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Income Tax Appellate Tribunal, PUNE BENCHES “B” :: PUNE
Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed by the assessee against the order of Ld.Commissioner of Income Tax(Appeals)[NFAC], passed under section 250 of the Income Tax Act, 1961 dated 30.08.2023 emanating from assessment order passed under section 144 r.w.s 144B of the Act dated 21.04.2021. The assessee has raised the following grounds of appeal :
Sindhuurg Zilla Madhyamik Va Uchha Madhyamik Shikshak Va Shikshketar Karmachari Patsanstha Ltd., “1. On the facts and circumstances of the case and in law the CIT(A), NFAC erred in confirming the action of the Assessing Officer of denying its claim for deduction u/s 80P(2)(a)(i) and/or u/s 80P(2)(d) which the appellant had inadvertently claimed u/s 80P(2)(f) in its return under section 139(1) but had rectified the mistake by filing a revised return.
The appellant craves leave to add to, amend, alter, delete or modify all or any of the above ground of appeal or raise a new ground of appeal before or at the time of hearing.”
2. The assessee had filed return of income for A.Y.2018-19 electronically on 27.09.2018 declaring total income at Rs.Nil. During the assessment proceedings, the Assessing Officer(AO) observed that assessee had claimed deduction under section 80P(2)(f) of the Act. The AO requested assessee to file the details of deduction claimed under section 80P(2)(f) of the Act. Assessee failed to file the details even after giving sufficient opportunity to the assessee. Accordingly, AO disallowed the assessee’s claim of Rs.3,32,35,572/-. Aggrieved by the same, assessee filed appeal before the ld.Commissioner of Income Tax(Appeals).
3. Assessee failed to appear before the ld.CIT(A) and failed to file the details. However, in the statement of facts filed before the ld.CIT(A), the assessee submitted that assessee had inadvertently claimed deduction under section 80P(2)(f) while filing the return of Sindhuurg Zilla Madhyamik Va Uchha Madhyamik Shikshak Va Shikshketar Karmachari Patsanstha Ltd., income instead of claiming deduction under section 80P(2)(a) and 80P(2)(d) of the Act. Assessee claimed that the assessee had filed revised return of income. However, it appears from the Order of the Ld.CIT(A) that copy of the impugned Revised return was not filed before the ld.CIT(A), as no where the ld.CIT(A) has mentioned about the impugned Revised return. The ld.CIT(A) upheld the disallowance. Aggrieved by the order of the ld.CIT(A), assessee filed appeal before this Tribunal.
Findings and Analysis: 4. We have heard both the parties and perused the records. Ld.AR submitted that assessee could not file the details during the assessment proceedings and before the ld.CIT(A) due to illness and consequential death of Chairman of the impugned Society and retirement of Secretary. Assessee claimed that it had filed revised return, however, copy of the revised return has not been filed before us.
It is an admitted fact by the assessee that it had made claim under section 80P(2)(f) of the Act in the Original Return filed under section 139(1) of the Act. It is also an admitted fact that assessee had claimed to have filed Revised Return for claiming deduction under section 80P(2)(a) and 80P(2)(d) of the Act.
Sindhuurg Zilla Madhyamik Va Uchha Madhyamik Shikshak Va Shikshketar Karmachari Patsanstha Ltd., However, no copy of so-called Revised Return filed before ITAT or before the AO. There is no mention of the so-called Revised Return in the Assessment Order and Order of the Ld.CIT(A). Thus, there is no evidence of the so called Revised Return.
The Assessee has to prove that assessee is eligible for claiming deduction and also assessee has to claim the said deduction in the Return of Income. Section 80P(2)(f) is reproduced here under : 80P. (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub- section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee.
(2) The sums referred to in sub-section (1) shall be the following, namely : ………..
(f) in the case of a co-operative society, not being a housing society or an urban consumers' society or a society carrying on transport business or a society engaged in the performance of any manufacturing operations with the aid of power, where the gross total income does not exceed twenty thousand rupees, the amount of any income by way of interest on securities or any income from house property chargeable under section 22. 6.1 Section 80A(5) of the Act is reproduced here under : Deductions to be made in computing total income. 80A. (1) In computing the total income of an assessee, there shall be allowed from his gross total income, in accordance with and subject to the provisions of this Chapter, the deductions specified in sections 80C to 80U.
(2) The aggregate amount of the deductions under this Chapter shall not, in any case, exceed the gross total income of the assessee.
(3) ……..
(4) …………...
