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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: PRADIP KUMAR CHOUBEY & SRI SANJAY AWASTHI
order
: July 24th, 2024 ORDER
Per Sanjay Awasthi, Accountant Member:
In this case, the Assessing Officer, CPC, Bengaluru (hereinafter referred to as ld. 'AO') issued an intimation order dated 05.12.2019 u/s 143(1) of the Income Tax Act, 1961 (in short the 'Act'). In this order the AO made an adjustment to the extent of denying deduction u/s 80P of the Act on the ground that the return was not filed as per the due date u/s 139(1) of the Act, rather the return was filed in the extended period available u/s 139(4) of the Act. Aggrieved with this action of the AO, the appellant approached the Commissioner of Income Tax (Appeals) [hereinafter referred to as ld. 'CIT(A)'] I.T.A. No.: 1153/KOL/2023 Assessment Year: 2018-19 Durgamondap Samabay Krishi Unnayn Samiti Ltd. who vide his order dated 20.02.2023 upheld the action of the AO by resorting to the provisions of Section 80AC(ii) of the Act.
1.1. Aggrieved with this action of ld. CIT(A) the appellant has approached the ITAT with the following grounds of appeal:
“1. For that the Ld. CIT(A) was not justified in confirming the action of the A.O. (CPC) in denying deduction u/s 80(P)(2)(a)(i) of Rs.22,38,515/ for belated filing of the Return of Income U/S 139(4) of the Income Tax Act.
2. For that the Ld. CIT(A) ought to have considered that the reason for belated filing of return of income was beyond the control of the society, the return was filed in delay due to ignorance and delay in statutory audit. Auditor of statutory audit is allotted from cooperative audit directorate Government of West Bengal and allotment was delayed where the PACS assessee does not have any control for the same.
3. For that the Ld. CIT(A) ought to have considered that the issue was debatable and the adjustment u/s 143(1) was not permissible in law.” 1.2. Before proceeding any further in this matter, it is noticed that there is a delay of 182 days in filing this appeal. Ld. Counsel for the assessee has filed an application for condonation of delay as under:
“1. That the order passed by the Ld. CIT(A), NFAC dated 23.02.2023 for the AY: 2018-19 against an intimation order u/s 143(1) was received by the assessee on or around 25.02.2023 through email.
That Sri Nirmal Barman who is the Manager of the assessee-co-operative and is looking after the taxation matter was suffering from various ailments. Copy of the medical prescriptions are attached herewith and collectively marked as Annexure: ‘A’.
That due to such physical condition, he was not attending the office regularly and the email through which the appellate order was sent was totally overlooked by him.
That on or around the month of October, 2023 when he accessed the income tax portal to ascertain the status of the appeal and thereupon it was noticed that the order was already passed on 23.02.2023.
That then he contacted Sri Tarun Sengupta, FCA to take necessary steps in the matter and handed over all the relevant papers to him on 20.10.23.
That the appeal was then prepared by him and finally deposited in the office of 1TAT on 27.10.2023 with a delay of around 185 days.
I.T.A. No.: 1153/KOL/2023 Assessment Year: 2018-19 Durgamondap Samabay Krishi Unnayn Samiti Ltd.
That in view of the factors mentioned above, your petitioner most humbly submits that there is a reasonable cause for 185 days’ delay in filing the appeal which may please be condoned and the case of your petitioner be heard on merit. In the circumstances, your petitioner prays that the delay in filing appeal before this Ld. Tribunal may kindly be condoned and the case be heard on merits or such order/orders be passed as this Ld. Tribunal deems fit and proper.” 1.3. Considering the reasons advanced in the said application, the delay is hereby condoned and the matter is taken up for adjudication.
