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Facts
The assessee, a primary agricultural cooperative credit society, did not file its income tax return by the due date. The AO reopened the assessment and denied the deduction claimed under Section 80P, citing Section 80AC. The CIT(A) upheld the AO's order.
Held
The Tribunal noted that the Hon'ble High Court, in similar cases, directed the condonation of delay in filing returns for claiming deductions under Section 80P. The High Court also referenced a Supreme Court judgment stating that procedural delays should not impede justice.
Key Issues
Whether the assessee is eligible for deduction under Section 80P despite a delay in filing the income tax return, considering the High Court's directions?
Sections Cited
80P, 80AC, 139(1), 148, 250
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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: MS. PADMAVATHY.S & SHRI MANU KUMAR GIRI
आदेश / O R D E R
PER PADMAVATHY.S, A.M: This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 21.08.2025 for Assessment Year (AY) 2020-21.
The assessee is a primary agricultural cooperative credit society. The A.O received information that the assessee during the year under consideration has entered into considerable amount financial transactions. Since, the assessee did not file the return of income the A.O reopened the MM 289 Thondamanginam Primary Agri Co-op. Credit Society :- 2 -:
assessment by issue of notice u/s. 148 of the Act. In response to the said notice, the assessee filed the return of income after claiming deduction u/s. 80P to the tune of Rs. 8,57,728/-. The A.O denied the said deduction for the reason that the assessee did not file the return of income before the due date specified u/s. 139(1) of the Act and therefore, as per provisions of section 80AC of the Act, the deduction claimed by the assessee cannot be allowed. On further, appeal the CIT(A) confirmed the order of the A.O on similar grounds.
None appeared for the assessee and we heard the Ld. Departmental Representative.
4. The assessee has made a written submission on 25.02.2026 wherein it is stated that the assessee filed a petition before Chief Commissioner of Income Tax seeking condonation of delay in filing the return of income which was rejected by the CCIT. It is further submitted that the assessee filed a writ petition before the Hon'ble Madras High Court against the rejection order of CCIT and the Hon'ble High Court has directed the concerned authorities to condone the delay in filing the return of income. Accordingly, it is submitted that the assessee should be allowed the deduction u/s. 80P of the Act.
The Ld. Departmental Representative (DR), on the other hand, relied on the orders of the lower authorities. In this regard, we notice that the Hon'ble High Court has given relief to the assessee against the writ petition by holding that: “2. In these writ petitions, the petitioners have challenged the impugned orders as detailed in Column No.7 for the respective assessment years as detailed in Column.2. By the impugned order, the application filed for condonation of delay in filing the return for claiming MM 289 Thondamanginam Primary Agri Co-op. Credit Society :- 3 -: exemption/deduction under 80(P) of the Income Tax Act, 1961, has been rejected. Admittedly, the returns were not filed by the due date as per Section 139(1) of the Income Tax Act, 1961. All the petitioners in these writ petitions are Primary Agricultural Cooperative Credit Society. The denial of the benefit of exempt deduction under Section 80P(2)(d) of the Act is being denied only on the ground that no returns were filed by the petitioners within the due date as detailed in Column.4 to the above table. This Court has taken a categorical stand in several cases that if the benefit of deduction is otherwise legitimately available, the delay in filing the return of income should not come in the way of extension of the deduction. Therefore, the impugned order seeking to reject the application filed for condonation of delay in filing the return deserves to be interfered with.
3. The Writ Petition is however stoutly opposed by the learned counsel for the respondent on the ground that there is no scope for interfering with the impugned order of the respondent. It is submitted that despite the statutory audit report being furnished to the petitioners, there is a delay in filing the application for condonation of delay. It is submitted that this is a recurring issue and every year there is a delay on the art of the petitioners in claiming such filing the returns in time.
The Hon'ble Supreme Court in Commissioner Of Sales Tax, State of Uttar Pradesh v. Auriaya Chamber of Commerce reported in 1986(25)ELT 867 has held that the procedures are hand-maids of justice and not the mistress of law. Applying the above ratio, I am of the view that the impugned orders are liable to be quashed with a consequential direction to the concerned assessing officer to finalise the assessment by extending the benefit of Section 80P(2d) of the Income Tax Act. Since the petitioners have delayed in filing the returns in time, the petitioners shall also pay a token amount of Rs.5,000/- each, to the Adyar Cancer Institute (WIA), East Canal Bank Road, Adyar, Chennai, within a period of 30 days from the date of receipt of a copy of this order. Subject to the petitioners complying the same, the second respondent shall pass the fresh assessment order by extending the benefit of Section 80P of the Income Tax Act, if the petitioners are otherwise entitled to the relief but for the delay in filing the returns in time.”
In view of the above directions of the Hon'ble High Court, we remit the appeal back to the A.O to consider the claim of deduction u/s. 80P of the assessee as per the directions of Hon'ble High Court.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on 04th day of March, 2026 at Chennai.