SHREE SHIV SAHYADRI NAGARI SAHAKARI PATHSANSTHA MARYADIT,PUNE vs. INCOME TAX OFFICER WARD 7(3) PUNE, PUNE

।आयकर अपीलीय अिधकरण ”एस एम सी” "ायपीठ पुणेम"। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC” :: PUNE BEFORE DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1788/PUN/2024 िनधा"रण वष" / Assessment Year: 2019-20 Shree Shiv Sahyadri Nagari V The Income Tax Officer, Sahakari Pathanstha s Ward-7(3), Pune. Maryadit, Sai Park Road, Dighi, Pune – 411015. PAN: AAEAS1417N Appellant/ Assessee Respondent / Revenue Assessee by Shri Deepak Sasar – AR Revenue by Smt. Shabana Parveen – Addl.CIT(DR) Date of hearing 06/11/2024 Date of pronouncement 07/11/2024 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by the Assessee directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], under section 250 of the Income tax Act, 1961 dated 28.06.2024 for A.Y.2019-20. The assessee has raised the following grounds of appeal : “1. The Ld.CIT(A) has wrongly confirmed the disallowance of deduction of Rs.15,60,115/- claimed by the appellant u/s.80P(2)(a)(i) of the Income Tax Act, 1961. 2. Alternatively, the interest income earned by the appellant from the investments in a co-operative bank is also eligible for deduction under section 80P(2)(d) of the Income Tax Act, 1961. 3. The Appellant crave leave to add, delete, amend, alter, vary and/or withdraw all or any one of the above grounds of appeal.”

Brief facts of the case : 2. In this case, assessee had filed Return of Income for A.Y.2019-20 on 17.03.2020. The due date for filing Return of Income for A.Y.2019-20 u/sec.139(1) of the Act was 30.09.2019. Thus, assessee had filed Return of Income belatedly u/sec.139(4) of the Act. The Return of Income was processed u/sec.143(1) of the Act. The Assistant Director of Income Tax(CPC) vide his order u/sec.143(1) dated 21.07.2020 disallowed claim made by the assessee for deduction u/sec.80P of the Act, on account that Return of Income was not filed within due date mentioned in the section 139(1) of the Act. Assessee filed an appeal before the ld.CIT(A). The appeal was allotted to ld.Additional Commissioner of Income Tax(Appeals-2), Gurugram. The Additional Commissioner of Income Tax(Appeals-2) upheld the order passed under section 2 143(1) of the Act. Aggrieved by the same, assessee filed appeal before this Tribunal.

2.1 Ld.AR for the assessee submitted that there is no provision u/sec.143(1) for A.Y.2019-20 to disallow the deduction claimed by assessee u/sec.80P of the Act, on account of not filing the Return of Income within the time mentioned under section 139(1) of the Act. The ld.AR read out relevant section 143(1) of the Act. Ld.AR for the assessee relied on the following case laws :  Chirakkal Service Co-Operative Bank Ltd. vs. Commissioner Of Income Tax (2016) 95 CCH 0197 KerHC.  Aliudepur Seva Sahakari Mandli Ltd. vs. ADIT (ITA No. 269/Rjt/2022).  Shree Antaliya Kheti Vikas Karyakari Seva Sahakari Mandali Ltd. Vs. ADIT (ITA No. 276/Rjt/2022).  Dahida Seva Sahakari Mandli Ltd. vs. ADIT (ITA No. 277/Rjt/2022).  Shri Nava Ujala Seva Sahakari Mandali Ltd. vs. The DCIT/ACIT(CPC) ITA No. 20/Rjt/2022.  Lanjani Co-Operative Agri Service Society Ltd. (CPC) v. DCIT [2023] 146 taxmann.com 468 (Chandigarh - Trib.)  Kerala State Cooperative Marketing Federation Ltd. And Others v. CIT [1998] 5 SCC 48.  Bajaj Tempo Ltd. Vs. CIT (1992) 196 ITR 188.  Veerappampalayam Primary Agricultural Cooperative Credit Society Limited (Rep. by its secretary) vs. Deputy

3 Commissioner of Income Tax and Ors. (2021) 202 DTR 0391 (Mad).  Chakargadh Seva Sahakari Mandali Ltd. Vs. Deputy Commissioner of Income Tax (2023) 202 ITD 793 (Rajkot).

Submission of ld.DR : 3. The ld.DR relied on the order of Assessing Officer and ld.CIT(A).

