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Facts
The assessee, a Primary Agricultural Cooperative Society (PACS), filed its Income Tax Return for AY 2019-20 on 14.10.2019, claiming a deduction of Rs. 24.69 lakhs under section 80P. The CPC, Bengaluru, processed the return under section 143(1)(a) and disallowed the deduction, treating the return as belated, a decision upheld by the CIT(A). The assessee contended that the due date for filing ITR was extended for AY 2019-20.
Held
The Tribunal found that the rectification order and the CIT(A)'s order lacked clear reasons for the disallowance of the section 80P claim, which appeared to be based on presumptions about the return being belated. It also noted the absence of intimation for the 143(1)(a) adjustment. Considering the ambiguity and the potential applicability of CBDT circulars extending the due dates, the Tribunal remitted the matter back to the jurisdictional Assessing Officer for a fresh assessment.
Key Issues
1. Whether the disallowance of Section 80P deduction was justified, particularly concerning the extended due date for filing the Income Tax Return for AY 2019-20. 2. Whether the adjustment made under Section 143(1)(a) was valid without proper intimation and clear reasons.
Sections Cited
80P, 143(1)(a), 154, 139, 80AC, 119(2)(a), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. MANOJ KUMAR AGGARWAL & SH. UDAYAN DASGUPTA
This appeal is filed by the assessee against the order of ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 20.06.2024 passed u/s 250 of the Income Tax Act, 1961 which has emanated from the order of the A.O. CPC, Bangaluru dated 09.06.2023 passed u/s 154 of the I.T. Act, 1961.
Grounds of appeal taken by the assessee in Form No. 36 are as follows:
“1. Statement of Facts - The assessee is a primary co-operative agricultural society (PACS) engaged in the business of providing banking & credit facilities to its members. The Appellant is being assessed to tax in the status of AOP. The Appellant filed its return of income for A.Y. 2019-20 on 14/10/2019 well within the extended period of the due date .i.e 31/10/2019 declaring total income at Rs. Nil, after claiming deduction of Rs. 24,69,692/- under section 80P of the Income Tax Act, 1961. The CPC, Bengaluru in its order U/s 143(1)(a) denied the deduction U/s 80P on the ground that, the due date for filing return of income U/s 139 for A.Y. 2019-20 as applicable to the Appellant was 30/09/2019, in other words treating the return belated one, which is wrong. The Ld. CIT(A) NFAC Delhi too ignored the submissions and hence denied the deduction U/s 80P in view of substantive provisions of Sec. 80AC. Hence, this appeal filed
2. The Ld. CIT(A) NFAC Delhi as well as ACIT-CPC Bengaluru failed to allow the assessee deduction u/s 80P of the act on the ground that return of income is not filed by due date .i.e. 30/09/2019 which infact was extended to 31/10/2019 that year. Therefore it is prayed the order of CIT(A) may please be cancelled and deduction u/s 80P amounting to Rs. 24,69,692/- may please be allowed.
3. The Ld. CIT(A) NFAC Delhi has wrongly misread the provisions of section 80AC and confirming the order of ACIT-CPC Bengaluru, that the adjustment of was very much within the purview of enabling machinery provisions of sub section (ii) of section 143(1)(a) of the act, which is wrong as due date was extended to 31/10/2019 during the assessment year. It is prayed that the order of CIT(A) NFAC may please be cancelled.
4. The appellant craves leave to amend any ground(s) or add any new ground(s) before the appeal is finally disposed off.”
Assessment Year: 2019-10 2. On the date of hearing of the appeal, there was no representation on behalf of the assessee and an application for adjournment was filed by the Ld. A/R (being the CA) of the assessee, seeking adjournment on the ground of other professional engagements. The case was also adjourned earlier on the previous occasion on 27th May, 2025, at the request of the Ld. AR.
The Ld. DR is present in the court, and we decided to proceed with the case on the basis of statement of facts and grounds of appeal on record after hearing the Ld. DR.
