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Facts
The assessee, a primary agriculture credit cooperative society, claimed deduction of Rs. 13,72,058/- under section 80P(2) of the Act for interest income earned from credit provided to members. The Assessing Officer denied this deduction in an intimation order under section 143(1) due to delayed filing of the return, a decision later confirmed by the CIT(A).
Held
The Tribunal held that the appeal was against an order passed under section 143(1). The issues could not be sent back to the Assessing Officer for verification as this can only be done in an order under section 143(3). Crucially, the intimation issued under section 143(1) did not include a show cause notice as required by the proviso to section 143. Therefore, the intimation and the adjustment made were deemed unsustainable.
Key Issues
Whether the intimation order passed under section 143(1) disallowing the deduction under section 80P is sustainable without a show cause notice.
Sections Cited
143(1), 143(3), 80P(2), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RATNESH NANDAN SAHAY
Present for: Appellant by : Shri M. K. Chowdhury, AR Respondent by : Shri Khubchand T. Pandya, DR Date of Hearing : 19.03.2025 Date of Pronouncement : 19.03.2025 O R D E R Per Bench : This is an appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), Addl/JCIT(A)-3, Bengaluru [hereinafter referred to as “the Ld. CIT(A)”] dated 10.11.2023 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2019-20.
Shri M. K. Chowdhury, Advocate appeared on behalf of the assessee and Shri Khubchand T. Pandya, DR appeared on behalf of the revenue.
The assessee is a primary agriculture credit cooperative society. The assessee had claimed deduction of Rs.13,72,058/- u/s 80P(2) of the Act on interest income earned from credit provided to members. However, the Assessing Officer denied the said claim of deduction u/s 80P in an intimation order passed u/s 143(1) of the Act dated 13.11.2020 on account of delayed filing of return of income. Later on, the ld. CIT(A) has confirmed the order of the Assessing Officer.
It was submitted by the Ld. AR that Ld. CIT(A) erred in not deleting the disallowance u/s 80P of the Act and urged before the Bench to reverse the action of the Ld. CIT(A).
Per contra, the Ld. Sr. DR vehemently supported the orders of the authorities below and submitted that the issue can be restored to the file of the Assessing Officer for further verification.
We have considered the rival submissions. Obviously, the appeal is against the order passed u/s. 143(1). Consequently, the issues cannot be sent back to the Assessing Officer for verification in so far as the verification can be done in an order u/s. 143(3) of the Act only. Further, a perusal of the intimation issued u/s. 143(1) dated 13.11.2020 shows that no show cause notice has been issued to the assessee as per the requirement of the 1st proviso to section 143 of the Act. This having not been done, we are of the view that the intimation issued u/s. 143(1) is unsustainable and consequently, the adjustment made u/s. 143(1) of the Act is deleted.
In the result, the appeal of the assessee stands allowed.
Order pronounced in the open court 19th March 2025.