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Facts
The assessee, a co-operative society, filed its Income Tax Return for AY 2019-20 belatedly in response to a Section 148 notice, claiming deduction under Section 80P. The Assessing Officer denied the Section 80P deduction, citing Section 80AC due to the belated filing, and the CIT(A) upheld this. The assessee had filed a condonation petition under Section 119(2)(b) due to floods, which was subsequently allowed by the PCCIT, Kerala.
Held
The Tribunal acknowledged the PCCIT's order condoning the delay in filing the ITR under Section 119(2)(b). Consequently, the Tribunal remitted the matter back to the AO with a directive to implement the PCCIT's order and allow the Section 80P deduction of Rs. 91,23,250/- after due verification, in accordance with the law.
Key Issues
Whether the Section 80P deduction can be denied due to a belatedly filed Income Tax Return, when the delay has been condoned by the PCCIT under Section 119(2)(b), and the applicability of Section 80AC in such a scenario.
Sections Cited
80P, 80P(2)(a)(i), 80P(2), 147, 119(2)(b), 80AC, 139, 139(1), 148, 143(2), 142(1), 144B, 44AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH:COCHIN
Before: SHRI INTURI RAMA RAO & SHRI KESHAV DUBEY
Assessment Year: 2019-20 Angamaly Service Co-operative Bank Ltd. No.714, angamaly SO Vs. Ernakulam ITO Ward-1 & TPS Kerala 683 572 Aluva PAN NO : AACAA1050B APPELLANT RESPONDENT Appellant by : None. Respondent by : Smt. Leena Lal, Sr. D.R. Date of Hearing : 28.01.2025 Date of Pronouncement : 02.04.2025 O R D E R
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of CIT(A)/NFAC dated 21.6.2024 vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1065923392(1) for the AY 2019-20.
The assessee has raised the following grounds of appeal:
Brief facts of the case are that the assessee is a co-operative society registered under the Kerala Co-operative Societies Act, 1969. It is submitted by the AR of the assessee that as the assessee received the audit report after the due date of filing the return of income and therefore, could not file the return of income within the due date as specified u/s 139 of the Act. The notice u/s. 148 of the Act was issued on 30/03/2023 and in response to notice u/s 148 of the Act, the Assessee filed the return of income for the A.Y 2019- 20 on 03/05/2023 claiming deduction under section 80P of the Act and declared total income as NIL. Thereafter, notices u/s 143(2) as well as u/s. 142(1) of the Act along with Show Cause Notice was issued to the assessee and the assessee submitted its reply against the aforesaid notices. The AO completed the assessment proceedings u/s 147 r.w.s. 144B on 21/02/2024 by disallowing deduction u/s 80P of the Act on the ground that the assessee did not file the return of income within the due date which is specified in Section 139(1) of the Act. The AO accordingly, computed the total income at Rs. 91,23,250/- and raised demand of Rs. 59,51,684/- for the AY 2019-20.
Aggrieved by the assessment completed u/s. 147 r.w.s. 144B of the Act dated 21.02.2024, the assessee preferred an appeal before the CIT(A)/NFAC.
The ld. CIT(A)/NFAC dismissed the appeal of the assessee on the ground that the appellant has not informed about the outcome of condonation petition and also return in the case is filed in response to u/s. 148 of the Act and not as per any order passed based on condition allowed u/s. 119(2)(b) of the Act. Further on merits, the ld. CIT(A)/NFAC held that the assessee is hit by section 80AC of the Act which provides that from AY 2018-19 onwards, the deductions that come under part C of Chapter – VI A can be allowed Angamaly Service Co-operative Bank Ltd., Angamaly Page 3 of 6 only if the assessee has furnished a return on or before the due date u/s. 139 of the Act wherein the deduction is claimed.
Aggrieved by the order of ld. CIT(A)/NFAC, the assessee has filed the present appeal before this Tribunal. The assessee has also filed copy of condonation approval order dated 02.01.2025.
Before us, the ld. AR of the assessee vehemently submitted that the deduction was denied mainly by invoking section 80AC of the Act that the return of income was not filed within the due date specified u/s. 139(1) of the Act. Further, ld. AR of the assessee submitted that as per CBDT circular no. 13/2023, the assessee had filed a condonation petition before the PCCIT, Kerala who by his order dated 02.01.2025 has allowed the petition of the assessee and condonation approval order was issued. The AR of the assessee accordingly prayed that the appeal may be allowed as the ld. PCCIT, Kerala had already condoned the delay in filing the ITR for the AY 2019-20.
The ld. DR on the other hand supported the order of the authority below.
We have heard the rival submissions and perused the material on record. On going through the order of the ld. CIT(A)/NFAC, we find that ld. CIT(A)/NFAC dismissed the appeal on the ground that the assessee is hit by section 80AC of the Act which provides that from AY 2018-19 onwards, the deductions that come under part C of Chapter – VI A can be allowed only if the assessee has furnished a return on or before the due date u/s. 139 of the Act. Further, ld. CIT(A)/NFAC is of the view that the assessee has not informed about the outcome of condonation petition and also return in this case is filed in response to u/s. 148 of the Act and not as per any order passed based on condition allowed u/s. Angamaly Service Co-operative Bank Ltd., Angamaly Page 4 of 6 119(2)(b) of the Act. Before us, the ld. AR of the assessee submitted that as per CBDT circular no. 13/2023, the assessee had filed a condonation petition before the PCCIT, Kerala who by his order dated 02.01.2025 has allowed the petition of the assessee and condonation approval order has been passed which is reproduced below for ease of reference and convenience:
9.1 On going through the above approval letter, we find that ld. PCCIT, Kerala has condoned the delay in filing the return of income for the AY 2019-20 beyond the due date specified u/s. 139(1) of the Act in exercise of the powers conferred upon him under clause (b) of subsection (2) of section 119 of the Act r.w.s. CBDT Circular No. 13/2023, dated 26.07.2023 with a direction that the assessee is not eligible for interest on refund if any, arising on such return of income filed belatedly.
9.2 Being so, in the interest of justice and equity, we remit the issue in dispute to the file of the AO with a direction to give effect of Angamaly Service Co-operative Bank Ltd., Angamaly Page 6 of 6 the above order of the ld. PCCIT, Kerala vide its order dated 02.01.2025 and pass necessary order after the due verification allowing the deduction as claimed by the assessee u/s. 80P of the Act amounting to Rs. 91,23,250/- in accordance with the law. It is ordered accordingly.
In the result, appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 02nd April, 2025 Sd/- Sd/- (Inturi Rama Rao) (Keshav Dubey) Accountant Member Judicial Member Bangalore, Dated: 2nd April, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order
Asst. Registrar, ITAT, Cochin.