2. Before us, ld. Counsel for the assessee has argued that Section 143(1)(a)(v) of the Act is the critical part of the statute which would determine whether any assessee claiming relief u/s 80P of the Act could be denied the benefit of the same in case the return was not filed within the time prescribed u/s 139(1) of the Act. He thereafter, took us to the provisions and pointed out that for the assessment year under consideration section 80P of the Act was not specifically mentioned for any mandate regarding filing of returns within the due date as per Section 139(1) of the Act. He also relied on the following cases to canvas the point that the amendment to Section 143(1)(a)(v) of the Act was carried out with effect from 01.04.2021 and prior to that Section 80P of the Act was not included in the same: a) ITAT order in the case of Jagannath Karbarh Deshpran SKUS Ltd. vs. ITO, Ward -27(4), Haldia; dated 22.05.23 b) ITAT order in the case of Kishorepur Paschimanchal SKUS Ltd. vs. ITO, Ward-27(4), Haldia; ITA No. 716/K/22 dated 22.05.23 c) ITAT order in the case of Jila ALP Sankhayak Bachat Sahakari Sakh Samiti Maryadit vs. DCIT, CPC, Bengaluru; ITA No. 143/RPR/2022 dated 15.12.2022 2.1. The ld. D/R read out the provisions of Section 80AC of the Act in support of the order of ld. CIT(A) and vehemently asserted that considering the express provisions contained in the said Section a return filed beyond the I.T.A. No.: 1153/KOL/2023 Assessment Year: 2018-19 Durgamondap Samabay Krishi Unnayn Samiti Ltd. due date as per Section 139(1) of the Act would be denied any relief u/s 80P of the Act.
3. We have considered the rival submissions and also gone through the documents on record. For the sake of reference, the provisions of Section 143(1)(a)(v) of the Act as they stood prior to amendment, and relevant for the assessment year under consideration are as under: “v) disallowance of deduction claimed under sections 10AA, 80-IA, 80-1AB, 80-IB, 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” 3.1. Thereafter, with effect from 01.04.2021 the amended provisions read as under: “(v) disallowance of deduction claimed under 98[section 10AA or under any of the provisions of Chapter VI-A (emphasis added) under the heading "C.—Deductions in respect of certain incomes", if] the return is furnished beyond the due date specified under sub-section (1) of section 139; or” 3.2. Furthermore, Section 80AC of the Act reads 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 (1) of section 139.]” 3.3. A careful perusal of the said Sections reveals that Section 143(1)(a) of the Act has been designed as a complete code in itself and lays down the mandate for any Assessing Officer undertaking processing of return of income under this Section. Section 80AC of the Act is clearly outside of the purview I.T.A. No.: 1153/KOL/2023 Assessment Year: 2018-19 Durgamondap Samabay Krishi Unnayn Samiti Ltd. of Section 143(1)(a) of the Act and would come into play in case of assessment order was being framed u/s 143(3) of the Act. In fact, this interpretation is strengthened by the judgment of Hon’ble Kerala High Court in the case of Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana Sangham vs. CIT reported in [2023] 152 taxmann.com 347 (Kerala). The head notes are extracted for ready reference: “Section 80P, read with sections 80A and 80AC, of the Income-tax Act, 1961 - Deductions - Income of co-operative societies (Belated return) - Assessment years 2009-10 and 2010-11 - Assessee-society, engaged in financing and social welfare of toddy tappers/workers, had claimed deduction under section 80P - Assessing Officer made disallowance under section 80P(2)(a)(vi) since assessee's returns were filed much beyond date for filing prescribed under section 139 and even under section 148 - On reading sections 80A(5) and 80AC as they stood prior to 1-4-2018, it was noted that statutory scheme under Act was to admit only such claims for deduction under section 80P as were made by assessee in return of income filed by him - However, after 1-4-2018, even if assessee made his claim for deduction under section 80P in a return filed within time under section 139(4), 142(1) or 148, he would not be allowed deduction unless returns so filed was within due date prescribed under section 139(1) - Whether since assessee had filed its return of income after dates prescribed under section 139(1), returns were indeed non-est and could not be acted upon by Assessing Officer even if they were filed before completion of assessment - Held, yes - Whether, since assessee failed to fulfil pre-condition prescribed under section 80P, it was not entitled to benefit of exemption under section 80P(2)(a)(vi) - Held, yes [Paras 11 to 14]” 3.4. Thus, clearly since the processing has been done u/s 143(1)(a) of the Act, where the treatment to be given to items under Chapter VI (which includes Section 80P of the Act) is clearly mentioned then there can be no reason why the provisions of Section 80C of the Act will need to be resorted to for the limited purposes of processing of return. At the expense of repetition, it needs to mentioned that Section 80P of the Act was introduced for the purposes of Section 143(1)(a)(v) of the Act only with effect from 01.04.2021. Hence, any prior period return cannot be adversely effected in case it is not filed within the time prescribed u/s 139(1) of the Act. With this discussion, the appellant gets relief and the AO is directed to allow the benefit of Section 80P of the Act to the appellant.