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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL
O R D E R
PER MAHAVIR SINGH, VICE PRESIDENT:
These appeals by the assessee are arising out of the orders of the Commissioner of Income Tax (Appeals), Addl/JCIT(A),Prayagraj in Order No.ITBA/APL/S/250/2023-23/1058743474 (1) & 1058743723(1) both dated 14.12.2023. The return of income for the assessment years 2018-19 & 2019-20 were processed and intimation u/s.143(1) of the Income Tax Act, 1961 (hereinafter the ‘Act’) were issued by the Asst. Director of Income Tax, Central &517/Chny/2024 Processing Center (CPC), Bengaluru vide orders dated 12.07.2019 & 20.09.2020 respectively.
At the outset, it is noticed that these appeals are barred by limitation by 15 days and assessee has filed affidavit for condonation of delay. The facts of the case are that the orders of CIT(A) is dated 14.12.2023. As per Form 36, the assessee has received this order on 14.12.2023 and appeal should have been filed on or before 12.02.2024 but appeal was actually filed on 27.02.2024 and thereby, there is a delay of 15 days. The assessee filed affidavit for condonation of delay of 14 days stating the reason that the Secretary of the assessee Co-operative Society was preoccupied with finalization of statutory audit and due to that filing of appeal was delayed.
2.1 When confronted, the ld. Senior DR contested the condonation petition and stated that there is no reasonable cause.
2.2 After hearing rival contentions and going through the facts of the case, we are of the view that delay can be condoned with a cost of Rs.5,000/- to be paid to the Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within a month’s time from the date of receipt of this order. Hence, seeing circumstances &517/Chny/2024 and cost adduced to assessee, we condone the delay and admit the appeals by levying a cost of Rs.5,000/- (Five thousand only). In term of the above, the appeals of the assessee are accordingly admitted for adjudication.
The only issue in these two appeals of assessee is as regards to the orders of CIT(A) confirming the action of the AO in not allowing deduction u/s.80P of the Act amounting to Rs.19,81,870/- in assessment year 2018-19 and amounting to Rs.27,90,635/- in assessment year 2019-20 for the reason that the returns of income in both the assessment years were not filed within the due date as prescribed u/s.139(1) of the Act.
At the outset, the ld.AR for the assessee stated that for assessment year 2018-19 in Chief Commissioner of Income Tax (CCIT), Coimbatore vide order dated 20.12.2023 has condoned the delay and directed the AO to allow the claim of deduction u/s.80P of the Act by observing in para 6 & 7 as under:- “6. In view of the above, the assessee’s application u/s 119(2)(b) of the Act, seeking condonation of delay in filing the return of income to claim deduction u/s 80P r.w.s. 80AC(ii) of the Act, for the Assessment Year 2018- 19 is hereby allowed. &517/Chny/2024 7. It is however, clarified that the condonation of delay in filing Return of Income will not amount to acceptance of deduction claim in the Return of income concerned per se and the deduction claim shall be dealt with on merits.” Since there is no other dispute on merits as regards to claim of deduction u/s.80P of the Act and disallowance was only made on the basis that the return of income was not filed within the due date prescribed u/s.139(1) of the Act, considering the above order of CCIT condoning the delay u/s.119(2)(b) of the Act, we direct the AO to allow the claim of deduction. Consequently the order of CIT(A) and the return processed by AO u/s.143(1) are quashed and the AO is directed to allow the relief. Accordingly, the appeal of the assessee is allowed.
Coming to for assessment year 2019-20.
