OMMI SANDEEP,VIZIANAGARAM vs. INCOME TAX OFFICER, WARD-1, VIZIANAGARAM

The present appeal is filed by the assessee against the impugned order dated 31.10.2025, passed under section 250 of the Income Tax Act, 1961 (in short ‘Act’) by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld.CIT(A)”], for the A.Y. 2017-18.

On perusal of the contents of the affidavit filed by the assessee as well as the submission of the Ld. AR, we find that the assessee is prevented by a reasonable and sufficient cause in filing the appeal beyond the prescribed time limit with a delay of 24 days. Therefore, we hereby condone the delay of 24 days

The only issue to be adjudicated in the above cited appeal is whether the Appellant Cooperative Society is entitled for deduction under section 80P(2)(a)(i) of the Act, when the return was not filed under section 139(1).

Aggrieved, by the disallowance claimed by the appellant-society under section 80P(2)(a)(i) of the Act, assessee filed an appeal before the Ld. CIT(A). the order of the Ld. CIT(A) shows that despite giving five opportunities, the Page No. 4 The Chinnampeta Primary Agricultural Cooperative Credit Society Limited appellant-society did not furnish the required information and hence it was adjudicated that the appellant-society is not entitled for deduction under section 80P of the Act as no return of income was filed claiming the deduction in terms of section 80A(5) of the Act. It was also held that section 80AC of the Act is not applicable in this case and hence the appeal of the appellant was dismissed.

Further, aggrieved by the orders of the Ld. AO and Ld. CIT(A), an appeal was filed before ITAT. During the hearing proceedings before the ITAT, the Ld.AR of the appellant has filed the paper book and also relied on certain case laws. From the written submissions filed by the Ld.AR of the appellant, it is observed that for the A.Y. 2017-18, the appellant is entitled for deduction under section 80P(2)(a)(i) of the Act even though return was filed with delay and beyond the dates prescribed under section 139(1) of the Act. In continuation of the argument the Ld.AR relied on the decision of the Co-ordinate Bench decision in the case of The Chandarlapdu Large Size Cooperative Credit Society Limited v. ITO in dated 12.06.2025. In this case, the assessee has filed the return of income belatedly and claimed deduction under section 80P of the Act and the same was allowed by the Co-ordinate Bench, even though, the return was filed beyond the dates specified under section 139(1) of the Act.

Per contra, Ld. Departmental Representative [hereinafter in short “Ld. DR”] relied on the following decisions:

Ld. DR has argued and also in the written submissions it was mentioned that the deduction under section 80P of the Act can be allowed only when the return of income is filed in terms of section 80A(5) of the Act which mandates that no deduction under section Chapter VIA including section 80P shall be allowed unless the deduction claimed is in the return of income filed under the Act. If there is no valid claim in the return, then the same would disentitle the appellant from availing the deduction. The written submission of the Ld. DR are reproduced for clarity: - “1. Legal Framework Section 80A(5) of the Income-tax Act, 1961 mandates that no deduction under Chapter VI-A, including Section 80P, shall be allowed unless it is claimed in a return of income filed under the Act. Thus, failure to make a valid claim in the return disentitles the assessee from availing the deduction.

Judicial Precedents 1. Nileshwar Range Kallu Chethu Vyavasava Thozhilali Sahakarana Sangham v. CIT (2023) 459 ITR 730/152 taxmann.com 347 / 333 CTR 655(Ker)(HC) Hon ble High court Held that a reading of section 80A(5) and section 80AC of the Income-tax Act, 1961, as they stood prior to April 1, 2018, would reveal that the statutory scheme under the Act was to admit only such claims for deduction under section 80P of the Act as were made by the assessee in Page No. 6 The Chinnampeta Primary Agricultural Cooperative Credit Society Limited a return of income filed by him. That return could be under section 139(1), (4), 142(1) or 148, and to be valid. had to be filed within the due date contemplated under those provisions. Under section 80A(5), the claim for deduction under section 80P could be made by an assessee in a return filed within the time prescribed for filing such returns under any of the above provisions. The amendment to section 80AC with effect from April 1, 2018, however, mandated that for an assessee to get a deduction under section 8OP of the Income-tax Act, it had to furnish a return of his income for such assessment year on or before the due date specified in section 139(1) of the Income-tax Act. In other words, after April 1, 2018, even if the assessee made its claim for deduction under section 80P in a return filed within time under section 139(4), 142(1) or 148, it would not be allowed the deduction, unless the return in question was filed within the due date prescribed under section 139(1). Thus, it is clear that the statutory scheme permits the allowance of a deduction under section SOP of the Act only if it is made in a return recognised as such under the Act, and after April 1, 2018, only if that return is one filed within the time prescribed under section 139(1) of the Act. On the facts as the returns in these cases, for the assessment years 2009-10 and 2010-11, were admittedly filed after the dates prescribed under section 139(1) and (4) or in the notices issued under section 142(1) and section 148, the returns were nonest and could not have been acted upon by the Assessing Officer even though they were filed before the completion of the assessment. (AY.2009-10, 2010-11) 2. Decision of Hon'ble ITAT, Visakhapatnam in the case of Maruthi Primary Agricultural Cooperative Credit Society Ltd. Vs Income Tax Officer, Ward-3(5), Vijayawada, Vide for the A.Y. 2017-18.

