THIKARIYA GRAM SEWA SAHKARI SAMITI LTD ,THIKARIYA vs. AO CPCITO WARD SIKAR, SIKAR

आयकरउअपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR JhlanhixkslkbZ]U;kf;dlnL; ,oaJhjkBksMdeys'kt;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 772 & 773/JP/2023 fu/kZkj.k o"kZ@Assessment Year : 2018-19 & 2019-202 Thikariya Gram Sewa Sahakari Samiti Ltd. cuke The ITO Vs. Village: Thikariya, Malikpur, Ward- Sikar Sikar – 332 411 (Raj) Sikar LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AACAT 7728 B vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Shrawan Kumar Gupta Advocate jktLo dh vksj ls@ Revenue by: Mrs. Monisha Choudhary, Addl. CIT lquokbZ dh rkjh[k@ Date of Hearing : 17/01/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 27 /03/2024 vkns'k@ ORDER PER: SANDEEP GOSAIN, JM Both these appeals have been filed by the assessee against two different orders of the ld. CIT(A) dated 17-10-2023, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment years 2018-19 & 2019-20 respectively wherein the assessee has raised the following grounds of appeal in respective appeals.

2 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD ITA No.772/JP/23 A.Y. 2018-19 1.1 The impugned order u/s 143(1) of the I.T. Act, 1961 dated 05.03.2020 is illegal, bad in law, barred by limitation, without jurisdiction, without approval/satisfaction from the proper or competent authority, against the principle of natural justice and various other reasons or and further contrary to the real facts of the case hence the same may kindly be quashed.

1.2. The ld. CIT(A) has grossly erred in law as well as on the facts of the case in passing the Ex parte order and confirming the order of the ld. AO without providing adequate and reasonable opportunity of being heard and not considering the material on record in the gross breach of natural justice. Hence the same entire addition may kindly be deleted and the assessment order may kindly be quashed. 3. Rs.3,13,541/-: The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs.3,13,541/- made by the ld. AO by disallowing the deduction u/s 80P which was made without any basis and also erred in not considering the vital facts and material available on record in their true perspective and sense. Hence the addition so made by the ld. AO and confirmed by the ld. CIT(A) is also being contrary to the real facts of the case and not according to the provision of law, hence the same is illegal, bad in law, against the principle of natural justice the same may kindly be deleted in full. 4.The ld AO has grossly erred in law as well as on the facts of the case in charging the interest u/s 234A, 234B & 234C of the Act. The interest so charged is being totally contrary to the provisions of law and on facts of the case and hence same may kindly be deleted in full. ITA no. 773/JP/23 2019-20 1.1 The impugned order u/s 143(1) of the I.T. Act, 1961 dated 10.03.2021 is illegal, bad in law, barred by limitation, without jurisdiction, without approval/satisfaction from the proper or competent authority, against the principle of natural justice and various other reasons or and further contrary to the real facts of the case hence the same may kindly be quashed.

1.2. The ld. CIT(A) has grossly erred in law as well as on the facts of the case in passing the Ex parte order and confirming the order of the ld. AO without providing adequate and reasonable opportunity of being heard and not considering the material on record in the gross breach of natural justice. Hence the same entire addition may kindly be deleted and the assessment order may kindly be quashed.

3 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD 3. Rs.8,20,144/-: The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs.8,20,144/- made by the ld. AO by disallowing the deduction u/s 80P which was made without any basis and also erred in not considering the vital facts and material available on record in their true perspective and sense. Hence the addition so made by the ld. AO and confirmed by the ld. CIT(A) is also being contrary to the real facts of the case and not according to the provision of law, hence the same is illegal, bad in law, against the principle of natural justice the same may kindly be deleted in full. 4. The ld AO has grossly erred in law as well as on the facts of the case in charging the interest u/s 234A, 234B & 234C of the Act. The interest so charged is being totally contrary to the provisions of law and on facts of the case and hence same may kindly be deleted in full. 2.1 First of all, we take up the appeal of the assessee in ITA No.772/JP/2023 for the assessment year 2018-19 for adjudication. Apropos Ground No. 1 & 2, the facts as emerges from the order of the ld CIT(A) are as under:- ‘’6. Decision 6.1 The statement of facts grounds of appeal, and the order appealed against, written submissions explanations have been thoroughly examined. The central issue for adjudication among all the grounds of appeal raised pertains to the sole issue of denying the deduction claimed as per section 80P of the Act while processing the return of Income under section 143(1) of the Act. Therefore, all grounds of appeal are being clubbed and adjudicated together. 6.2 It has been observed that the AO disallowed the deduction claimed by the appellant under section 80P of the Act because the tax return was filed after the due date specified in section 139(1) of the Act. According to Section 139(1) of the Act, the due date for filing the return in the case of the appellant for the Assessment Year 2018-19 was September 30, 2018, and it was further extended to October 31, 2018 by CBDT's notification no 225/358/2018/ITA-II dated 08-10-2018. The term 'due date' is explicitly defined within Section 139(1) itself, leaving no room for ambiguity or dispute regarding the filing deadline.