Findings & Analysis : 4. We have heard both the parties and perused the records. It is observed that assessee had claimed deduction u/sec.80P of the Act in the Return of Income filed on 17.03.2020. Assessee’s claim of deduction u/sec.80P was disallowed by an Intimation u/sec.143(1) dated 21.07.2020 on the ground that Return of Income was not filed within the due date. It is an admitted fact that assessee’s Return of Income was not filed within the due date. However, there is no provision u/sec.143(1) for any such disallowance. Section 143(1)(v) specifically refers to section 80IA, 80IAB, 80IB, 80IC, 80ID, 80IE. Thus, there is no reference to section 80P in the Section 143(1) of the Act. In the case of Chakargadh Seva Sahakari Mandal Limited vs. DCIT of ITAT Rajkot Bench held as under :

4 “7.2 The second issue for consideration is that whether the case of the assessee would fall within the purview of prima facie adjustment under section 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return). In our view, the scope of the adjustments that can be made under the said provision has been elaborated in the Explanation to the aforesaid section, which does not include denial of deduction claimed by the assessee in case the assessee does not furnish its return of income within the date stipulated under section 139(1) of the Act. The Explanation to the said section specifically provides for cases/instances when the claim made by the assessee could be said to be “incorrect”. Therefore, in our considered view, the case of the assessee would also not fall within the purview of prima facie adjustment under section 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return).

7.3 We note that in the case of Chirakkal Service Co-Operative Bank Ltd. Kannur v. CIT 2016] 68 taxmann.com 298 (Kerala), the Kerala High Court held that a return filed by assessee beyond period stipulated under section 139(1) or 139(4) or under section 142(1) or section 148 can also be accepted and acted upon for entertaining claim raised under section 80P provided further proceedings in relation to such assessments are pending in statutory hierarchy of adjudication in terms of provisions of Act. In the case of ASR Engg. & Projects Ltd. [2019] 111 taxmann.com 49 (Hyderabad - Trib.), the ITAT held that to be eligible to make claim under section 80-IA or any other section of Chapter VI A, assessee should have filed return of income under section 139(1) and even if it did not make claim for deduction in original return and subsequently file revised return making such claim, its claim for deduction under section 80-IA is maintainable. Therefore, where assessee had filed return under 5 section 139(1), it was entitled to claim deduction under section 80-IA even if such claim was not made in original return but subsequently in revised return filed in response to notice issued under section 153A. In the case of Lanjani Co-Operative Agri Service Society Ltd. (CPC) v. DCIT [2023] 146 taxmann.com 468 (Chandigarh - Trib.), the ITAT held that the enabling provisions of subclause (v) of section 143(1) providing for disallowance of deduction under section 80P due to late filing of return having been introduced by Finance Act, 2021 effective from 1-4-2021, disallowance of deduction claimed under section 80P during relevant years 2018-19 and 2019-20 on grounds of late filing of return was unjustified. In the case of Lunidhar Seva SahkariMandali Ltd.149 taxmann.com 28 (Rajkot - Trib.) the ITAT held that denial of claim under section 80P would not come within purview of prima facie adjustment under section 143(1)(a)(v) for reason that said section was not in force during period under consideration i.e. assessment year 2019-20. Further, the case of assessee would also not fall within purview of prima facie adjustment under section 143(1)(a)(ii), which specifies the list for disallowance under the said provision and prima facie adjustment for late filing of return of income is not specifically included therein.It was held that that since return of income was filed within due date permissible under section 139(4), in which claim for deduction under section 80P was made, therefore, deduction under section 80P could not be denied to assessee only on basis that assessee did not file its return of income within due date prescribed under section 139(1) by way of adjustment u/s 143(1) of the Act. 7.4 Therefore, though section 80AC of the Act does provide for denial of deduction u/s 80-P in case return of income is filed beyond stipulated date u/s 139(1) of the Act, but various judicial precedents have also held that “deduction” provisions need to be construed “liberally”. Therefore, denial of deduction u/s 80-P of the Act cannot come within the purview of a prima-facie adjustment

6 u/s 143(1) of the Act, especially in light of absence of an enabling provision during the impugned assessment year, which came to be introduced only during the succeeding assessment year. We, however, wish to point out that we are only concerned or adjudicating on the limited aspect of whether denial of deduction u/s 80-P of the Act can be sustained by way of prima- facie adjustment u/s 143(1) of the Act, and we are not adjudicating or commenting on whether such deduction u/s 80-P of the Act can be disallowed during the course of regular assessment.

7.4 We note that the instant case, there was a delay in filing the return of income by the assessee for the assessment year 2019-20. However, we are of the view that claim of deduction u/s 80P of the Act cannot be denied to the assessee only on the basis that the assessee did not file return of income its return of income within due date u/s 139(1) of the Act, by way of prima facie adjustment u/s 143(1) of the Act, in light of above discussion and judicial precedents highlighted above.”

4.1. Respectfully following the above decision, the appeal of the assessee is allowed.

7 आदेशक""ितिलिपअ"ेिषत / Copy of the Order forwarded to : अपीलाथ" / The Appellant. 1. ""यथ" / The Respondent. 2. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. िवभागीय"ितिनिध, आयकर अपीलीय अिधकरण, “एस एम सी” ब"च, 5. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड"फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, //// Senior Private Secretary आयकरअपीलीयअिधकरण, पुणे/ITAT, Pune.