While concluding, the Ld. DR has argued that the assessee has not filed the return at all before the completion of the assessment and thereby failed to comply

Heard rival submissions and after perusal of the written submissions and case laws relied on by the both the parties, the Bench decides to confirm the disallowance made by the Ld. AO for the following reasons:

In the impugned case, it is an admitted fact that there was no return of income filed by the appellant-society before completion of the assessment. Despite the notice issued to the appellant-society, no valid return of income was Page No. 8 The Chinnampeta Primary Agricultural Cooperative Credit Society Limited filed by the appellant before the completion of assessment. Prior to the Amendment of 01.04.2018; the assessee is entitled to claim the deduction if a valid return is filed with the time prescribed under section 139(4) / 142(1) /148 of the Act. After 01.04.2018 amendment; in order to claim the deduction, the assessee should file the return of income within the time prescribed under section 139(1) of the Act. In the present case, the appellant-society did not file the return of income at all before the completion of assessment despite the notices were issued. In view of the same, Hon’ble Kerala High Court in the case of Nileshwar Range Kallu Chethu Vyavasaya Thozhilali Sahaskarana Sangham v. CIT (supra) and two decisions (supra) of Co-ordinate Bench have adjudicated that prior to the A.Y. 2018-19, there should be a valid return of income to claim the deduction under section 80P of the Act and in the absence of the same the appellant-society is not entitled for deduction claimed.

On the same issue, for the A.Y. 2017-18, the Co-ordinate Bench in the case of Narasimha Rao Palem Primary Agricultural Credit Society Ltd. v. ITO (supra) has denied the benefit under section 80P of the Act even when the return of income was filed beyond the due dates mentioned under section 139(1) / 139(4) of the Act. The operative portion of Narasimha Rao Palem Primary Agricultural Credit Society Ltd. v. ITO (supra) is reproduced for the sake of clarity.

As per sub-section (5) of section 80A of the Act it is imperative to the assessee to make a claim in its valid return of income for any deduction under any provisions of the Chapter under the heading “Cdeduction in respect of certain incomes”. Since the assessee has failed to file its valid return of income within the prescribed time for the relevant assessment year claiming the deduction prima facie no deduction is permissible under the Act. Similarly, the assessee has not filed its valid return of income either U/s. 139(1) or U/s. 139(4) of the Act as observed by the Ld. AO as well as Ld. CIT(A)-NFAC and therefore, the Ld. AO held that the assessee failed to make the claim of deduction U/s. 80P(2)(a)(i) of the Act. I cannot appreciate the argument of the Ld. AR that the provisions of section 80AC are not applicable to the case of the assessee as the substitution came into effect from 01/04/2018 ie., for the AY 2018-19 on wards because even after the substitution by Finance Act, 2018, to claim the deduction U/s. 80P(2)(a)(i) of the Act, the assessee has to file a Page No. 10 The Chinnampeta Primary Agricultural Cooperative Credit Society Limited valid return of income within the stipulated time as per the provisions of section 139 of the Act which is missing in the instant case. Further, on perusal of the case law relied on by the Ld. AR in the case of Saidatar Co-operative Credit Society Limited (supra), I find that there is no discussion about the applicability of the provisions of section 80A(5) which goes to the root of the matter. Further, on identical issue, the Division Bench of this Tribunal in the case of The Vatsavai Primary Agricultural Cooperative Credit Society Limited vs. ITO in (AY 2017-18) has observed as under: “6. We have heard both the parties perused the material available on record and the orders of the authorities below. Admitted facts are that the assessee has not filed its return of income for the impugned assessment year but has submitted trading account, P & L Account, income and expenditure account and balance sheet as on 31/3/2017 during the assessment proceedings. Section 80A(5) of the Act is extracted below for reference: “Sec. 80A (5) Where the assessee fails to make a claim in his return of income for any deduction under section 10A or section 10AA or section 10B or section 10BA or under any provision of this Chapter under the heading "C.—Deductions in respect of certain incomes", no deduction shall be allowed to him thereunder.’;”

As per sub-section (5) of section 80A of the Act it is imperative to the assessee to make a claim in its return of income for any deduction under any provisions of the Chapter under the heading “C-deduction in respect of certain incomes”. Since the assessee has failed to file its return of income claiming the deduction prima facie no deduction is permissible under the Act. Similarly, the assessee has filed return of income manually on 5/3/2022 which was sent by speed post to CPC, Bangalore on 15/3/2022. It is noticed from the submissions made by the Ld.AR that the return has been filed U/s. 139(4) of the Act. As per section 139(4) of the Act “Any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous year at any time before three months prior to the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.” It is noted from the paper book page no. 21 the assessee has filed its return of income for the AY 2017-18on 5/3/2022 u/s. 139(4) of the Act. We are of the view that since the return of income has been filed after completion of the assessment, the return should have been held as invalid and hence the claim made by the assessee for deduction U/s. 80P(2)(a)(i) cannot be held as an admissible deduction under the Act. The decision of the Hon’ble

Respectfully following the decision of this Bench on identical facts and circumstances of the case, we have no hesitation to come to a conclusion that the Ld. Revenue Authorities have rightly held that the claim of the assessee for deduction U/s. 80P(2)(a)(i) of the Act cannot be held as an admissible deduction as per the provisions of the Act. Accordingly, we are inclined to uphold the orders of the Ld. Revenue Authorities thereby dismissing the grounds raised by the assessee.”

From the above discussion, it is observed that if the return of income was filed beyond the due dates mentioned under section 139(1) / 139(4) of the Act still the assessee was not entitled for deduction under section 80P of the Act for the A.Y. 2017-18 also. In the impugned case, the appellant-society did not file the return of income at all despite the notices under section 142(1) of the Act were issued to the appellant. As discussed above, it is mandatory to file the return of income to claim any deduction including of deduction under section 80P of the Act. It is an admitted fact that there was no return of income before completion of the assessment and hence the denial of the deduction under section Page No. 12 The Chinnampeta Primary Agricultural Cooperative Credit Society Limited 80P of the Act by the Revenue is held valid and the deduction under section 80P of the Act cannot be allowed under the above circumstances.

In the result, appeal filed by the assessee is dismissed.