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6.3 In the instant case the Return was filed on 23.12.2018 u/s 139(4) of the Act. It is essential to clarify here that while returns filed in accordance with the various sections of the Act are deemed valid returns, the key requirement for granting the deduction under Part C of Chapter VIA of the Act is defined in this chapter itself. As per section 80AC (ii) of the Act. the retum must be filed within the due date specified in Section 139(1) of the Act for claiming any deduction under any provision of Chapter VIA under the heading "C-Deduction in respect of certain incomes The claim for deduction under Section 80P falls under Part C of Chapter VIA of the Act. 6.4 Furthermore, it is crucial to emphasize that the appellant's case must be evaluated based on the provisions applicable to the Assessment Year 2018-19 exclusively. In this context, it is pertinent to refer to section 143(1) of the Act for the relevant Assessment Year i.e. 2018-19, which reads as follows: ‘’143 (1) Where return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner namely (a) The total income or loss shall be computed after making the following adjustments, namely: (i)Any arithmetical error in the return (ii) An incorrect claim, if such incorrect claim is apparent from any information in the return; (iii) Disallowance of loss claimed if the return of the previous year for which the set- off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139; (iv) Disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return;

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(v) Disallowance of deduction claimed under sections 10AA, 80-IA, 80-1AB, 80-1B, 80-IC, 80-ID, or section 80-IE if the return is furnished beyond the due date specified under sub- section (1) of section 139, or (vi) Addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode Provided further that the response received from the assessee if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made.’’ 6.5 The processing of the return under Section 143(1)(a) of the Act goes beyond mere formalities, it encompasses the authority to effectuate adjustments predicated on errors glaringly evident within the income tax return Section 143(1)(a)(ii) states that an incorrect claim, if such incorrect claim is apparent from any information in the return, may also be adjusted before processing the return. A deduction claim would be considered incorrect if any information within the return renders it so, such as the date of the filing of the Return. In this regard, reliance is placed on the order of the Hon'ble High Court, Madras in the case of Veerappampalayam Primary Agricultural Cooperative Credit Society Limited Vs DCIT (07.04.2021), in which the Hon'ble Court held that the belated filing of a return amounts to an "incorrect claim" under section 143(1)(a):- 'The scope of an 'intimation' under Section 143 (1) (a) of the Act, extends to the making of adjustments based upon errors apparent from the return of income and patent from the record. Thus to say that the scope of 'incorrect claim' should be circumscribed and restricted by the Explanation which employs

6 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD the term 'entry' would, in my view, not be correct and the provision must be given full and unfettered play. The explanation cannot curtail or restrict the main thrust or scope of the provision and due weightage as well as meaning has to be attributed to the purposes of Section 143(1)(a) of the Act. The provisions of Section 80AC(ii) make it clear that any deduction that is claimed under Part C of Chapter VIA would be admissible only if the return of income in that case were filed within the prescribed due date. Thus no claim under any of the provisions of Part C of Chapter VIA would be admissible in the case of a belated return. There is no dispute on this position. The date of filing of a return of income would be apparent on the face of return and upon a perusal thereof, it would be clear as to whether the return is a valid return, having been filed within the statutory time limit, or a belated one. This is mechanical exercise and one that can be carried out by the CPC, very much within the scope of Section 143 (1) (a) (ii) of the Act. 6.6 The provisions laid out in Section 80AC(ii), which came into effect on April 1, 2018, leave no room for ambiguity. They emphatically establish that any deduction sought under Part C of Chapter VIA will be deemed admissible exclusively if the income tax return for that particular case is filed within the prescribed due date. Consequently, no claims under any of the provisions in Part C of Chapter VIA will be entertained in the instance of a belated return. 6.7 The date of income tax return submission is conspicuously evident on the return document itself. Upon a thorough review, it becomes abundantly clear whether the return conforms to the stipulated statutory time limit or falls into the category of belated submissions. This process is inherently mechanical and falls squarely within the purview of Section 143(1)(a)(ii) of the Act. The Central Processing Centre (CPC) is well-equipped to efficiently carry out this task. 6.8 In the present case, the assessment year in question is AY 2018-19, and the appellant filed the income tax return on

