case are that the appellant is a co-operative society registered under the Kerala State Co-operative Societies Act, 1969. It is classified as primary agricultural credit co-operative society. It is engaged in accepting deposits from members and Engandiyur Farmers Service Co-op. Bank Ltd. lending money to its members and also engaged in trading of certain goods. The return of income AY 2023-24 was filed on 19.12.2023 disclosing Nil income after claiming deduction u/s. 80P(2)(a)(i) of the Income Tax Act, 1961 (the Act) of Rs. 3,46,60,360/-. The said return of income was processed by CPC u/s. 143(1) of the Act vide intimation dated 03.05.2024 by making adjustment of allowance of the claim for deduction u/s. 80P(2)(a)(i) of the Act for the reason that the return of income was not filed within the due date prescribed u/s. 139(1) of the Act. Against the said intimation an appeal was filed before the CIT(A), who vide the impugned order confirmed the adjustment made by the CPC by placing reliance on the provisions of section 80AC of the Act.

Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.

We have heard the rival contentions and perused the material available on record. The only issue that arises for our consideration is whether the CPC was justified in making adjustment by disallowing the claim u/s. 80P(2)(a)(i) of the Act by placing reliance on the provisions of section 80AC of the Act. Admittedly, the return of income was filed belatedly. Provisions of section 80AC provided that no deduction shall be allowed under the provisions of Chapter VIA unless the return of income was filed within the prescribed date provided u/s. 139(1) of the Act. These provisions were amended Engandiyur Farmers Service Co-op. Bank Ltd. w.e.f. AY 2018-19 and it is a mandatory condition for claiming deduction u/s. 80P of the Act. Therefore, we are of the considered opinion that the CPC was justified in making the adjustment by disallowing the claim u/s. 80P of the Act., as it amounts to “incorrect claim” as defined u/s. 143(1) of the Act.