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Facts
The assessee, a co-operative credit society, filed its return for AY 2018-19 declaring 'Nil' income after claiming a deduction of Rs. 8,65,106 u/s 80P. The AO denied the deduction, stating the return was not filed within the due date. The CIT(A) confirmed the AO's order, citing the amendment in section 80AC.
Held
The Tribunal noted that the assessee filed its return belatedly and had an application for condonation of delay pending before the PCIT. Citing a previous order on similar facts, the Tribunal restored the matter to the AO.
Key Issues
Whether the deduction u/s 80P is admissible when the return of income was filed beyond the due date, and if an application for condonation of delay is pending.
Sections Cited
80P, 80AC, 139(1), 139(4), 119(2)(b), 250, 143(3)
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
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 20.12.2023 passed u/s.250 of the Income-tax Act, 1961 (“the Act” hereinafter). The relevant assessment year is 2018-2019. 2. The grounds raised read as follows:-
“(a) The order passed by the AO and The Commissioner of Income-tax (Appeals) (Faceless) are bad in law and against the facts of the case. (b) The learned AO and CIT(A) (Faceless) erred in law and on the facts in disallowing the deduction of Rs.8,65,106 claimed u/s.80P(2)(a)(i) of the Income-tax Act, 1961. (c) The learned CIT(A) (Faceless) has not considered the application filed for delay condonation u/s.119(2)(b) of the Income-tax Act applied as per notification of the CBDT.
2 Shri Gangaparameshwari Urban Co-op Credit Society Ltd. (d) That any other relief or reliefs deemed fit in the facts and circumstances of the case may be granted. (e) The appellant craves leave to add, alter or vary the grounds of appeal before or at the time of hearing.”
3. The brief facts of the case are as follows:- The assessee is a co-operative credit society, registered under the Karnataka Co-operative Societies Act, 1959. For the assessment year 2018-2019, the return of income was filed on 30.03.2019 declaring `Nil’ income after claiming deduction u/s.80P of the Act, amounting to Rs.8,65,106. The assessment was completed u/s.143(3) of the Act vide order dated 16.10.2019, 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.
4. 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 in section 80AC of the Act with effect from 01.04.2018, the return of income has to be filed for claiming deduction u/s.80P of the Act within the due prescribed u/s.139(1) of the Act.
5. 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 3 Shri Gangaparameshwari Urban Co-op Credit Society Ltd. application before the relevant authority for condonation of delay in filing the return of income. It was submitted t hat the matter may be remanded to the A.O., to take a decision after the outcome of the delay condonation petition filed before the relevant authority. In this context, the learned AR relied on the order of the Bangalore Bench of the Tribunal in the case of Kuruhinasetty Souharda Credit Co-operative Ltd. v. ITO in ITA No.909/Bang/2023 (order dated 02.01.2024).
The learned Departmental Representative supported the orders of the A.O. and the CIT(A).
We have heard the rival submissions and perused the material on record. In the instant case, assessee has 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 PCIT. 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, 4 Shri Gangaparameshwari Urban Co-op Credit Society Ltd. 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, 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.”
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 (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:
5 Shri Gangaparameshwari Urban Co-op Credit Society Ltd. “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 (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.”
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.
6 Shri Gangaparameshwari Urban Co-op Credit Society Ltd. 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.