7 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD December 23, 2018, which is beyond the due date of filing the return, i.e., September 30, 2018, as per Section 139(1), and also beyond the extended deadline of October 31, 2018, allowed for that relevant year. In accordance with the provisions of Section 80AC(ii) of the Act, which apply to AYs 2018-19 and onwards, the appellant is clearly ineligible to claim the exemption under section 80P of the Act. 6.9 Hence, there is no flaw in the AO's decision to disallow the appellant's deduction claim under section 80P while processing the return under section 143(1) of the Act. Consequently, all the raised appeal grounds are rejected. 7. As a result, the appeal is hereby dismissed.’’ 2.2 During the course of hearing, the ld. AR of the assessee prayed for deletion of addition by submitting following written submission. “1. No denial of exemption u/s 10(23C)(iiiad) for the reason not filling the ITR u/s 139(1): 1. It is submitted that ld. AO has disallowed the exemption on the ground that the assessee has not filed its ROI u/s 139(1). The reason of not filing of the same are that as the assessee is a Govt. Cooperative Society and the accounts could not prepared the timely, also from March 2020 to till return filling there was Covid-19 Pandemic period it is also facts assesee’s case falls u/s 80P admittedly. In the provisions of section 80P no where it has been held or provided that if the assessee or its income/receipts comes under the provision of Sec. 80P, the exemption shall not be allowed if assessee has not filled the ITR u/s 139, 2. Directly Covered Matter: Under the same facts and circumstances In the case of Lunidhar Seva Sahkari Mandali Ltd. vs. ASSESSING OFFICER (CPC) ITA No. 202/Rjt/2022 February 20, 2023 (2023) 67 CCH 0398 Rajkot Trib (2023) 200 ITD 0014 (Rajkot-Trib) Asst. Year 2019-20. Held as under:

8 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD “7. We have heard the rival contentions and perused the material on record. In the instant facts, admittedly the assessee did not file return of income within the time permissible under section 139(1) of the Act. However, the assessee filed its return of income belatedly on 30-11- 2020 and claimed deduction of Rs. 2,22,704/- under section 80P of the Act. The issue for consideration before us is that whether once the return of income is filed beyond the prescribed date under section 139(1) of the Act, can the deduction under section 80P of the Act be denied to the assessee, by way of adjustment under section 143(1) of the Act. On going through the statutory provisions, we observe that 80AC of the Act provides that no such deduction under section 80P of the Act shall be allowed to an assessee unless he furnishes a return of his income on or before the due date specified under section 139(1) w.e.f. assessment year 2018-19 onwards. However, section 143(1)(a)(v) of the Act provides that disallowance of deduction claimed under any of the provisions of Chapter VI-A under the heading “C.— Deductions in respect of certain incomes” (which includes deduction under section 80P of the Act), can be made if the return is furnished beyond the due date specified under sub-section (1) of section 139. This amendment has been introduced w.e.f. 1-4-2021. Accordingly, the above amendment would not apply to the impugned assessment year. Further, section 143(1)(ii) of the Act permits adjustment in case of an incorrect claim, if such incorrect claim is apparent from any information in the return. However, Explanation to the aforesaid section specifies the following cases where the claim made in the return of income can be said to be “incorrect” for the purposes of this sub- section: (a) “an incorrect claim apparent from any information in the return” shall mean a claim, on the basis of an entry, in the return,— (i) of an item, which is inconsistent with another entry of the same or some other item in such return; (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction

9 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD 7.1 A joint reading of the above provisions makes it evident that the claim of deduction under section 80P of the Act cannot be allowed the assessee, if the assessee does not file its return of income within the due date stipulated under section 139(1) of the Act w.e.f. assessment year 2018-19 onwards. However, we also note that amendment has been introduced in section 143(1)(a)(v) of the Act to provide that the claim of deduction under section 80P of the Act can be denied to the assessee, in case the assessee does not file its return of income within the time prescribed under section 139(1) of the Act with effect from 01-04-2021 and does not apply to the impugned assessment year i.e. assessment year 2019-20 relevant to financial year 2018-19. Accordingly, in our considered view, denial of claim under section 80P of the Act would not come within the purview of prima facie adjustment under section 143(1)(a)(v) of the Act, for the simple reason that the section was not in force during the period under consideration i.e. assessment year 2019-20. 7.2 The second issue for consideration is that whether the case of the assessee would fall within the purview of prima facie adjustment under section 143(1)(a)(ii)(an incorrect claim, if such incorrect claim is apparent from any information in the return). In our view, the scope of the adjustments that can be made under the said provision has been elaborated in the Explanation to the aforesaid section, which does not include denial of deduction claimed by the assessee in case the assessee does not furnish its return of income within the date stipulated under section 139(1) of the Act. The Explanation to the said section specifically provides for cases/instances when the claim made by the assessee could be said to be “incorrect”. Therefore, in our considered view, the case of the assessee would also not fall within the purview of prima facie adjustment under section 143(1)(a)(ii)(an incorrect claim, if such incorrect claim is apparent from any information in the return). 7.3 We note that in the case of Chirakkal Service Co-Operative Bank Ltd. Kannur v. CIT 2016] 68 taxmann.com 298 (Kerala), the Kerala High Court held that a return filed by assessee beyond period stipulated under section 139(1) or 139(4) or under section 142(1) or section 148 can also be accepted and acted upon for entertaining claim raised under section 80P provided further proceedings in relation to such assessments are pending in statutory hierarchy of adjudication in terms of provisions of Act. In the case of ASR Engg. & Projects Ltd. [2019] 111 taxmann.com 49 (Hyderabad- Trib.), the ITAT held that to be eligible to make claim

