RANI LAXMIBAI MAHILA GRAMIN BIGAR SHETI SAHAKARI PAT. LTD.,JAMNER, DIST-JALGAON vs. ITO WARD 1(4) JALGAON, JALGAON

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ITA 1336/PUN/2024Status: DisposedITAT Pune09 December 2024AY 2019-20Bench: DR.MANISH BORAD (Accountant Member), SHRI VINAY BHAMORE (Judicial Member)4 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the amendment to Section 143(1)(a)(v) of the Act, which allows disallowance of deductions for belated returns, was prospective and applicable from AY 2021-22. Therefore, for AY 2019-20, the CPC was not justified in disallowing the Section 80P deduction.

What were the facts?

The assessee, a cooperative society, filed its return belatedly claiming a deduction under Section 80P. The CPC processed the return and disallowed the deduction. The assessee contended that the amendment allowing disallowance for belated returns was prospective.

What were the issues?

Whether the disallowance of Section 80P deduction by the CPC for a belated return was valid for AY 2019-20, considering the prospective nature of the amendment to Section 143(1)(a)(v).

Which sections of the Income-tax Act were involved?

Section 80P,Section 143(1)(a)(v),Section 80AC(ii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE

Before: DR.MANISH BORAD & SHRI VINAY BHAMORE

For Appellant: Shri Vinay V. Kawdia
For Respondent: Shri Arvind Desai
Hearing: 04.12.2024Pronounced: 09.12.2024

आदेश / ORDER

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

1.

This appeal filed by the assessee pertaining to the Assessment Year (in short "AY") 2019-20 is directed against the order passed u/s.250 of the Income Tax Act, 1961 [in short “the Act"] by the Addl/JCIT(A)-4, Chennai dated 03.05.2024 arising out of the Intimation order passed u/s.143(1)(a)(v) of the Act, dated 07.05.2020.

2.

Facts of the case in brief are that the assessee is a Credit Cooperative Society registered under the Societies Registration Act. It is formed with the object of providing small finance, Agricultural term loans etc. to the women in Rural areas who are members of the Society. For the year under consideration, the assessee filed the return of income belatedly declaring Nil income after claiming deduction of Rs.62,56,854/- u/s.80P of the Act. The return was processed by the CPC disallowing the deduction claimed by assessee.

3.

The assessee preferred an appeal before the ld.CIT(A) contending that CPC has no power to disallow the deduction u/s.80P of the Act in respect of the returns filed belatedly by virtue of amendment carried out in Finance Act, 2021 w.e.f. 01.04.2021. The ld.CIT(A) countenanced the action made by the CPC relying on provisions of section 80AC(ii) of the Act.

4.

Aggrieved assessee preferred appeal before the Tribunal challenging the order passed by ld.CIT(A), relying on the decision of Pune Bench in the case of Finolex Industries Ltd. Vs. ITO in ITA No.76/PUN/2023.

5.

We have heard the rival contentions and perused the material on record. The sole issue agitated in this appeal whether the CPC was justified in denying the deduction claimed by the assessee u/s.80P of the Act for filing the return belatedly. We note that the amendment carried out in Finance Act, 2021 w.e.f. 01.04.2021 with respect to allowing of deduction u/s.80P of the Act is prospective in nature. Admittedly, the assessment year under consideration is 2019-20. In support of its contention, the ld. Counsel for the assessee drew the attention of the Bench to the decision of Coordinate Bench of the Tribunal in the case of Finolex Industries Ltd. Employees Co-o. Credit Society Ltd. Vs. ITO in dated 03.04.2023 wherein the issue was decided in favour of the assessee by observing as under :

“5. We have heard the submissions of the parties, considered the relevant materials/documents on record and analysed the facts and circumstances in this case. Section143(1)(a)(v) of the Act spells out that if any deduction is claimed under any of the provisions of Chapter VI-A which include deduction u/s 80P such deduction has to be allowed only if the return is filed within due date specified under sub-section 139(1) of the Act. In other words, if any return is filed beyond due date u/s 139(1) of the Act then no deduction u/s 80P shall be allowed. However, clause (v) was inserted by the Finance Act, 2021 w.e.f. 01- 04-2021. The case of the assessee, on the other hand, is for F.Y. 2018- 19 relevant to A.Y. 2019-20 which is the period prior to amendment brought in by the Finance Act, 2021. Before this amendment, clause (v) did not include and cover deduction u/s 80P. So therefore, in the present Case of the assessee though admittedly return was filed beyond the time limit prescribed u/s 139(1) of the Act but still section 143(1)(a)(v) is not applicable to the assessee since the case of the assessee is for A.Y. 2019-20, which is before the amendment. We also accept the argument of the ld. A.R for the assessee that even if the revenue intends to invoke clause (ii) of section 143(1)(a) that would also not be permissible since in the definition of incorrect claim as provided in the provision, the deduction u/s 80P is not included anywhere and is therefore, outside the purview of the said provision. Therefore, rigors of provisions of section 143(1)(a)(ii) and clause (v) are not applicable to the case of the assessee. On this legal ground itself, the assessee succeeds and any other grounds on merits, if any, becomes academic in nature.”

6.

On perusal of the above, we find that the facts of the above case are identical to the instant case of assessee. Following the decision of the Coordinate Bench of the Tribunal (supra), we hold that CPC was not justified in disallowing the deduction claimed by assessee u/s.80P of the Act for A.Y. 2019-10 as the powers for doing so were brought into the Act from A.Y. 2021-22. We therefore reverse the impugned order of the lower authorities and direct the AO to allow the deduction claimed by the assessee u/s.80P of the Act. Grounds raised by the assessee are allowed.

7.

In the result, the appeal filed by the assessee is allowed.

Order pronounced on this 09th day of December, 2024.

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