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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Ms. Suchitra Kamble
आदेश/ORDER
This is an appeal filed against the order dated 08-02- 2024 passed by ld. CIT(A) for assessment year 2022-23.
The grounds of appeal are as under:-
“1. The order passed u/s 250 by learned Addl./JCIT(A) National Faceless Appeal Centre, Delhi (for short "Addl./JCIT(A) on 8.2.2024 for AY 2022- 23 upholding the adjustment u/s 143(1)(a)(v) of disallowing the deduction under Chapter VIA is wholly illegal and unlawful.
2. The Addl/JCIT(A) has erred in upholding the disallowance of deduction under Chapter VIA, even though the ITR for AY 2022-23 was filed belatedly u/s 139(4) of the Act.
The Id. Addl/JCIT(A) has failed to appreciate that the provisions of sec. 143(b)(a)(v) do not provide for denial of deduction u/s 80P of the Act when the return of income is not filed within time limit as provided u/s 139(1) of the Act but u/s 139(4).
The ld. Addl/JCIT(A) has failed to appreciate that even though powers may be vested in Pr.CIT u/s 119(2)(b) to condone the delay, that does not deprive the appellant to pursue the remedy by way of appeal before the appellate authority and therefore, the Addl/JCIT(A) ought to have deleted the adjustment made u/s 143(1)(a)(v) by AO.CPC and allowed the deduction u/s 80P(2)(a)(i) of Rs.5,20,000/-.
That in the facts and circumstances of the case as well as in law, the impugned adjustment made by way of disallowing the claim of deduction u/s 80P(2)(a)(i) of Rs. 5,20,000/- is wholly beyond the scope of sec 143(1) and illegal.
6. The Ld. AddI/JCIT(A) has failed to appreciate that there was sufficient cause for delay in filing the ITR and no disallowance u/s 80P is warranted for such technical or venial breach, if any. It is therefore prayed that the deduction u/s 80P(2)(a)(i) of Rs.5,20,000/- may please be restored/allowed.”
3. The assessee is a co-operative society duly registered under the Gujarat Co-operative Society Act, 1961 and engaged in primarily providing credit facility to its members. The assessee society filed its return of income for assessment year 2022-23 on 22-10-2022 but e-verification was filed on 27-11- 2022 declaring total income of Rs. 13,000/- after claiming deduction u/s. 80P of Rs. 5,20,000/-. The same was processed u/s. 143(1) on 24-05-2023 wherein the said deduction u/s. 80P(2)(a)(i) of Rs. 5,20,000/- was disallowed and demand of Rs. 1,39,770/- was raised.
4. Being aggrieved by the intimation u/s. 143(1) dated 24- 05-2023, the assessee filed appeal before the NFAC (CIT(A)). The NFAC, CIT(A) dismissed the appeal of the assessee.
5. The ld. Authorized Representative submitted that the Form No. 5 was late from the due date and therefore the CPC has disallowed the deduction available u/s. 80P(2)(a)(i) of the Act to the assessee. The Authorized Representative submitted that the circular of CBDT No. 5 of 2022 and CBDT Circular No. 2 of 2024 dated 31-03-2014 will not be applicable in assessee’s case as there was only 20 days delay in filing Form No. 5 in the present case. The ld. Authorized Representative further submitted that the CIT(A) was not right in affording the adjustment u/s. 143(1)(a)(v) of disallowing the deduction under Chapter 6A. The ld. Authorized Representative submitted that the CIT(A) failed to appreciate that the provisions of section 143(1)(a)(v) do not provide for denial of deduction u/s. 80P of the Act when the return of income is not filed within time limit as provided u/s. 139(1) of the Act but u/s. 139(4). The ld. Authorized Representative further submitted that the CIT(A) failed to appreciate that even though powers may be vested in Pr. CIT u/s. 119(2)(b) but generally delay that does not describe the assessee to pursue the remedy by way of delay before the appellate authority. The ld. Authorized Representative submitted that there is a sufficient cause for delay in filing the income tax return and therefore the disallowance u/s. 80P was not justify. The ld. Authorized Representative relied upon the decisions of the Tribunal in case of Chakargadh Seva Sahakari Mandali Ltd. vs. DCIT 202 ITD 784 and Lunidhar Seva Sahakari Mandali Ltd. 200 ITR 14. The ld. Departmental Representative relied upon the order of the CIT(A) and reiterated that as per the circular if the assessee does not file return of income within the specified extended due date then the remedy available to the assessee is u/s. 119(2)(b) of the Act.
Heard both the parties and perused all the relevant materials available on record. It is pertinent to note that as per claiming deduction under Chapter 5A the mandate of filing the return u/s. 139 is a necessary condition and the same has to be filed within the stipulated time given under the income tax statute. The contention of the ld. Authorized Representative that the return of income is not filed as provided u/s. 139(1) but that of under section 139(4) will also not help the assessee as the assessee admits that there is a delay in filing of income within the extended period as well. The power vested in Pr. CIT u/s. 119(2)(b) categorically mentioned in notification no. 5 of 2020 dated 29-07-2022 as well as notification no. 2 of 2024 dated 31-03-2024 issued by the CBDT for the conveyance of the assessee only. The assessee has the remedy available under the Act for applying for condonation of delay and therefore it will be appropriate that the assessee may file application for condonation of delay before the Pr. CIT u/s. 119(2)(b) of the Act. Therefore, the assessee is directed to file the application before the Pr. CIT u/s. 119(2)(b) of the Act and after following all the due process the department specially the Pr. CIT may take the decision as per income tax statutes. Needless to say the assessee be given opportunity of hearing.
In the result, the appeal of the assessee is partly allowed for statistical purposes.