10 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD under section 80-IA or any other section of Chapter VI A, assessee should have filed return of income under section 139(1) and even if it did not make claim for deduction in original return and subsequently file revised return making such claim, its claim for deduction under section 80-IA is maintainable. Therefore, where assessee had filed return under section 139(1), it was entitled to claim deduction under section 80-IA even if such claim was not made in original return but subsequently in revised return filed in response to notice issued under section 153A. In the case of Lanjani Co-Operative Agri Service Society Ltd. (CPC) v. DCIT [2023] 146 taxmann.com 468 (Chandigarh- Trib.), the ITAT held that the enabling provisions of sub- clause (v) of section 143(1) providing for disallowance of deduction under section 80P due to late filing of return having been introduced by Finance Act, 2021 effective from 1-4-2021, disallowance of deduction claimed under section 80P during relevant years 2018-19 and 2019-20 on grounds of late filing of return was unjustified 7.4 We note that the instant case, there was a delay in filing the return of income by the assessee for the assessment year 2019-20 and return of income was filed within due date permissible u/s 139(4) of the Act, in which the claim for deduction u/s 80P of the Act was made. Therefore, looking into the totality of facts, we are of the view that claim of deduction u/s 80P of the Act cannot be denied to the assessee only on the basis that the assessee did not file return of income its return of income within due date u/s 139(1) of the Act, in light of the discussion and judicial precedents highlighted above. 8. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 22-02-2023.” Also refer Ambaradi Seva Sahkari Mandali Ltd. vs. DEPUTY COMMISSIONER OF INCOME TAX ITAT RAJKOT SUCHITRA KAMBLE, JM & WASEEM AHMED, AM.ITA No. 186/RJT/2022, 197/RJT/2022, 203/RJT/2022 February 10, 2023(2023) 67 CCH 0104 RajkotTrib 3. Covered by the CBDT Circular No. 13/2023 dt. 26.07.2023 copy is enclosed: The CBDT has directed to allow the condonation of delay where claim has been made u/s 80P. As the assessment has been completed and when the CBDT itself has provided power to the ld. PCIT to condone the delay, then your honoe is also having the power being higher forum then to PCIT.

11 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD Also refer Jila Alp Sankhyak Bachat Sahakari Sakh Samiti Maryadit vs. DCIT in ITA No. 143/RPR/2022 December 15, 2022 (2023) 221 TTJ 0404 (Raipur) where it has been held that 9. I have given a thoughtful consideration to the issue in hand, and find substance in the claim of the Ld. AR that though the amendment disabling an assessee to claim deduction under Chapter VIA of the Act was incorporated in Section 80AC of the Act vide the Finance Act, 2018 w.e.f. 01.04.2018, but as no such amendment was made available in section 143(1)(a) of the Act till 01.04.2021, therefore, no adjustment to the returned income of the assessee to the said effect could have been carried out during the year under consideration i.e. A.Y.2018-19. To sum up, it is the claim of the Ld. AR that as Section 143(1)(a)(v) of the Act was brought in conformity and rendered compatible to facilitate disallowance of claim for deduction u/s.80P r.w. Section 80AC(ii) only vide the Finance Act, 2021 w.e.f. 01.04.2021, thus, the disallowance of the assessee’s claim for deduction u/s.80P for a period prior thereto i.e. A.Y.2018-19 could not have been carried out in the garb of an adjustment u/s.143(1)(a) of the Act. 10. Before proceeding any further, I deem it fit to cull out the post- amended provisions of Section 80AC of the Act, which reads as under: “80AC. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after— (i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80- IAB or section 80-IB or section 80-IC or Section 80-ID or Section 80-IE; (ii) the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading “C- Deductions in respect of certain incomes.” no such deduction shall be allowed to him unless he furnishes a return of this income for such assessment year on or before the due date specified under sub-section (1) of Section 139.]” On a perusal of the aforesaid statutory provision, it transpires that sub- section (ii) of Section 80AC of the Act as was amended vide the Finance Act, 2018 w.e.f. 01.04.2018 contemplated, that no deduction under Chapter VIA of the Act would be admissible unless the assessee had furnished his return

