Loading judgment…
Facts
The assessee, a primary agricultural cooperative society, claimed a deduction under Section 80P(2)(a)(i) for AY 2018-19, but it was denied by the CPC during processing under Section 143(1) due to belated filing of the return of income. The Assessing Officer and CIT(A) upheld the denial, citing Section 80AC which requires the return to be filed by the due date for claiming such deductions.
Held
The Tribunal noted CBDT Circular No. 13 of 2023, which allows Chief Commissioners of Income Tax (CCsIT) and Directors General of Income Tax (DGsIT) to condone delays in filing returns for 80P deductions for AY 2018-19 to 2022-23. Accordingly, the appeal was restored to the CIT(A) to enable the assessee to apply for condonation of delay from the appropriate authority, with the appeal to be adjudicated based on the outcome of that application.
Key Issues
Whether a cooperative society is entitled to a deduction under Section 80P despite belated filing of the return of income, considering the provisions of Section 80AC and CBDT Circular No. 13 of 2023 regarding condonation of delay.
Sections Cited
80P(2)(a)(i), 143(1), 154, 80AC, 119, 139(1), 119(2)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, CHANDIGARH
O R D E R
Aforesaid appeal by assessee for Assessment Year (AY) 2018-19 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals)-2, Vishakhapatnam [CIT(A)] dated 20-06-2025 in the matter of a rectification order passed by Ld. Assessing Officer [AO] u/s 154 r.w.s. 143(1) of the Act on 21-10-2020. Having heard rival submissions, the appeal is disposed-off as under.
2. The assessee being a primary agricultural cooperative society, filed its return of income on 06-12-2018 claiming deduction u/s 80P(2)(a)(i) for Rs.2,41,781/-. The CPC, while processing the return u/s 143(1), denied this claim since the due date for filing of return of income u/s 139(1) was 31-08- 2018. Since the return was filed belatedly, the deduction was denied. The assessee preferred rectification application which was rejected by Ld. AO on the ground that in terms of provisions of Sec.80AC, the return was to be filed by due date to lay claim on this deduction. The Ld. CIT(A) confirmed the action of Ld. AO against which the assessee is in further appeal before us.
3. I find that the appropriate course of action for the assessee, on the facts of such cases, lies in CBDT Circular No. 13 of 2023 dated 26-07-2023 (F.No.173/2112023-IT A-I) which read as under: - Sub:- Condonation of delay under clause (b) of sub-section (2) of section 119 of the Income-tax Act, 1961 for returns of income claiming deduction u/s 80P of the Act for various assessment years from A Y 2018-19 to AY 2022-23- Reg. Section 80P of the Income-tax Act, 1961 (hereafter referred to as 'Act') provides for deduction in respect of income of co-operative societies under Chapter V1A-Part-C ("Deductions in respect of certain incomes") of the Act.
In so far as section 80P of the Act is concerned, Finance Act, 2018 substituted section 80AC of the Act w.e.f. 01 .04.2018 which provides as under – Deduction will not be allowed unless return furnished 80AC. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after- (i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80- IC or section 80-/D or section 80-IE; (ii) the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading "C.- Deductions in respect of certain incomes", no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (I) of section 139.
Applications have been received in the Central Board of Direct Taxes (hereafter referred to as 'the Board') from co-operative societies claiming deduction u/s 80P of the Act for various assessment years from AY 2018-19 to AY 2022-23, regarding condonation of delay in furnishing return of income and to treat such returns as 'returns furnished within the due date under sub-section (I) of section 139 of the Act stating that delay in furnishing return of income was caused due to delay in getting the accounts audited under respective State Laws.
In order to mitigate genuine hardship in cases referred to in para 3, the Board, in exercise of the powers conferred under section 119 of the Act, hereby directs that the Chief Commissioners of Income· tax (CCsIT) / Directors General of lncome tax (DGsIT) are authorised to deal with such applications of condonation of delay pending before the Board, upon transfer of such applications by the Board, and decide such applications on merits, in accordance with the law.
The Board hereby further directs that the CCsIT/DGsIT, henceforth, shall admit all pending as well as new applications for condonation of delay in furnishing returns of income claiming deduction u/s 80P of the Act, filed either in the Board or in field formation for the assessment years 2018·19 to 2022·23 and decide such applications on merits in accordance with the law where such person is required to get his accounts audited under respective State Laws.
In the context of para-5 above, the CCslT/DGsIT while deciding such applications for condonation of delay in furnishing return of income, shall satisfy themselves that the applicant's case is a fit case for condonation under the existing provisions of the Act. The CCslT/DGsIT shall examine the following while deciding such applications – (i) the delay in furnishing the return of income within the due date under sub-section (I) of section 139 of the Act was caused due to circumstances beyond the control of the assessee with appropriate documentary evidence/s; (ii) where delay in furnishing return of income was caused due to delay in getting the accounts audited by statutory auditors appointed under the respective State Law under which such person is required to get his accounts audited, the date of completion of audit vis-a-vis the due date of furnishing the return of income under sub-section (I) of section 139 of the Act; and (iii) any other issue indicating towards tax avoidance or tax evasion specific to the case, which comes into the light in the course of verification and having bearing either in the relevant assessment year or establishing connection of relevant assessment year with other assessment year/s. 6.1 The cases falling under para 6(iii) above, would require further necessary action as per law. " .' 7. The CCslT/DGslT shall preferably dispose the application within three months from the end of the month in which such application is received from the applicant or transferred by the Board. No order rejecting the application under section 119(2)(b) of the Act shall be passed without providing the applicant an opportunity of being heard.
Hindi version to follow.
In view of the above circular, I restore the appeal back to Ld. CIT(A) so as to enable the assessee to seek condonation from appropriate authority in terms of above circular. The appeal would be adjudicated considering the outcome of the assessee’s such application. 4. The appeal stands allowed for statistical purposes. Order pronounced on 06th January, 2026.