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Facts
The assessee, a co-operative society, filed its return of income for AY 2018-19 declaring Nil income after claiming a deduction of Rs. 39,91,004 u/s. 80P. The return was filed after the due date. The Assessing Officer denied the deduction. The CIT(A) confirmed the AO's order, citing an amendment to section 80AC of the Act, which requires filing within the due date for claiming such deductions.
Held
The Tribunal noted that the assessee had not filed the return of income within the due date prescribed u/s. 139(1) of the Act, which is a prerequisite for claiming deduction u/s. 80P, especially after the amendment to Section 80AC w.e.f. 01.04.2018. However, since the assessee had filed an application for condonation of delay under section 119(2)(b) and it was pending, the Tribunal followed a precedent and restored the matter to the AO.
Key Issues
Whether the CIT(A) was justified in confirming the Assessing Officer's order denying the deduction u/s. 80P of the Act for Assessment Year 2018-2019 due to the return being filed after the due date.
Sections Cited
80P, 139(1), 143(3), 80AC, 119(2)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, BANGALORE BENCHES “C”, BANGALORE
Before: Shri George George K, Vice- & Shri Laxmi Prasad Sahu
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES “C”, BANGALORE Before Shri George George K, Vice-President & Shri Laxmi Prasad Sahu, Accountant Member ITA No.203/Bang/2024 : Asst.Year 2018-2019 Shree Channamaleshwara Credit The Income Tax Office Co-operative Society Limited Ward 1 (TPS) v. Opp : Ram Mandir Gulbarga. Main Road Shahabazar Kalaburagi – 585 103 Karnataka PAN : AAETS6333E. (Appellant) (Respondent) Appellant by : Ms.Lakshmi, Advocate Respondent by : Sri.Ganesh R.Gale, Standing Counsel Date of Pronouncement : 15.03.2024 Date of Hearing : 14.03.2024 O R D E R Per George George K, Vice-President : This appeal at the instance of the assessee is directed against CIT(A)’s order dated 28.12.2023 passed u/s.250 of the Income-tax Act, 1961 (“the Act” hereinafter). The relevant assessment year is 2018-2019. 2. The solitary issue that is raised is whether the CIT(A) is justified in confirming the order of the Assessing Officer, wherein the deduction u/s.80P of the Act, amounting to Rs.39,91,004 was denied.
The brief facts of the case are as follows:- The assessee is a co-operative society, registered under the Karnataka Co-operative Societies Act, 1959. For the
2 ITA No.203/Bang/2024 Shree Channamaleshwara Co-op Society Ltd. assessment year 2018-2019, the return of income was filed on 28.03.2019 declaring `Nil’ income after claiming deduction u/s.80P of the Act, amounting to Rs.39,91,004. The assessment was completed u/s.143(3) of the Act vide order dated 23.03.2021, wherein the claim of deduction u/s.80P of the Act was denied. The reason for denying the claim of deduction u/s.80P of the Act was that the assessee had not filed its return of income within the due date prescribed u/s.139(1) of the Act.
Aggrieved by the order of assessment denying the claim of deduction u/s.80P of the Act, the assessee filed appeal before the first appellate authority. The CIT(A)confirmed the view taken by the Assessing Officer. The CIT(A) held that in view of the amendment to section 80AC of the Act with effect from 01.04.2018, the return of income has to be filed within the due prescribed u/s.139(1) of the Act, for claiming deduction u/s.80P of the Act.