12 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD of income on or before the “due date” as specified under sub-section (1) of Section 139 of the Act. At the first blush, the view taken by the A.O who had vide his intimation issued u/s.143(1) dated 25.06.2019 disallowed the assessee’s claim of deduction u/s.80P for the reason that it had belatedly filed its return of income, i.e., beyond the stipulated time period provided u/s.139(1) of the Act appeared to be correct, but then we are afraid that the fact is not so as it so appears. As stated by the Ld. AR, and, rightly so, the amendment in the machinery proviso i.e. Section 143(1)(a)(v) of the Act rendering the same as workable to disallow any deduction claimed by the assessee under Chapter VIA in a case return of income is furnished by him beyond the “due date” specified in sub-section (1) of Section 139 of the Act was made available only vide the Finance Act, 2021, w.e.f. 01.04.2021 i.e. from A.Y.2021-22 onwards. On the basis of the aforesaid position of law, I concur with the claim of the Ld. AR that as the pre-amended Section 143(1)(a)(v) jeopardized the allowability of an assessee’s claim for deduction only qua those claimed under Section 10A, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or 80-IE of the Act, and Section 143(1)(a)(v) was only post- amendment that was made available on the statute vide the Finance Act, 2021 w.e.f. 01.04.2021 been made compatible, and in fact workable, to facilitate a disallowance contemplated u/s.80P w.e.f. A.Y.2021-22, therefore, it is beyond comprehension that as to how any such adjustment could have been made by the CPC, Bengaluru vide an intimation issued u/s.143(1) of the Act, dated 25.06.2019 for the year under consideration, i.e., A.Y.2018- 19. On the basis of my aforesaid deliberations I find favour with the claim of the Ld. AR that as the CPC, Bengaluru had clearly traversed or, in fact exceeded its jurisdiction for disallowing u/s.143(1)(a)(v) of the Act the assessee’s claim for deduction u/s.80P de hors any power vested with it at the relevant point of time, thus, the same cannot be sustained and is liable to be vacated. Accordingly, I set-aside the order of the CIT(Appeals) and vacate the disallowance of the assessee’s claim for deduction u/s.80P of Rs.16,40,116/- made by the A.O. 4.1 Further in section 139(4), it no where it has been stated that if the return has not been filed u/s 139, the claim of exemption shall be denied u/s 80P. The ld. AO has failed to read and understood the provisions of law and without considering in their true perspective and sense has denied the deduction and proceeded on misinterpretation. Thus the addition liable to be deleted .

13 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD 4.2 Further the Society on the basis of provisions of Sec. 80P has not filled the ITR and under impression that the receipts/income below the limit. However filled u/s 139(4).

6.1. In the case of Amina Ismi lRangari vs. ITO (2017) 51 CCH 0595 MumcTrib it has been held that Capital gains—Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house—Rejection of claim of exemption—Case of assessee was re-opened and notice u/s 148 was issued—Assessee filed her return of income declaring taxable income after claiming exemption u/s 54F against ‘Long-term capital gains’ arising from sale of shares—AO held that share transaction entered into by assessee resulting in long term capital gains were not genuine—Since long-term capital gains were not treated to be genuine, AO also rejected claim of assessee for exemption u/s 54F— CIT(A) held that, rejection of claim of exemption u/s 54F by AO, was in order—Held, section 54F, neither provided as pre-condition requirement of filing of ‘return of income’ by assessee within stipulated time period, nor places any embargo as regards claim of such exemption in case ‘return of income’ filed by assessee involves some delay—When assessee raised claim u/s 54F in ‘return of income’ filed by her in compliance to notice u/s 148, therefore, it was obligatory on part of AO to have deliberated on entitlement of assessee towards claim of exemption u/s 54F—Due to dismissal of claim of exemption in limine by AO, there was no occasion for lower authorities to have deliberated upon satisfaction of requisite conditions contemplated u/s 54F by assessee—As assessee had during course of hearing of appeal submitted complete details as regards his

14 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD entitlement towards claim of exemption u/s 54F, AO was directed to verify genuineness and veracity of claim of assessee—Claim of exemption u/s 54F, as raised by assessee should be allowed—Assessee’s appeal allowed. 6.2 However the assessee had filed the ROI and Audit report suo-moto although u/s 139(4). Even As per the section 147 and section 148 of the Income Tax Act 1961 itself provide the opportunity to assessee for filing the return of income, hence we could not say that the Income Tax Return was late filed. And the Return filed u/s 148 is treated as filed u/s 139 and all the provision are applicable for the same.

6.3 Further if there was any procedure default for non-filing the ITR timely, for that there many other penalties or provision has been given.

The principal of the above judgment is also applicable in the present case.

