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Facts
The assessee, a cooperative society, filed its return of income electronically within the due date. However, the verification of the return was completed beyond the stipulated 30-day period. The CPC disallowed the deduction claimed under Section 80P on account of delayed verification, treating the return as belated.
Held
The Tribunal held that the verification of a return is a procedural requirement. A delay in verification, when the return was filed within the due date, is a curable procedural defect and does not invalidate the return. Therefore, the denial of deduction based solely on delayed verification is not justified.
Key Issues
Whether the disallowance of deduction under Section 80P solely on account of delayed verification of an electronically filed return is justified, despite the return being filed within the due date.
Sections Cited
80P, 80AC, 139(1), 143(1), 250, 36(1)(va)
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Income Tax Appellate Tribunal, ‘SMC’ BENCH, BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The present appeal has been instituted by the assessee against the order of the Ld. CIT(A) passed u/s 250 of the Act dated 04 .08.2025.
The issue raised by the assessee is that the learned CIT(A) erred in confirming the disallowance of deduction claimed under section 80P of the Act on account delayed verification of return of income.
The facts in brief are that the assessee, a cooperative society, filed its return of income for the A.Y. 2022-23 electronically as on 29th September 2022 declaring total income at Nil after claiming deduction under section 80P of the Act for Rs. 16,28,380/- only. However, the verification of return filed electronically, was done as 30th December 2022 which was beyond 30 days period allowed for verification.
3.1 The return was processed under section 143(1) of the Act, wherein the CPC disallowed the deduction claimed under section 80P of the Act on account of delayed filing of return. The assessee filed multiple rectification request which were rejected by the CPC and the claim of deduction was disallowed.
3.2 The assessee preferred to file an appeal before the learned CIT(A).
3.3 The learned CIT(A) found that the assessee has not responded the hearing notices issued. However, the learned CIT(A) considering the ground of appeal and statement of facts furnished, adjudicated the appeal of the assessee confirming the disallowances by the CPC. The learned CIT(A) found that the assessee submitted the return electronically as on 29th September 2022, however, the same was verified as on 30th December 2022 i.e. beyond the prescribed time limit of 30 days. The para 6(ii) of the CBDT notification No. 5/2022 dated 29- 07-2022 prescribed that if the verification of electronically submitted return was not completed within 30 days, then it is deemed that the return is filed on the day in which the same was verified. Hence, in the case of the assessee, the return of income was filed as on 30th December 2012 which is after the due date prescribed under section 139(1) of the Act. Therefore, the CPC rightly disallowed the claim of . deduction under section 80P of the Act invoking the provisions of section 80AC of the Act. The learned CIT(A) also referred to the ruling of the Hon’ble Supreme Court in the case of Checkmate Services P Ltd vs. CIT in civil appeal no. 2833 of 2016 dated
12. October 2022 wherein it was held that it was essential to comply the condition to file the return of income within the due date for claiming deduction.
Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us.
The learned AR before us submitted that the assessee filed its return of income electronically on 29.09.2022 which was well within the due date prescribed u/s 139(1) of the Act. The delay occurred only in completing the verification of the return which was done on 30.12.2022. It was argued that verification of the return is only a procedural requirement and once the defect is cured, the return relates back to the original date of filing. Therefore, the return cannot be treated as a belated return merely because the verification was completed after 30 days.
5.1 The Ld. AR further submitted that section 80AC of the Act denies deduction only where the return of income is not furnished within the due date prescribed u/s 139(1) of the Act. In the present case, the return was admittedly furnished within the due date and therefore the deduction claimed u/s 80P of the Act cannot be denied on account of delayed verification. Accordingly, the action of CPC and the finding of the Ld. CIT(A) were challenged.
On the contrary, the learned DR supported the orders of the lower authorities. It was submitted that as per CBDT Notification No. 5/2022 dated 29.07.2022, where the verification of an electronically filed return is not completed within 30 days, the return is deemed to have been filed on the date of verification. Since the assessee verified the return on 30.12.2022 which is beyond the due date prescribed u/s 139(1) of the Act, the return is to be treated as belated. Therefore, in view of the provisions of section 80AC of the Act, the deduction claimed u/s 80P of the Act was rightly disallowed while processing the return of income u/s 143(1) of the Act.