(5) Where the assessee fails to make a claim in his return of income for any deduction under section 10A or section 10AA or section Sindhuurg Zilla Madhyamik Va Uchha Madhyamik Shikshak Va Shikshketar Karmachari Patsanstha Ltd., 10B or section 10BA or under any provision of this Chapter under the heading "C.—Deductions in respect of certain incomes", no deduction shall be allowed to him thereunder 6.2 In this case admittedly the Assessee has not filed any evidence to prove that the Assessee is eligible for deduction u/s 80P(2)(f) of the Act. Also, in the Return of Income the Assessee has not claimed any deduction u/s 80P(2)(a) of the Act but Assessee claimed deduction u/s 80P(2)(f) of the Act. As per section 80A(5)of the Act , the Assessee has to claim the deduction in the return of income and if it is not claimed then the assessee will not be eligible for the deduction. In this case the Assessee has not claimed any deduction u/s 80P(2)(a) of the Act in the Original return of Income of Income filed u/s 139(1) of the Act. Assessee though claimed to have filed Revised return but Assessee never filed copy of the Revised return. In these facts and circumstances of the case, since the Assessee claimed deduction u/s 80P(2)(f) of the Act and admittedly the assessee is not eligible to claim the deduction u/s 80P(2)(f) of the Act, and assessee has never filed any evidence to substantiate the so called claim of deduction u/s 80P(2) (f) of the Act, we uphold the disallowance made by the AO in the assessment order.
Sindhuurg Zilla Madhyamik Va Uchha Madhyamik Shikshak Va Shikshketar Karmachari Patsanstha Ltd.,
The Hon’ble Supreme Court laid down the Rule of stricter interpretation in the case of [2018] 95 taxmann.com 327(SC) Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar & Company wherein the Hon’ble Supreme has held as under: “Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification.”
The Hon’ble Bombay High Court in the case of EBR Enterprises vs Union of India 415 ITR 139 (Bombay)[04-06-2019] has held as under : Quote, “5. As per this provision, where the assessee fails to make a claim in his return of income for any deduction under Section 10A or Section 10AA or Section 10B or Section 10BA or under any provision of the said Chapter - VI A under the heading "C.-Deduction in respect of certain incomes", no deduction would be allowed to him under the said provision. In plain terms, this Sub Section (5) of Section 80A of the Act imposes an additional condition for claim of deduction in relation to income under any of the provisions mentioned therein. Apart from the requirement of fulfillment of individual set of respective conditions for the purpose of claiming the concerned deduction, this plenary condition requires that the claim ought to have made in the return of income by the assessee and if the assessee fails to make such claim in the return of income, such deduction shall not allowed to him under the relevant provision. Admittedly, in the present case, the Petitioners had not raised any such claim in the return of income. In plain terms, the claim of the Petitioners under Sindhuurg Zilla Madhyamik Va Uchha Madhyamik Shikshak Va Shikshketar Karmachari Patsanstha Ltd., Section 80-IB (10) of the Act would be hit by Sub Section (5) of Section 80A of the act. …………………….. ….. What Sub Section (5) of Section 80A of the Act mandates is that, if the assessee fails to make a claim in his return of income for any deduction under the provisions specified therein, the same would not be granted to the assessee. This condition or restriction is not relatable to the Assessing Officer or the Income Tax Authority. This condition attaches to the claim of the assessee and has to be implemented by the Assessing Officer, CIT or the Appellate Tribunal as the case may be. There is no indication in Sub Section (5) of Section 80A of the Act as to why the restriction contained therein amounts to limiting the power of Assessing Officer but not that of Commissioner.” Unquote. (emphasis supplied)
8.1 Thus, Hon’ble Jurisdictional High Court categorically held that the conditions mentioned in the Section 80A(5) has to be strictly followed.
In the case of the assessee admittedly the Assessee had not claimed deduction u/s 80P(2)(a) and 80P(2)(d) of the Act in the Return of Income, it means the assessee has not complied the condition mentioned in the Section 80A(5) of the Act. Therefore, respectfully following Hon’ble Jurisdictional High Court , it is held that Assessee is not eligible for deduction u/s 80P(2)(a) and 80P(2)(d) of the Act as Assessee failed to make claim for the deduction u/s 80P(2)(a) and 80P(2)(d) in the Return of Income filed u/s 139(1) of the Act.