2.3 On the other hand, the ld. DR supported the orders of the lower authorities. 2.4 We have heard both the parties and perused the orders of the lower authorities. It is noted from the above discussions that the deduction u/s 80P has

15 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD been denied to the assessee only for the reason that the assessee has not filed the ITR within the time limit provided u/s 139(1). However on perusal of the circulars and various judgments provided by the ld. AR , it is clear that the deduction u/s 80P is allowable if the Return of income for the A.Y. 2018-19 and 2019-20 is filed beyond the time limit u/s 139(1) as the Co-ordinate bench in the case of Lunidhar Seva Sahkari Mandali Ltd. vs. ASSESSING OFFICER (CPC) ITA No. 202/Rjt/2022 February 20, 2023 (2023) 67 CCH 0398 Rajkot Trib (2023) 200 ITD 0014 (Rajkot-Trib) Asst. Year 2019-20 has held as under:-

“7. We have heard the rival contentions and perused the material on record. In the instant facts, admittedly the assessee did not file return of income within the time permissible under section 139(1) of the Act. However, the assessee filed its return of income belatedly on 30-11-2020 and claimed deduction of Rs. 2,22,704/- under section 80P of the Act. The issue for consideration before us is that whether once the return of income is filed beyond the prescribed date under section 139(1) of the Act, can the deduction under section 80P of the Act be denied to the assessee, by way of adjustment under section 143(1) of the Act. On going through the statutory provisions, we observe that 80AC of the Act provides that no such deduction under section 80P of the Act shall be allowed to an assessee unless he furnishes a return of his income on or before the due date specified under section 139(1) w.e.f. assessment year 2018-19 onwards. However, section 143(1)(a)(v) of the Act provides that disallowance of deduction claimed under any of the provisions of Chapter VI-A under the heading “C.— Deductions in respect of certain incomes” (which includes deduction under section 80P of the Act), can be made if the return is furnished beyond the due date specified under sub-section (1) of section 139. This amendment has been introduced w.e.f. 1-4-2021. Accordingly, the above amendment would not apply to the impugned assessment year. Further, section 143(1)(ii) of the Act permits adjustment in case of an incorrect claim, if such incorrect claim is apparent from any information in the return. However, Explanation to the

16 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD aforesaid section specifies the following cases where the claim made in the return of income can be said to be “incorrect” for the purposes of this sub- section: (a) “an incorrect claim apparent from any information in the return” shall mean a claim, on the basis of an entry, in the return,— (i) of an item, which is inconsistent with another entry of the same or some other item in such return; (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction 7.1 A joint reading of the above provisions makes it evident that the claim of deduction under section 80P of the Act cannot be allowed the assessee, if the assessee does not file its return of income within the due date stipulated under section 139(1) of the Act w.e.f. assessment year 2018-19 onwards. However, we also note that amendment has been introduced in section 143(1)(a)(v) of the Act to provide that the claim of deduction under section 80P of the Act can be denied to the assessee, in case the assessee does not file its return of income within the time prescribed under section 139(1) of the Act with effect from 01-04-2021 and does not apply to the impugned assessment year i.e. assessment year 2019-20 relevant to financial year 2018-19. Accordingly, in our considered view, denial of claim under section 80P of the Act would not come within the purview of prima facie adjustment under section 143(1)(a)(v) of the Act, for the simple reason that the section was not in force during the period under consideration i.e. assessment year 2019-20. 7.2 The second issue for consideration is that whether the case of the assessee would fall within the purview of prima facie adjustment under section 143(1)(a)(ii)(an incorrect claim, if such incorrect claim is apparent from any information in the return). In our view, the scope of the adjustments that can be made under the said provision has been elaborated in the Explanation to the aforesaid section, which does not include denial of

17 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD deduction claimed by the assessee in case the assessee does not furnish its return of income within the date stipulated under section 139(1) of the Act. The Explanation to the said section specifically provides for cases/instances when the claim made by the assessee could be said to be “incorrect”. Therefore, in our considered view, the case of the assessee would also not fall within the purview of prima facie adjustment under section 143(1)(a)(ii)(an incorrect claim, if such incorrect claim is apparent from any information in the return). 7.3 We note that in the case of Chirakkal Service Co-Operative Bank Ltd. Kannur v. CIT 2016] 68 taxmann.com 298 (Kerala), the Kerala High Court held that a return filed by assessee beyond period stipulated under section 139(1) or 139(4) or under section 142(1) or section 148 can also be accepted and acted upon for entertaining claim raised under section 80P provided further proceedings in relation to such assessments are pending in statutory hierarchy of adjudication in terms of provisions of Act. In the case of ASR Engg. & Projects Ltd. [2019] 111 taxmann.com 49 (Hyderabad- Trib.), the ITAT held that to be eligible to make claim under section 80-IA or any other section of Chapter VI A, assessee should have filed return of income under section 139(1) and even if it did not make claim for deduction in original return and subsequently file revised return making such claim, its claim for deduction under section 80-IA is maintainable. Therefore, where assessee had filed return under section 139(1), it was entitled to claim deduction under section 80-IA even if such claim was not made in original return but subsequently in revised return filed in response to notice issued under section 153A. In the case of Lanjani Co-Operative Agri Service Society Ltd. (CPC) v. DCIT [2023] 146 taxmann.com 468 (Chandigarh- Trib.), the ITAT held that the enabling provisions of sub- clause (v) of section 143(1) providing for disallowance of deduction under section 80P due to late filing of return having been introduced by Finance Act, 2021 effective from 1-4-2021, disallowance of deduction claimed under section 80P during relevant years 2018-19 and 2019-20 on grounds of late filing of return was unjustified 7.4 We note that the instant case, there was a delay in filing the return of income by the assessee for the assessment year 2019-20 and return of income was filed within due date permissible u/s 139(4) of the Act, in which the claim for deduction u/s 80P of the Act was made. Therefore, looking into the totality of facts, we are of the view that claim of deduction u/s 80P of the