We have heard the rival contentions of both the parties and perused the materials available on record. The undisputed facts are that the assessee, a cooperative society, filed its return of income electronically on 29.09.2022 declaring total income at Nil after claiming deduction u/s 80P of the Act amounting to Rs. 16,28,380. However, the verification of the electronically filed return was completed on 30.12.2022 which was beyond the period of 30 days prescribed for verification. While processing the return u/s 143(1) of the Act, the CPC treated the return as filed on the date of verification and consequently disallowed the deduction claimed u/s 80P of the Act by invoking the provisions of section 80AC of the Act. The action of the CPC was affirmed by the learned CIT(A) by placing reliance on the CBDT Notification No. 5/2022 dated 29.07.2022 and also referring to the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. vs CIT(supra).
7.1 After considering the materials on record, we are unable to concur with the conclusion drawn by the learned CIT(A). In the present case, it is not in dispute that the assessee filed the return of income electronically within the due date prescribed u/s 139(1) of the Act. The only lapse on the part of the assessee was that the verification of such return was completed beyond the period of 30 days. In our considered view, the act of verification of return is essentially a procedural requirement to validate the return already filed electronically. Once the defect relating to verification is cured, the return becomes valid and relates back to the date on which it was originally filed.
7.2 The provision of section 80AC of the Act provides that deduction under Chapter VI-A under the heading “C.—Deductions in respect of certain incomes” shall not be allowed unless the return of income is furnished on or before the due date specified u/s 139(1) of the Act. The provision therefore requires that the return of income should be furnished within the due date. In the present case, the return of income was admittedly furnished within the prescribed due date. The delay occurred only in completing the verification of the return, which in our view is a procedural defect that stood subsequently cured.
7.3 It is a settled principle of law that a procedural lapse cannot defeat a substantive claim when the essential requirement of filing the return within the prescribed time is satisfied. The denial of deduction u/s 80P of the Act merely on account of delayed verification of the electronically filed return would defeat the very object of the incentive provision. Therefore, the provisions of section 80AC of the Act cannot be invoked in the present case to deny the deduction claimed by the .
Page 6 of 7 assessee. In holding so, we draw support and guidance from the decision of coordinate bench of this Tribunal in the case of M/s Electronics & Controls Power Systems Pvt Ltd vs. DCIT in ITA No. 914/Bang/2016. In the said case the assessee (M/s. Electronics & Controls Power Systems Pvt Ltd) e-filed return for the A.Y. 2008-09 as on 30th September 2008 i.e. within the due date under section 139(1) of the Act. However, the verification/form ITR-v was filed on 31-03-2009. Therefore, relying upon the Board’s Notification No. SO 1281(E) dated 27.07.2007, the AO has concluded that the return of income was deemed to have been filed on the day when ITR-V was filed i.e., on 31.03.2009. Since return was not filed within the due date as required under section 139(1) of the Act, no carry forward of losses of Rs. 11,00,25,707/- is allowed for future years. The dispute reached to Tribunal. The Tribunal vide order dated 30-11-2017 decided the issue in favour of the assessee by observing as under: 9. In the instant case, the ITR-V was filed though belated but on 31.03.2009. The return of income was filed well before the due date of filing of return under section 139(1) of the Act. Mere delay in submitting the ITR-V does not make the return invalid for denying the benefit of carry forward of losses in future years. We therefore hold that the assessee is entitled to carry forward of loss to future years. Accordingly, we set aside the order of the CIT(A) and direct the AO to allow the carry forward of losses to future years.
7.4 We also note that the reliance placed by the learned CIT(A) on the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd (supra) is misplaced. The said decision was rendered in the context of allowability of employees’ contribution to PF/ESI under section 36(1)(va) of the Act and dealt with the requirement of strict compliance with the due dates prescribed under the respective statutes. The issue involved in the present case relates to delayed verification of an electronically filed return and therefore the ratio of the said decision, . in our humble understanding, is not applicable to the facts of the case before us.
7.5 Considering the above facts and the legal position, we hold that the deduction claimed by the assessee u/s 80P of the Act cannot be denied merely on account of delayed verification of the electronically filed return. Accordingly, the disallowance made while processing the return u/s 143(1) of the Act and sustained by the learned CIT(A) is hereby set aside. The AO is directed to allow the deduction claimed by the assessee u/s 80P of the Act in accordance with law. Hence, the ground of appeal of the assessee is hereby allowed.
8. In the result, the appeal of the assessee is hereby allowed.
Order pronounced in court on 17th day of March, 2026