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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI GEORGE GEORGE K & SHRI LAXMI PRASAD SAHU
Per George George K, Vice President:
This appeal at the instance of the assessee is directed against CIT(A)’s order dated 22.09.2023, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2018-19.
The solitary issue that is raised is whether CIT(A) is justified in confirming the disallowance of claim of deduction under section 80P(2) of the Act amounting to Rs.2,69,95,079/-.
Brief facts of the case are as follows:
Assessee is a credit co-operative society. Assessee is collecting deposits from its members and in turn provide credit facilities as loans to its members under the concept of mutuality. For the Assessment Year 2018-19, return of income was filed under section 139(4) of the Act on 01.03.2019 declaring Nil income after claiming deduction under section 80P of the Act amounting to Rs.2,69,95,079/-. The assessment was completed vide order dated 21.04.2021 under section 143(3) r.w.s. 144B of the Act. In the assessment completed, the claim of deduction under section 80P was denied for the reason that assessee had not filed its return of income within the due date specified under section 139(1) of the Act (as mandated under section 80AC of the Act w.e.f. 01.04.2018).
Aggrieved by assessment completed, assessee preferred appeal before the CIT(A). The CIT(A) confirmed the view taken by the AO in denying the claim of deduction under section 80P(2)(a)(i) of the Act.
Aggrieved by the order of the CIT(A), assessee has filed the present appeal before the Tribunal. Assessee has filed a Paper Book comprising of 66 pages enclosing therein copy of the ITR, computation of income for Assessment Year 2018-19, audited financial statement for the year ended 31.03.2018, written submissions before the CIT(A), CBDT circular No.13/2023 dated 26.07.2023, copy of the assessee’s application filed under section 119(2)(b) of the Act, before the CCIT, etc. The learned AR submitted that assessee has filed a petition for condoning the delay in filing the return before the CCIT, Bangalore, and the same is pending adjudication. Hence, it was submitted that the mater may be restored to the AO so that a decision 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 Lord Venkateshwara Ladies Educational and Welfare Trust in (order dated 01.12.2023) and the CBDT’s Circular No.13/2023.
The learned DR supported the orders of the income-tax authorities.
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:
“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.
In the result, appeal filed by the assessee is allowed for statistical purposes.