THE ADARSHA BHARATHI FARMERS SERVICE COOPERATIVE SOCIETY LIMITED,KANEKAL vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, KURNOOL

Aggrieved by the order dated 03/10/2023 passed by the learned Addl/JCIT(A)-12, Mumbai [(Learned CIT(A)], in the case of The Adarsha Bharathi Farmers Service Co-operative Society Limited (“the assessee”) for the assessment year 2019-20, assessee preferred this appeal.

At the outset, it is submitted by the learned AR that the main issue to be considered in this appeal is deduction under section 80P of the Income Tax Act, 1961 (for short “the Act”) claimed by the assessee, which was denied for the reason that the assessee filed the return of income belatedly. On appeal, learned CIT(A) also dismissed the appeal of the assessee, observing that the assessee did not file the return of income until 03/11/2020, which is more than one year. Accordingly, learned CIT(A) upheld the action of CPC, Bangalore, stating that since the assessee did not comply with the statutory requirement of filing of return of income within the extended due date of 31/10/2019, the CPC had rightly denied the exemption to the assessee.

It was further submitted by the learned AR that before the learned CIT(A) the assessee clearly explained the reasons for delay in filing the return of income, namely, due to closure of Central Government Offices from 23/03/2020 to October, 2020 due to Covid-19 Pandemic. Learned CIT(A), however, did not accept the same and dismissed the appeal.

In this connection, learned AR placed on record a copy of the order condoning the delay in filing ITR, under section 119(2)(b) of the Act, wherein it was clearly mentioned that “after carefully considering the submission of the assessee and in view of the CBDT’s Circular No. 13/2013 in F.No. 173/21/2023-ITA-I, dated 26/07/2023 the assessee’s delay in filing the return of income for the A.Y. 2019-20 is hereby condoned”.

Thus, learned AR submitted that disallowance under section 80P of the Act made by the CPC, Bangalore and confirmed while dismissing the application under section 154 of the Act, in the guise of prima facie adjustment, overlooking the fact that prior to 01/04/2021, no such power was conferred upon the learned Assessing Officer to disallow such claim and that the provisions of section 143(1)(a)(v) of the Act brought within its purview the claim of deduction under section 80P of the Act for the purpose of making a prima facie adjustment in summary assessment proceedings only with effect from 01/04/2021 and per contra, any processing of return prior to that date contrary to the provisions as it existed at the time of making the summary assessment would be bad in law.

Hence, learned AR requested the Bench that since the late filing of return of income now stands condoned by the competent authority, in the interest of justice the matter may be restored to the file of learned Assessing Officer for fresh consideration as per the facts of the case.

Per contra, learned DR, while vehemently placing reliance on the orders of the Revenue authorities, agitated to accept the contentions raised by the learned AR.

We have gone through the record in the light of the submissions made on either side. As per record, it is clear that the delay in fining of return of income by the assessee, stands condoned by the competent authority, thereby removing the defect leading to the denial of section 80P benefit to the assessee. Since the delay to condone the reason for denial is now removed, the claim of the assessee deserves to be considered on merits and We, therefore, we set aside the impugned order and restore the issue to the file of the learned Assessing Officer to adjudicate the matter as per facts and according to law. Accordingly grounds raised by the assessee are treated as allowed for statistical purposes.

In the result, appeal of the assessee is treated as allowed for statistical purposes.