Loading judgment…
Facts
The assessee, a co-operative society, did not file its return of income for AY 2017-18 despite having made significant deposits. The Assessing Officer made an addition of Rs. 25,56,407/- representing the profit shown in the P&L account. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal noted that Section 80A(5) and 80AC of the Income Tax Act do not necessarily bar a deduction under Section 80P if a return is not filed, unlike other Chapter VI-A deductions. Following precedent, the Tribunal found it appropriate to remand the issue for fresh examination.
Key Issues
Whether the assessee is eligible for deduction under Section 80P despite not filing the return of income, and whether the grounds for ex-parte order by NFAC are valid.
Sections Cited
80P(2)(a)(i), 139, 142(1), 80A(5), 80AC
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH, AHMEDABAD
Before: Ms. Suchitra Kamble
आदेश/ORDER This is an appeal filed against the order dated 30-11- 2023 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2017-18.
The grounds of appeal are as under:- “(1) That on facts, and in law, the learned NFAC has grievously in not providing sufficient and reasonable opportunity of hearing, and in deciding the appeal vide ex-parte order. (2) That on facts, and in law, the learned NFAC has grievously erred in confirming the addition of Rs.25,56,407- made in respect of profit as per the P & L account, whereas, it ought to have been held that the same is eligible for deduction u/s 80P(2) (a) (i) of the Act, it being the interest received from members of the appellant co-operative credit society. (3) The appellant craves leave to add, alter, amend any ground of appeal.”
1. 1. 3. The assessee made cash/cheque/transfer deposits of Rs. 4,08,86,323/- but did not file return of income for assessment year 2017-18. Notice u/s. 142(1) of the Act dated 12-03-2018 was issued to the assessee. The assessee did not comply with the terms of the said notices. Subsequently, the assessee responded the notices and furnished details/evidences vide letter dated 24- 09-2019. The assessee is a co-operative society stated to be provided certain services to its members such as cash credit facilities. The assessee has shown net profit of Rs. 25,56,407/- but since the same required to be declared as profit by filing the return u/s. 139 of the Act which assessee fails to do so. The Assessing Officer made addition of Rs. 25,56,407/- of the Act.
Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The ld. A.R. submitted that there is a delay of 681 days in filing the present appeal for which the assessee has filed the detailed affidavit. After going through the said affidavit, it appears that the reasons for delay is genuine, hence the delay is condoned.
The ld. A.R. submitted that the assessee otherwise is eligible for exemption of profit as per section 80P as the assessee is a co-operative society. Merely not filing the return cannot be the criteria for denying the said exemption to the assessee.
The ld. D.R. relied upon the assessment order and the order of the CIT(A).
I have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee is eligible for exemption u/s. 80P if the assessee has filed the return of income u/s. 139 of the Act. As per the decision of the Tribunal in case of M/s. Parthamika Krishi Pattina Sahakara Sangha Ltd. vs. ITO order dated 13-06-2022, the Tribunal has remanded back the issues to the file of the Assessing Officer to determine the eligibility to claim deduction u/s. 80P of the Act. The finding of the said decision is as follows: “8. I have given a careful consideration to the rival submissions. I agree with the submissions of the learned Counsel for the assessee that section 80A(5) of the Act is applicable only when a return of income is filed by an assessee and a deduction under Chapter VI "A" of the Act, is not claimed in such return of income. It will not apply to a case where no return of income is filed. The provisions of section 80AC of the Act, as we have already seen, contemplates denial of deduction in respect of certain provisions of Chapter VI "A" of the Act, if a return of income is not filed by an assessee. Those provisions, as rightly contended by the learned Counsel for the assessee, do not apply to the claim for deduction under section 80P of the Act. Therefore, the Revenue authorities were not justified in not entertaining the claim of the assessee for deduction under section 80P of the Act as made by the assessee. Since neither the AO nor the CIT(A) have examined the other conditions for allowing deduction under section 80P of the Act, I deem it fit and proper to remand the issue of the assessee's eligibility to claim deduction under section 80P of the Act, in the sense with regard to the quantum of deduction and also with regard to the other conditions for allowing deduction under section 80P of the Act, for examining afresh by the AO. I therefore allow the appeal of the assessee for statistical purposes.”
Thus, in the light of the said directions in the present assessee’s also, we deem it fit and appropriate to remand back the issue of eligibility of the assessee to claim deduction u/s. 80P of the Act to be examined afresh by the Assessing Officer after taking cognizance of the conditions allowable for deduction u/s. 80P of the Act.
In the result, the appeal of the assessee is party allowed for statistical purposes.