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Facts
The assessee, a co-operative society, did not file an income tax return for Assessment Year 2014-15. The Assessing Officer completed the assessment under Section 147 read with Section 144 and denied the deduction claimed under Section 80P, a decision subsequently upheld by the CIT(A).
Held
Following the jurisdictional Kerala High Court judgment, the Tribunal held that a deduction under Section 80P cannot be allowed if the assessee has failed to file a valid return of income within the due date prescribed under Section 139(1) of the Income Tax Act. The provisions of Section 80A(5) and the amended Section 80AC mandate that such claims must be made in a duly filed return.
Key Issues
Whether the deduction under Section 80P of the Income Tax Act is permissible if the assessee has not filed a valid return of income within the statutory due date.
Sections Cited
250, 80P, 139(1), 147, 144, 80A(5), 139, 142(1), Chapter VI-A, 80AC, 139(4), 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI GEORGE GEORGE K., VP & SHRI INTURI RAMA RAO, AM
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH
BEFORE SHRI GEORGE GEORGE K., VP AND SHRI INTURI RAMA RAO, AM
ITA No. 714/Coch/2023 Assessment Year: 2014-15 Kochin Co-operative Society Ltd. .......... Appellant VII/1832, Lalan Road, Mattancherry Kochi 682002 [PAN: AABAK1735C] vs. The Income Tax Officer .......... Respondent Ward -2(4) & TPS, Kochi Appellant by: Ms. Niveditha K. Kamath, Advocate Respondent by: Shri Sanjit Kumar Das, CIT. DR & Smt. Leena Lal, Sr. D.R. Date of Hearing: 01.04.2025 Date of Pronouncement: 01.04.2025
O R D E R Per: George George K., VP This appeal at the instance of assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)], dated 20.07.2023 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter "the Act"). The relevant Assessment Year is (AY) 2014-15.
The solitary issue argued by the learned A.R. was whether the CIT(A) is justified in confirming AO’s action in denying the claim of
2 ITA No. 714/Coch/2023 Kochin Co-operative Society Ltd. deduction u/s. 80P of the Act for the reason that assessee has not filed the return of income within the due date prescribed u/s. 139(1) of the Act.
Brief facts of the case are that the assessee is a consumer co- operative society registered under the provisions of the Kerala Co- operative Societies Act, 1969. The assessee had not filed return of income for the relevant assessment years. The AO completed the assessment u/s. 147 r.w.s. 144 of the Income Tax Act, 1961 (the Act) vide order dated 24.03.2012, disallowing the claim for deduction u/s. 80(P) of the Act.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO. In paragraph 6.4.9 he relied on the judgement of the Hon'ble Kerala High Court in the case of Nileshwar Range Kallu Chethu Vyavasaya Thozihilali Sahararana Sangham [2023] 459 ITR 730 (Ker).
Being aggrieved, assessee is in appeal before this Tribunal. The learned counsel for the assessee, placing reliance on the decision of the Hon'ble Bangalore Tribunal in the case of Prathamika krishi Pattina Sahakara Sangh Ltd., ITA No. 614/Bang/2021 dated 13.06.2022, submitted that even in the absence of return of income deduction u/s. 80P cannot be denied merely because no return of income was filed, as section 80A(5) has no application in the case no return of income was filed.
On the other hand, the learned CIT- DR submits that the issue in the appeal is squarely covered against the assessee by the decision of the Hon'ble Kerala High Court in the case of Nileshwar Range Kallu Chethu Vyavasaya Thozihilali Sahararana Sangham [2023] 459 ITR 730 (Ker)
3 ITA No. 714/Coch/2023 Kochin Co-operative Society Ltd. overruling its earlier decision in the case of Chirakkal Service Co- operative Bank Ltd. v. CIT[2016] 384 ITR 490 (Ker).
We have heard the rival contentions and perused the material on record. The solitary issue that arises for our consideration is whether or not the CIT(A) was correct in law in confirming the action of the AO denying deduction u/s. 80P of the Act as no valid return of income was filed by the assessee. Admittedly, in the present case the assessee has not filed valid return of income either under the provisions of section 139 of the Act or in response to the notice u/s. 142(1) issued by the AO. The provisions of sub-section 80A(5) mandates that in order to claim a deduction under the section specified under Chapter VI-A, a claim is required to be made in the return of income. The issue in the present case is settled against the assessee by the decision of the Hon'ble Jurisdictional High court in the case of Nileshwar Range Kallu Chethu Vyavasaya Thozihilali Sahararana Sangham [2023] 459 ITR 730 (Ker) wherein it was held as under: - “11. On a consideration of the rival submissions and on a perusal of the statutory provisions, we find that a reading of Section 80A(5) and Section 80AC of the IT Act as they stood prior to 1.4.2018, when the latter provision was amended by Finance Act 2018, would reveal that the statutory scheme under the IT Act was to admit only such claims for deduction under Section 80P of the IT Act as were made by the assessee in a return of income filed by him. That return can be under Sections 139(1), 139(4), 142(1) or Section 148, and to be valid, had to be filed within the due date contemplated under those provisions. Under Section 80A(5), the claim for deduction under Section 80P could be made by an assessee in a return filed within the time prescribed for filing 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 of the IT Act,
4 ITA No. 714/Coch/2023 Kochin Co-operative Society Ltd. 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 IT Act. In other words, after 1.4.2018, even 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, 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 clear that the statutory scheme permits the allowance of a deduction under Section 80P of the IT Act only if it is made in a return recognised as such under the IT Act, and after 1.4.2018, only if that return is one filed within the time prescribed under Section 139(1) of the Act. As the return in these cases, for the assessment years 2009- 10 and 2010-11, were admittedly filed after the dates prescribed under Sections 139(1) and 139(4) or in the notices issued under Section 142(1) and Section 148, the returns were indeed non-est and could not have been acted upon by the Assessing Officer even though they were filed before the completion of the assessment. 12. 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 pre-condition 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 viewed, a failure on the part of an assessee to comply with the precondition for obtaining the deduction cannot be condoned either by the statutory authorities or by the courts. 13. It is in the backdrop of the aforesaid discussion that we must consider the findings of a Division Bench of this Court in The Chirakkal Service Co-operative Bank Ltd. [supra]. The findings therein, that appear to suggest that 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 IT Act, ignores the perspective that sees the requirement of the claim for deduction being made in a valid return as a pre-condition for obtaining the benefit of the statutory deduction. The said findings 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 valid return under the Act, and therefore have necessarily to be seen as per
5 ITA No. 714/Coch/2023 Kochin Co-operative Society Ltd. incuriam. We also find that the subsequent amendments to Section 80AC by the Finance Act 2018 fortifies the view that we have taken for, it makes the claim for deduction under Section 80P conditional on filing a return within the due date prescribed under Section 139(1) of the IT Act. In other words, the pre-condition for claiming the deduction under Section 80P of the IT Act has now been made more stringent by reducing the time available to an assessee for making the claim.” Respectfully following the judgement of the Hon'ble Jurisdictional High Court, we hold that the assessee is not entitled for deduction u/s. 80P of the Act as no valid return of income was filed by the assessee society. Thus, we do not find any merit in the appeal filed by the assessee.
In the result, the appeal filed by the assessee stands dismissed.
Order pronounced in the open court on 1st April, 2025.
Sd/- Sd/- (INTURI RAMA RAO) GEORGE GEORGE K. JUDICIAL MEMBER VICE PRESIDENT Cochin, Dated: 1st April, 2025 n.p. Copy to:
The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order
Assistant Registrar ITAT, Cochin