18 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD Act cannot be denied to the assessee only on the basis that the assessee did not file return of income its return of income within due date u/s 139(1) of the Act, in light of the discussion and judicial precedents highlighted above. 8. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 22-02-2023.”

We also take into consideration the order of ITAT, Raipur Bench in the case of Jila Alp Sankhyak Bachat Sahakari Sakh Samiti Maryadit vs. DCIT in ITA No. 143/RPR/2022 December 15, 2022 (2023) 221 TTJ 0404 (Raipur) wherein it has been held as under:-

‘’9. I have given a thoughtful consideration to the issue in hand, and find substance in the claim of the Ld. AR that though the amendment disabling an assessee to claim deduction under Chapter VIA of the Act was incorporated in Section 80AC of the Act vide the Finance Act, 2018 w.e.f. 01.04.2018, but as no such amendment was made available in section 143(1)(a) of the Act till 01.04.2021, therefore, no adjustment to the returned income of the assessee to the said effect could have been carried out during the year under consideration i.e. A.Y.2018-19. To sum up, it is the claim of the Ld. AR that as Section 143(1)(a)(v) of the Act was brought in conformity and rendered compatible to facilitate disallowance of claim for deduction u/s.80P r.w. Section 80AC(ii) only vide the Finance Act, 2021 w.e.f. 01.04.2021, thus, the disallowance of the assessee’s claim for deduction u/s.80P for a period prior thereto i.e. A.Y.2018-19 could not have been carried out in the garb of an adjustment u/s.143(1)(a) of the Act. 10. Before proceeding any further, I deem it fit to cull out the post- amended provisions of Section 80AC of the Act, which reads as under:

19 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD “80AC. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after— (i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80- IAB or section 80-IB or section 80-IC or Section 80-ID or Section 80-IE; (ii) the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading “C- Deductions in respect of certain incomes.” no such deduction shall be allowed to him unless he furnishes a return of this income for such assessment year on or before the due date specified under sub-section (1) of Section 139.]” On a perusal of the aforesaid statutory provision, it transpires that sub- section (ii) of Section 80AC of the Act as was amended vide the Finance Act, 2018 w.e.f. 01.04.2018 contemplated, that no deduction under Chapter VIA of the Act would be admissible unless the assessee had furnished his return of income on or before the “due date” as specified under sub-section (1) of Section 139 of the Act. At the first blush, the view taken by the A.O who had vide his intimation issued u/s.143(1) dated 25.06.2019 disallowed the assessee’s claim of deduction u/s.80P for the reason that it had belatedly filed its return of income, i.e., beyond the stipulated time period provided u/s.139(1) of the Act appeared to be correct, but then we are afraid that the fact is not so as it so appears. As stated by the Ld. AR, and, rightly so, the amendment in the machinery proviso i.e. Section 143(1)(a)(v) of the Act rendering the same as workable to disallow any deduction claimed by the assessee under Chapter VIA in a case return of income is furnished by him beyond the “due date” specified in sub-section (1) of Section 139 of the Act was made available only vide the Finance Act, 2021, w.e.f. 01.04.2021 i.e. from A.Y.2021-22 onwards. On the basis of the aforesaid position of law, I concur with the claim of the Ld. AR that as the pre-amended Section 143(1)(a)(v) jeopardized the allowability of an assessee’s claim for deduction only qua those claimed under Section 10A, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or

20 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD 80-IE of the Act, and Section 143(1)(a)(v) was only post- amendment that was made available on the statute vide the Finance Act, 2021 w.e.f. 01.04.2021 been made compatible, and in fact workable, to facilitate a disallowance contemplated u/s.80P w.e.f. A.Y.2021-22, therefore, it is beyond comprehension that as to how any such adjustment could have been made by the CPC, Bengaluru vide an intimation issued u/s.143(1) of the Act, dated 25.06.2019 for the year under consideration, i.e., A.Y.2018-19. On the basis of my aforesaid deliberations I find favour with the claim of the Ld. AR that as the CPC, Bengaluru had clearly traversed or, in fact exceeded its jurisdiction for disallowing u/s.143(1)(a)(v) of the Act the assessee’s claim for deduction u/s.80P de hors any power vested with it at the relevant point of time, thus, the same cannot be sustained and is liable to be vacated. Accordingly, we set-aside the order of the CIT(Appeals) and vacate the disallowance of the assessee’s claim for deduction u/s.80P of Rs.16,40,116/- made by the A.O.’’

