MAHARASHTRA NAGRI CO OP CREDIT SOCIETY LTD,HINGHANGHAT vs. ITO, WARD-1, WARDHA, WARDHA

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ITA 52/NAG/2023Status: DisposedITAT Nagpur16 April 2024AY 2017-18Bench: SHRI SATBEER SINGH GODARA (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 Section 80AC, as amended, was not applicable retrospectively to the assessment year in question. It also found that the assessee had indeed claimed the deduction in its belated return and that the interest income derived from both nominal and regular members did not disentitle the assessee to the deduction, relying on Supreme Court judgments.

What were the facts?

The assessee, a co-operative credit society, appealed against the denial of deduction under Section 80P(2)(a)(i). The Revenue argued that the deduction was not eligible as no return was filed within the stipulated time and the claim was not made in the belated return.

What were the issues?

Whether the assessee is eligible for deduction under Section 80P(2)(a)(i) despite filing a belated return and whether the amended Section 80AC applies retrospectively.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i),Section 144,Section 142(1),Section 80AC,Section 80A(5)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(4)Show list

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Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH :NAGPUR [VIRTUAL HEARING]

Before: SHRI SATBEER SINGH GODARA

Hearing: 22.03.2024Pronounced: 16.04.2024

ORDER This assessee’s appeal for assessment year 2017-18, arises against the National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2022- 23/1044996292(1), dated 29.08.2022, involving proceedings u/s. 144 of the Income Tax Act, 1961 (in short “the Act”).

Heard both the parties. Case file perused.

2.

The assessee pleads the following substantive grounds in the instant appeal :

1.

“1. Where on the facts and circumstances of the case, the learned Commissioner was justified in affirming the addition made by the Assessing Officer u/s.80P(2)(a)(i) to the tune of Rs.19,33,650/-.

2 ITA.No.52/NAG./2023 2. The appellant craves leave to add or alter any other ground that may be taken at the time of hearing.”

2. Coming to the assessee’s sole substantive grievance seeking to claim section-80P(2)(a)(i) deduction of Rs.19,33,650/-; the Revenue’s vehement preliminary stand in light of assessment as well as CIT(A)'s detailed discussion is that the same is not eligible to be granted once no return had been filed within the time stipulated by the Assessing Officer in furtherance to his sec.142(1) notice.

3.

Learned DR quoted sec.80AC of the Act that filing of sec.139(1) return is a condition precedent for claiming the impugned deduction. It is noticed from a perusal of the CIT(A)'s detailed discussion in para-6 that the assessee had indeed filed it’s return, albeit belatedly, in response to sec.142(1) notice. That being the case, I am of the opinion that the amended provision herein i.e., sec.80AC of the Act imposing such a stipulation of filing of sec.139(1) return within the “due” date, has been substituted by the Finance Act, 2018 w.e.f. 01.04.2018 whereas the impugned assessment year herein is 2017-2018 only. There is no indication in the statute that this substituted sec.80AC carries any retrospective effect. I thus find no merit in Revenue’s instant preliminary argument going by stricter interpretation as per Commissioner of Customs (Imports), Mumbai vs. M/s. Dilip Kumar And Co. & Ors. [2018] 9 SCC 1 (SC) (FB).

3 ITA.No.52/NAG./2023 4. Learned DR next quoted sec.80A(5) of the Act that the assessee had not made the impugned claim even in it’s alleged belated return. Mr. Marathe draw my attention to the CIT(A)'s detailed discussion in paragraphs 7 to 7.1 rejecting the assessee’s claim in very terms. He failed to rebut the clinching fact emerging from the assessee’s pleadings in Form-35 that the assessee had indeed raised the impugned claim in it’s return filed on 11.12.2019. It is reiterated that sec.80AC of the Act has already been held as not applicable in light of the detailed discussion in preceding paragraph(s). Faced with this situation, I reject the Revenue’s instant second substantive argument while placing reliance on sec.80A(5) of the Act.

5.

Lastly comes the Revenue’s third argument in light of Citizen Co-op Society Ltd., vs. ACIT [2017] 84 taxmann.com114 (SC) that the assessee has derived it’s impugned interest income from both nominal as well as regular members. This last issue is found to be no more res integra once hon’ble apex court’s recent landmark decision in Mavilayi Service Co-operative Bank Ltd., vs., CIT [2021] 431 ITR 1 (SC) has rejected the Revenue’s very stand. Faced with this situation, I thus accept the assessee’s impugned sec.80P(2)(a)(i) deduction claim in very terms. Necessary computation shall follow as per law. Ordered accordingly.

6.

Delay of 116 days is condoned as per assessee’s solemn averments in light of Collector, Land Acquisition vs., MST Katiji [1987] 167 ITR 471 (SC) having settled the law long back that all

4 ITA.No.52/NAG./2023 such technical aspects must make a way for the cause of substantial justice.

7.

This assessee’s appeal is allowed in above terms.

Order pronounced in the open Court on 16.04.2024.

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