Sindhuurg Zilla Madhyamik Va Uchha Madhyamik Shikshak Va Shikshketar Karmachari Patsanstha Ltd., 9.1 The Hon’ble Kerala High Court in the case of Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana Sangham Vs. CIT 459 ITR 730 (Kerala)[14-03-2023], has held as under : Quote, “1. On a consideration of the rival submissions and on a perusal of the statutory provisions, we find that a reading of section 80A(5) and Section 80AC of the IT Act as they stood prior to 1-4- 2018, when the latter provision was amended by Finance Act 2018, would reveal that the statutory scheme under the IT Act was to admit only such claims for deduction under section 80P of the IT Act as were made by the assessee in a return of income filed by him. That return can be under sections 139(1), 139(4), 142(1) or section 148, and to be valid, had to be filed within the due date contemplated under those provisions. Under section 80A(5), the claim for deduction under section 80P could be made by an assessee in a return filed within the time prescribed for filing such returns under any of the above provisions. The amendment to Section 80AC with effect from 1- 4-2018, however, mandated that for an assessee to get a deduction under section 80P of the IT Act, he had to furnish a return of his income for such assessment year on or before the due date specified in section 139(1) of the IT Act. In other words, after 1-4-2018, even if the assessee makes his claim for deduction under section 80P in a return filed within time under sections 139(4), 142(1) or section 148, he will not be allowed the deduction, unless the return in question was filed within the due date prescribed under section 139(1). Thus, it is clear that the statutory scheme permits the allowance of a deduction under section 80P of the IT Act only if it is made in a return recognised as such under the IT Act, and after 1-4-2018, only if that return is one filed within the time prescribed under section 139(1) of the Act. As the return in these cases, for the assessment years 2009-10 and 2010-11, were admittedly filed after the dates prescribed under sections 139(1) and 139(4) or in the notices issued under section 142(1) and section Sindhuurg Zilla Madhyamik Va Uchha Madhyamik Shikshak Va Shikshketar Karmachari Patsanstha Ltd., 148, the returns were indeed non-est and could not have been acted upon by the Assessing Officer even though they were filed before the completion of the assessment.
There is yet another aspect of the matter. The requirement of making the claim for deduction in a return of income filed by the assessee can be seen as a statutory pre-condition for claiming the benefit of deduction under the IT Act. It is trite that a provision for deduction or exemption under a taxing Statute has to be strictly construed against the assessee and in favour of the Revenue. Thus viewed, a failure on the part of an assessee to comply with the pre- condition for obtaining the deduction cannot be condoned either by the statutory authorities or by the courts.
It is in the backdrop of the aforesaid discussion that we must consider the findings of a Division Bench of this Court in Chirakkal Service Co-operative Bank Ltd. [supra]. The findings therein, that appear to suggest that a claim for deduction under section 80P can be entertained even if it is made in a return filed beyond the time permitted under the IT Act, ignores the perspective that sees the requirement of the claim for deduction being made in a valid return as a pre-condition for obtaining the benefit of the statutory deduction. The said findings also fly in the face of the express statutory provisions that requires the claim to be made in a return filed by the assessee, by which term is meant a valid return under the Act, and therefore have necessarily to be seen as per incuriam. We also find that the subsequent amendments to section 80AC by the Finance Act 2018 fortifies the view that we have taken for, it makes the claim for deduction under section 80P conditional on filing a return within the due date prescribed under section 139(1) of the IT Act. In other words, the pre-condition for claiming the deduction under section 80P of the IT Act has now been made more stringent by reducing the time available to an assessee for making the claim. …………..
Sindhuurg Zilla Madhyamik Va Uchha Madhyamik Shikshak Va Shikshketar Karmachari Patsanstha Ltd., In the light of the aforesaid discussion, we find that the above questions of law have to be answered in favour of the Revenue and against the assessee, and we do so. Thus, these I.T. Appeals are disposed by answering the substantial questions of law raised therein, in favour of the Revenue and against the assessee.” Unquote.
9.2 Thus, Hon’ble Kerala High Court (supra) has explained the law that with effect from AY 2018-19, the claim for deduction u/s 80P has to be made in the return of Income filed u/s 139(1) of the Act and the deduction will not be available for those who claim it in the revised return. The enunciation of law made by Hon’ble High Court of Kerala(supra) is squarely applicable to the facts of the Assessee’s case. Therefore, respectfully following the Hon’ble High Court of Kerala, the Hon'ble High Court of Bombay(supra) and Stricter Interpretation Rule as laid down by Hon’ble Supreme Court (supra) for exemption provision, we hold that the Assessee is not eligible for deduction u/s 80P(2)(a) and 80P(2)(d) of the Act. Accordingly, grounds of appeal raised by the Assessee are dismissed.