It is also noteworthy to mention that the CBDT vide its Circular No. 13/2023 dt. 26.07.2023 has directed the Department to allow the condonation of delay where the return has been filed after due date as to claim made u/s 80P by the assesses with following narration. ‘’Sub: Condonation of delay under clause (b) of sub-section (2) Section 119 of the Income Tax Act for returns of income claiming deduction u/s 80P of the Act for various assessment years from AY 2018-19 to AY 2022-23- Reg.’’ We find from the available records that the assessment in the case of the assessee had been completed but the assessee was unable to file application for condondation of delay before the prescribed authority. Hence, according to this circular, the assessee is entitled to avail of benefit u/s 80P of the Act. Hence in

21 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD view of the above facts, circumstances of the case, case laws (supra) and the CBDT Circular, the Bench feels that the assessee is entitled to claim deduction u/s 80P of the Act with the direction to allow claim of Rs.3,13,541/- for A.Y. 2018-19.

3.1 As regards the ground No. 3 of the assessee regarding charging of interest u/s 234A, 234B and 234C of the Act, the Bench feels that charging of interest is consequential in nature which does not require any adjudication.

4.1 Now we take up the appeal of the assessee for the assessment year 2019-20 wherein it is noticed that the ld. CIT(A) has passed stereotyped order by dismissing the appeal of the assessee and the narration made therein is as under:-

6.6 The provisions laid out in Section 80AC(ii), which came into effect on April 1, 2018, leave no room for ambiguity. They emphatically establish that any deduction sought under Part C of Chapter VIA will be deemed admissible exclusively if the income tax return for that particular case is filed within the prescribed due date. Consequently, no claims under any of the provisions in Part C of Chapter VIA will be entertained in the instance of a belated return. 6.7 The date of income tax return submission is conspicuously evident on the return document itself. Upon a thorough review, it becomes abundantly clear whether the return conforms to the stipulated statutory time limit or falls into the category of belated submissions. This process is inherently mechanical and falls squarely within the purview of Section 143(1)(a)(ii) of the Act. The Central Processing Centre (CPC) is well-equipped to efficiently carry out this task.

22 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD 6.8 In the present case, the assessment year in question is AY 2019-20, and the appellant filed the income tax return on October 22, 2020, which is beyond the due date of filing the return, i.e., September 30, 2019, as per Section 139(1) of the Act. In accordance with the provisions of Section 80AC(ii) of the Act, which apply to AYs 2018-19 and onwards, the appellant is clearly ineligible to claim the exemption under section 80P of the Act. 6.9 Hence, there is no flaw in the AO's decision to disallow the appellant's deduction claim under section 80P while processing the return under section 143(1) of the Act. Consequently, all the raised appeal grounds are rejected. 7. As a result, the appeal is hereby dismissed.’’

4.2 It is not imperative to repeat the facts of the case for the assessment year 2019-20 as the issue raised in the appeal by the assessee for the assessment year 2018-19 are same and the decision taken by us in the case of the assessee for the assessment year 2018-19 shall apply mutatis mutandis in the assessment year 2019-20 also. Thus the appeal of the assessee is allowed.

5.1 As regards the ground No. 3 of the assessee regarding charging of interest u/s 234A, 234B and 234C of the Act, the Bench feels that charging of interest is consequential in nature which does not require any adjudication.

23 ITA NO.772/JP/2023 THIKARIYA GRAM SEWA SAHAKARI SAMITI LTD In the result, both the appeals filed by the assessee are allowed. 60 Order pronounced in the open court on 27 /03/2024.

Sd/- Sd/-

jkBksM deys'k t;UrHkkbZ ½ ¼lanhi xkslkbZ½ (Rathod Kamlesh Jayantbhai) (Sandeep Gosain) ys[kklnL;@Accountant Member U;kf;dlnL;@Judicial Member

Tk;iqj@Jaipur fnukad@Dated:- 27 /03/2024 *Mishra आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- M/s. Thikariya Gram Sewa Samiti Ltd., Sikar 2. izR;FkhZ@ The Respondent- The ITO, Ward, Sikar 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZ QkbZy@ Guard File (ITA No. 772/JP/2023) vkns'kkuqlkj@ By order,

Asstt. Registrar