We have heard rival contentions and gone through facts and circumstances of the case. We noted that the disallowance of claim of deduction u/s.80P of the Act amounting to Rs.27,90,635/- is made only for the reason that the return of income was filed beyond the due date as prescribed u/s.139(1) of the Act. The relevant assessment year involved is 2019-20 and the due date for filing of return is 30.09.2019, whereas assessee actually filed the return of ITA Nos.516 &517/Chny/2024 income on 29.07.2020. The extended due date of filing of return as per Board Circular is 31.10.2019. Even otherwise there is a delay in filing of return in term of section 139(1) of the Act. Therefore, the CPC, Bengaluru while issuing intimation u/s.139(1) of the Act and processing of return of income disallowed the claim of deduction u/s.80P of the Act amounting to Rs.27,90,640/-. Aggrieved, assessee preferred appeal before CIT(A)..
6.1 The CIT(A) also confirmed the action of the AO by observing in paras 6.6 to 6.9 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)(i) 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 2019-20, and the appellant filed the income tax return on July 29, 2020, which is beyond the due date of filing the return, i.e., September 30, 2019, as per Section 139(1) of the Act and also beyond the extended deadline of October 31, 2019, allowed for that relevant year. In accordance with the provisions of Section 80AC(i) of the Act, which apply to AYs 2018-19 and onwards, the &517/Chny/2024 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.”
Aggrieved, assessee is in appeal before us.
Before us, the ld.AR for the assessee Ms. A. Vijayalakshmi, FCA pointed out that in the provisions of section 80AC of the Act, the amendment is brought out from 01.04.2018 for not allowing the claiming of deduction while assessment is being framed in view of provisions of section 80C of the Act under chapter VIA i.e., deduction in respect of certain payments. The relevant provisions of section 80AC reads as under:- “80AC. Deduction not to be allowed unless return furnished.— Where in computing the total income of an assessee of the 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 no such 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 his income for such assessment year on or before the due date specified under sub- section (1) of section 139.”
This amendment is brought out by the Finance Act, 2018 w.e.f. 01.04.2018 and will apply for and from assessment year 2018-19. &517/Chny/2024 But the ld.AR for the assessee drew our attention to the provisions of section 143(1) clause (a) sub-clause (v) of the Act, wherein processing of return is to be carried out and disallowance of claim of deduction under Chapter VIA has to be made but the disallowance is to be made from 01.04.2021 as the amendment is carried out and particular deduction has to be disallowed as inserted by Finance Act, 2021. The relevant clause 143(1)(a)(5) reads as under:- Assessment.— 143. [(1) Where a 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: ………… …………. (v) disallowance of deduction claimed under section 10AA or under any of the provisions of Chapter VI-A under the heading “C-Deductions in respect of certain incomes”, if the return is furnished beyond the due date specified under the sub-section (1) of section 139; or The ld.AR stated that once the disallowance is to be restored u/s.143(1) of the Act, for this Chapter VIA and particularly section 80P that can be done for and from 2021-22 onwards. The relevant assessment year involved is 2019-20 and hence, no disallowance can be made while acting u/s.143(1) of the Act.
The ld. Senior DR could not controvert the above fact situation. &517/Chny/2024 9. Having heard rival contentions and going through the facts of the case, we noted that the provisions of section 143(1) of the Act as reproduced above, are very clear that the particular provision of deduction in respect of certain incomes under Chapter VIA are brought in the ambit of disallowance while processing return u/s.143(1) is with effect from 01.04.2021 and i.e., from assessment year 2021-22 by the Finance Act, 2021. Prior to that, no disallowance u/s.143(1) of the Act can be made under this head. The present appeal relates to assessment year 2019-20 and hence, the amended provisions of section 143(1) of the Act, which is effective from 01.04.2021 i.e., for and from AY 2021-2022 will not apply. In view of the above, we delete the disallowance and allow the appeal of assessee.
In the result, both the appeals filed by the assessee are allowed.
Order pronounced in the open court at the time of hearing on 27th June, 2024 at Chennai. (महावीर "सह ) (मनोज कुमार अ"वाल) (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) उपा"य" /VICE PRESIDENT लेखा सद"य/ACCOUNTANT MEMBER चे"ई/Chennai, "दनांक/Dated, the 27th June, 2024 RSR &517/Chny/2024