Aggrieved by the order of the CIT(A), the assessee has filed the present appeal before the Tribunal. The learned AR submitted that the assessee has filed a delay condonation application before the relevant authority for condonation of delay in filing the return of income. It was submitted that the matter may be restored to the A.O., so t hat a decision can be taken subsequent to the outcome of the assessee’s application for condonation of delay in filing the return of income. In this context, the learned AR relied on the order of the Bangalore Bench of the Tribunal in the case of Kuruhinasetty Souharda
3 ITA No.203/Bang/2024 Shree Channamaleshwara Co-op Society Ltd. Credit Co-operative Ltd. v. ITO in ITA No.909/Bang/2023 (order dated 02.01.2024). 6. The learned Departmental Representative supported the orders of the A.O. and the CIT(A). 7. We have heard the rival submissions and perused the material on record. In the instant case, assessee had not filed the return of income within the due date prescribed u/s.139(1) of the Act. For claiming deduction under section 80P of the Act, the return of income has to be filed within the due date specified under section 139(1) of the Act. In view of the provisions of section 80AC of the Act, (which was introduced w.e.f. 01.04.2018), assessee cannot be allowed deduction under section 80P of the Act. However, assessee has filed application under section 119(2)(b) of the Act for condonation of delay in filing the return of income and the same is pending consideration by the relevant authority. In this context, learned AR had relied on the CBDT’s Circular No.13/2023 dated 26.07.2023. On identical facts, the Bangalore Bench of the Tribunal in the case of Kuruhinasetty Souharda Credit Co-operative Ltd., Vs. ITO (supra) had restored the matter to the files of the AO to take a decision in accordance with law, after assessee’s application for condonation of delay has been disposed off by the relevant authority. The relevant finding of the Bangalore Bench of the Tribunal reads as follows:-
“7. We have heard the rival submissions and perused the material on record. The due date for filing the return of income for Assessment Year 2018-19 under section 139(1) of the Act was 30.09.2018. In the instant case,
4 ITA No.203/Bang/2024 Shree Channamaleshwara Co-op Society Ltd. assessee had filed the return of income under section 139(4) of the Act on 01.03.2019. Therefore, in view of the provisions of section 80AC of the Act, (which was introduced w.e.f. 01.04.2018), assessee cannot be allowed deduction under section 80P of the Act. However, assessee has filed application under section 119(2)(b) of the Act before the CCIT, Bangalore, for condonation of delay in filing the return of income. In this context, learned AR had relied on the CBDT’s Circular No.13/2023 dated 26.07.2023. The relevant portion of the CBDT’s Circular reads as follows:
“5. 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. ….. ….. 7. The CCsIT/DGsIT 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.” 8. On identical facts, the Bangalore Bench of the Tribunal by following ITAT order of the Chennai Bench in the case of Papathiyammal Pitchai Educational Trust in ITA No.18/Chy/2023 (order dated 19.10.2023) had restored the matter to AO to take a decision after the outcome of the condonation petition filed by the assessee. The relevant finding of the Bangalore Bench of the Tribunal in the case of Lord Venkateshwara Ladies Educational and Welfare Trust (supra) reads as follows: “8. We have heard the rival submissions and perused the material on record. From 10 and Form 10B have been filed belatedly by the assessee. However, the delay in filing Form 10 and Form 10B has been condoned by the CIT(E). There is a delay in filing the return of income and assessee has filed application for condonation, which is pending consideration. The limited prayer of the learned AR is to remand this matter to the AO and direct him to take a decision in matter after PCCIT(E), Delhi, had disposed off the assessee’s application for condonation of delay in filing the return of income. On identical situation, the Chennai Bench of the Tribunal in the case of ITO (E), Trichy Vs. Ms/. Papathiyammal Pitchai Education Trust
5 ITA No.203/Bang/2024 Shree Channamaleshwara Co-op Society Ltd. (supra), had restored the matter to AO and directed the AO to take a decision after the outcome of the condonation petition filed by the assessee. The relevant finding of the Chennai Bench of the Tribunal reads as follows: “5. We are of the considered opinion that though the assessee has valid registration u/s 12AA, still, it has to comply with the mandatory requirements of law to lay claim on impugned deduction. The law mandates the assessee to file return of income within due date as prescribed u/s 139(1) along with Form No.10B so as to lay claim on this deduction. Certainly, the assessee has defaulted in the same. Now, Ld. AR has submitted evidences of seeking relevant condonation from appropriate authorities. Therefore, considering the same, we set aside the order of Ld. CIT(A) and restore the appeal back to the file of Ld. CIT(A) for fresh adjudication in the light of condonation petitions filed by the assessee. All the issues are kept open.” 9. Taking into consideration the prayer of the learned AR and the order of the Chennai Bench of the Tribunal, the matter is restored to the files of the AO. The AO is directed to take a decision in accordance with law after the assessee’s application for condonation of delay in filing the return of income has been disposed off by the relevant authority. It is ordered accordingly.” 9. Taking into consideration the prayer of the learned AR and the order of the Bangalore Bench of the Tribunal in the case of Lord Venkateshwara Ladies Educational and Welfare Trust (supra), the matter is restored to the files of the AO. The AO is directed to take a decision in accordance with law after the assessee’s application for condonation of delay in filing the return of income belatedly has been disposed off by the relevant authority. It is ordered accordingly.” 8. Taking into consideration the prayer of the learned AR and the order of the Bangalore Bench of the Tribunal in the case of Kuruhinasetty Souharda Credit Co-operative Ltd., Vs. ITO (supra), we restore the matter to the files of the AO. The AO is directed to take a decision in accordance with law after the assessee’s application for condonation of delay has been disposed off by the relevant authority. It is ordered accordingly.
6 ITA No.203/Bang/2024 Shree Channamaleshwara Co-op Society Ltd. 9. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 15th day of March, 2024. Sd/- Sd/- (Laxmi Prasad Sahu) (George George K) ACCOUNTANT MEMBER VICE-PRESIDENT Bangalore; Dated : 15th March, 2024. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT(A), Bengaluru. 4. The Pr.CIT, Bengaluru. 5. The DR, ITAT, Bengaluru. 6. Guard File. Asst.Registrar/ITAT, Bangalore