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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
This appeal by assessee is directed against the order dated 12.09.2023 of the Commissioner of Income Tax (Appeal), National Faceless Appeal Centre(NFAC), Delhi for A.Y.2018-19. The assesse has raised following grounds of appeal:
“1. On the facts and circumstances of the case and in law the learned Commissioner of Income tax (Appeals) erred in passing ex-parte order and dismissing the appeal. The Appellant prays that the order of CIT(A) be set aside for granting opportunity of hearing.
ITANo.523/Ind/2023 M.P. Rajya Powerloom Bunkar Sahakari Sangh Maryadit 2. On the facts and circumstances of the case and in law the learned CIT(A) erred in confirming the disallowance under section 80P of the Income tax Act. The Appellant prays that the said disallowance be directed to be deleted.
3. On the facts and circumstances of the case and in law the learned CIT(A) erred in confirming the addition of Rs.2,77,34,160 to the total income of assessee.
4. On the facts and circumstances of the case and in law the learned CIT(A) erred in completing the assessment best of his judgment”
At the time of hearing the Ld. AR of the assesse has submitted that the assesse is Cooperative Society and filed its return of income belatedly on 30.03.2019 declaring nil income after claiming deduction u/s 80P of the Act. The AO denied the claim of deduction u/s 80P in view of the provisions of section 80AC of the Act substituted by the Finance Act 2018 w.e.f 01.04.2018. Thus, the Ld. AR has submitted that due to the amendment in the said provision of section 80AC there was confusion about the allowability of deduction u/s 80P for A.Y.2018-19 onwards due to delay in filing the return of income. He has further submitted that this grievance was raised before the CBDT and vide circular no.13 of 2023 dated 26.07.2023 the CBDT has directed the CCsIT/DGsIT to deal with the applications for condonation of delay. Therefore, the CBDT in order to mitigate genuine hardship in cases of Cooperative Society claiming deduction u/s 80P has allowed the Cooperative Societies to file the applications for condonation of delay in filing the return of income and claiming u/s 80P of the Act before the CCsIT/DGsIT who will consider the condonation of delay Page 2 of 7 ITANo.523/Ind/2023 M.P. Rajya Powerloom Bunkar Sahakari Sangh Maryadit while deciding the applications on merits and in accordance with law. Ld. AR has stated at bar the assesse would file an application before CCsIT/DGsIT for condonation of delay in filing the return of income and claiming deduction u/s 80P. Hence he has pleaded that the matter may be remanded to the record of the AO for reconsideration of the matter after the application of the assessee for condonation of delay is decided by the CCsIT/DGsIT.
3. On the other hand, ld. DR has raised no objection if the matter is remanded to the record of the jurisdictional AO for reconsideration of the matter after the application to be filed by the assessee for condonation of delay is decided by the CCsIT/DGsIT.
4. We have considered rival submissions as well as relevant material on record. The AO has denied the claim of deduction u/s 80P to the assessee Cooperative Society on the ground that as per the provisions of section 80AC any deduction is admissible under chapter VIA shall not be allowed to the assessee until he furnishes a return of income for such assessment year on or before the due date specified u/s 139(1) of the Act. The AO noted that the assessee has not filed its return of income on or before the due date specified u/s 139(1) of the Act and therefore, the deduction claimed u/s 80P has been disallowed and aided to the total income of the assesse. The assesse challenged the action of the AO before the CIT(A) however, the appeal of the assesse was dismissed and order of the AO has been upheld by the CIT(A) while passing the impugned order due to non-compliance on the part of the assessee to the ITANo.523/Ind/2023 M.P. Rajya Powerloom Bunkar Sahakari Sangh Maryadit various notices issued by the CIT(A). It is pertinent to note that the solitary issues in this case is disallowance of deduction u/s 80P due to delay in filing the return of income. The AO has disallowed the claim of deduction u/s 80P by invoking provisions of section 80AC of the Act which was substituted by Finance Act 2018 w.e.f 01.04.2018. Therefore, this is first year post the said amendment in section 80AC putting the restriction/bar on the claim of deduction u/s 80P in case the return of income is not filed within the due date prescribed u/s 139(1) of the Act. The assessee adversely effected by this amendment in section 80AC approach the CBDT for condonation of delay in furnishing the return of income. The CBDT has considered the matter/grievance of the assesses and directed the CCsIT/DGsIT to consider the applications for condonation of delay in para 2 to 7 as under:
2. In so far as section 80P of the Act is concerned, Finance Act, 2018 substituted section 80AC of the Act w.e.r. 01 .04.2018 which provides as under – Deduction not to be allowed unless return furnished. 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 his income for such assessment year on or before the due date specified under sub-section (I) of section 139.
Applications have been received in the Central Board of Direct Taxes (hereafter referred to as 'the Board') from co-operative societies claiming ITANo.523/Ind/2023 M.P. Rajya Powerloom Bunkar Sahakari Sangh Maryadit deduction uls 80P of the Act for various assessment years from A Y 20 18-19 to A Y 2022-23, regarding condonation of delay in furnishing return of income and to treat such returns as 'returns furnished within the due date under sub- .' .. section (I) of section 139 of the Act stating that delay in furnishing return of income was caused due to delay in getting the accounts audited under respective State Laws.
In order to mitigate genuine hardship in cases referred to in para 3, the Board, in exercise on the powers conferred under section 119 of the Act, hereby directs that the Chief Commissioners of Income· tax (CCs/T) / Directors General of income tax (DGsIT) are authorised to deal with such applications of condonation of delay pending before the Board, upon transfer of such applications by the Board, and decide such applications on merits, in accordance with the law.
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.
6. In the context of para·5 above, the CCslT/DGsIT while deciding such applications for condonation of delay in furnishing return of income, shall satisfy themselves that the applicant's case is a fit case for condonation under the existing provisions of the Act. The CCslT/DGsIT shall examine the following while deciding such applications – (i) the delay in furnishing the return of income within the due date under sub·section (I) of section 139 of the Act was caused due to circumstances beyond the control of the assessee with appropriate documentary evidence/s; (ii) where delay in furnishing return of income was caused due to delay in getting the accounts audited by statutory auditors appointed under the respective State Law under which such person is required to get his accounts audited, the date of completion of audit vis·a·vis the due date of furnishing the return of income under sub·section (I) of section 139 of the Act; and (iii) any other issue indicating towards tax avoidance or tax evasion specific to the case, which comes into the light in the course of verification and ITANo.523/Ind/2023 M.P. Rajya Powerloom Bunkar Sahakari Sangh Maryadit having bearing either in the relevant assessment year or establishing connection of relevant assessment year with other assessment year/s 6.1 The cases falling under para 6(iii) above, would require further necessary action as per law. " .' 7. The CCslT/DGslT 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.
Thus in order to mitigate genuine hardship in the cases of the Cooperative Societies claiming deduction 80P which was denied for the reason of delay in filing the return of income the CBDT has directed the CCsIT/DGsIT to consider the applications of the assessee for condonation of delay and decide the same on merits. Accordingly in the facts and circumstances of the case and in the interest of justice the matter is set aside to the record of the AO for fresh adjudication after outcome of the application for condonation of delay to be filed by the assesse before the CCIT/DGIT.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 18 .07.2024.