Brief facts emerging from records are that the assessee a cooperative agricultural multipurpose society, engaged in providing credit facility to his members. The assessee filed its return of income on 14th October, 2019, declaring NIL taxable income after claiming deduction of Rs. 24.69 lakhs u/s 80P of the Act, 61.
The said return was assessed (processed) u/s 143(1) of the Act by CPC, Bangalore, rejecting the claim of the assessee u/s 80P of the Act amounting to Rs. 24,69,692/-, and raising a tax demand of Rs.11.97 lakhs, vide order dated 01/05/2020, (which according to the assessee was never served) and was ultimately served by post on 11/04/2023, after repeated requests by the assessee. outstanding tax demand the assessee filed rectification application u/s 154 of the Act, on 7th January, 2023 , claiming for the deduction under Chapter VIA , as per return, which was disallowed (without a hearing) vide order dated 9th June, 2023 ( rectification order u/s 154), against which the matter was carried in appeal before the first appellate authority.
The Ld. first appellate authority dismissed the appeal by observing as follows:
“I have carefully considered the relevant and material facts on record, in respect of the first issue raised in this ground of appeal, as brought out in the assessment order and submissions made during appeal proceedings. The appellant is a primary agricultural cooperative society, stated to be engaged in providing credit facilities to its members. The appellant filed its Return of Income (Rol) for the Assessment Year 2019-20, declaring total Income at Rs. Nil, after claiming deduction of Rs. 24,69,692/- under section 80P of the Act. This is an admitted fact that the said return was filed belatedly on 14.10.2019. The "due date" for filing return of income under section 139 for the year under consideration was 30.09.2019. Therefore, while processing the return of income, AO has made prime-facie adjustment under section 143(1)(a) of the Act, and disallowed the claim of deduction for an amount of Rs. 24,69,692/-, presumably on the ground that the return of income was furnished beyond the due date prescribed under section 139(1).”
Now the matter is in appeal before the tribunal on the grounds contained in the memorandum of appeal. From the SOF and grounds of appeal and the materials on record we find that there are several issues which needs verification.
9. Firstly, nothing is mentioned in the rectification order u/s 154 dated 09/06/2023, as to the reasons for disallowance of the claim made by the assessee as 10. Secondly, it is only ascertainable from the order of the Ld CIT(A), that the disallowance of claim for deduction u/s 80P, is presumably on the ground that the return was furnished beyond the due date prescribed under section 139(1), which indicates that the Ld first appellate authority is also not certain as to the reasons for the disallowance , and on assumption of the facts , he has just proceeded on presumption.
11. Thirdly, in the instant case, even if any disallowance has been made u/s 143(1), then no such adjustment is possible, unless an intimation is given to the assessee of such adjustment either in writing or in electric mode, and there is no evidence on record of any such intimation actually been given in the instant case (on the face of the denial of the assessee).
12. Lastly, regarding the issue of belated filing of the return which is filed by the assessee on 14th October, 2019, which is alleged to be beyond the time allowed u/s 139(1) of the Act 61, the claim of the assessee is that the due dates were extended for the Asst year 2019-20, vide CBDT circular for the year under appeal( but no circular number is cited by the assessee in his grounds).
However, we find that the the CBDT circular no: F No. 225/150/2020-ITA-II dated 30th September, 2020, is on the issue of extension, which is reproduced for ready reference: not ascertain as to whether the above board order dated 30/09/2020, covers all returns u/s 139, or only the belated or revised returns u/s sub section (4) and (5)of section 139 of the Act, for the Asst year 2019-20.
As such considering all aspects of the matter , since it is clearly not ascertainable neither from the rectification order u/s 154 nor from the first appeal order ,the actual reasons for disallowance of claim u/s 80P of the Act , in the instant case , we set aside the matter back to the files of the jurisdictional AO, to complete the assessment afresh, after providing reasonable opportunity to the assessee of being heard and after considering all the issues raised by the assessee and to allow the benefit of the CBDT circulars, if the assessee is legally covered by the same .
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 as on 31.07.2025.