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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
PERS. BALAKRISHNAN, Accountant Member :
This appeal filed by the assessee is against the order of the Learned Commissioner of Income Tax (Appeals) [Ld. CIT(A)], National Faceless Appeal Centre, Delhi in DIN & Order No. ITBA/NFAC/S/250/2021-22/1035187356(1), dated 31/8/2021
2 arising out of the order passed U/s. 144 of the Income Tax Act, 1961 [“the Act”] dated 07.12.2019 for the AY 2017-18. 2. Brief facts of the case are that the assessee is a Primary Agricultural Cooperative Credit Society which claimed deduction u/s. 80P of the Act for the AY 2017-18. However, the assessee has not filed its return of income as prescribed U/s. 139 of the Act. Accordingly, the AO disallowed the deduction claimed u/s. 80P of the Act by treating it as business income of the assessee and computed the total income of the assessee at Rs. 22,22,644/-. The order passed u/s. 144 of the Act was later rectified u/s. 154 r.w.s 144 dt 27.01.2020 by the AO to rectify the mistake while passing the order U/s. 144 of the Act. Aggrieved by the order of the Ld. AO the assessee filed an appeal before the Ld. CIT(A). Considering the submissions made by the assessee’s representative, the Ld. CIT(A) dismissed the appeal of the assessee and upheld the order of the Ld. AO. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us.
The assessee has raised the following grounds of appeal:
“1. The Ld. CIT(A), NFAC erred in both in law and on facts in not allowing deduction under section 80P of the Assessee cooperative credit society though the society being credit cooperative credit society and eligible for deduction u/s. 80P.
The Ld. CIT(A), NFAC erred both in law and facts in not allowing deduction u/s. 80P of the assessee cooperative credit society by erroneously applying the provisions of section 80A(5), which applies to assessee who has filed return of income and not claimed deduction in the return whereas the assessee has not filed any return.
Pray to allow any other ground raised during the course of hearing of appeal.”
Subsequently, the assessee vide letter dated 5/5/2022 filed a petition for admission of additional grounds of appeal as follows:
“The Ld. CIT(A) erred in denying the claim U/s. 80P of the IT Act and he ought to have considered the provisions of section 80AC of the IT Act as it stood at the relevant time, therefore the assessee is rightly entitled for the claim u/s. 80P(2)(a)(i) & u/s. 80P(2)(a)(iv).”
The Learned Authorized Representative [Ld. AR] argued that the assessee is a Primary Agricultural Cooperative Credit Society Limited who claimed deduction U/s. 80P of the Act. The Ld. AR further submitted that the assessee has not filed any return of income for the AY 2017-18 u/s. 139(1) but has filed u/s. 139(4) of the Act. The Ld. AR also submitted that the return of income was manually filled and sent by speed post to CPC, Bangalore on 15/3/2022. The Ld. AR further submitted that as per section 80P(2)(a)(i) the assessee is entitled for deduction as being
4 carrying on the business of banking or providing credit facilities to its members. The Ld. AR further submitted that section 80A(5) cannot be applied in the instant case due to the fact that it does not mention within which period the return should be filed. The Ld.AR further submitted that section 80AC(ii) which was inserted wef 1/4/2018 specifies that “any Deductionis admissible under any provisions of this Chapter under heading “C-deductions in respect of certain incomes” no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139 of the Act. The Ld. AR argued that since the heading “C-deductions in respect of certain incomes” has been segregated from the other deductions it has to be applied to the instant case also. The Ld. AR relied on the decision of the Hon’ble Kerala High Court in the case of Chirakkal Service Cooperative Bank vs. CIT reported in 68 taxmann.com 298 and also the decision of the Hon’ble Madras High Court in the case of CIT vs. Sri Vasavi Gold & Bullion Pvt Ltd reported in [2021] 125 taxmann.com 344 (Madras). Per contra, the Ld. DR submitted that the assessee has never filed its return of income in order to claim deduction u/s. 80P of the Act. The Ld. DR further submitted that as per section 80A(5) of the Act when no 5 return of income is filed,the assessee has failed to make a claim of deduction u/s. 80P(2)(a)(i) of the Act, no deduction is permissible under the Act. The Ld. DR relied on the orders of the Ld. Revenue Authorities.
We have heard both the parties perused the material available on record and the orders of the authorities below. Admitted facts are that the assessee has not filed its return of income for the impugned assessment year but has submitted trading account, P & L Account, income and expenditure account and balance sheet as on 31/3/2017 during the assessment proceedings. Section 80A(5) of the Act is extracted below for reference:
“Sec. 80A (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 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.’;”
As per sub-section (5) of section 80A of the Act it is imperative to the assessee to make a claim in its return of income for any deduction under any provisions of the Chapter under the heading “C-deduction in respect of certain incomes”. Since the assessee has failed to file its return of income claiming the deduction prima facie no deduction is permissible under the Act. Similarly, the assessee has filed return of income manually on 5/3/2022 which was sent by speed post to CPC, Bangalore on 15/3/2022. It is noticed from the submissions made by the Ld.AR that the return has been filed U/s. 139(4) of 6 the Act. As per section 139(4) of the Act “Any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous year at any time before three months prior to the end of the relevant assessment year or before the completion of the assessment, whichever is earlier.” It is noted from the paper book page no. 21 the assessee has filed its return of income for the AY 2017-18on 5/3/2022 u/s. 139(4) of the Act. We are of the view that since the return of income has been filed after completion of the assessment, the return should have been held as invalid and hence the claim made by the assessee for deduction U/s. 80P(2)(a)(i) cannot be held as an admissible deduction under the Act. The decision of the Hon’ble Kerala High Court in the case of Chirakkal Service Cooperative Bank vs. CIT (supra) relied on by the Ld. AR cannot be accepted due to the fact that in that case, the assessee has filed the belated return within the due dates. Similarly, in the decision of Hon’ble Madras High Court in the case of CIT vs. Sri Vasavi Gold & Bullion Pvt Ltd (supra) there was a technical issue in the e-filing of the appeals. But in the instant case the assessee has never filed its return of income. We therefore are inclined to uphold the order of the Revenue Authorities and dismiss the appeal of the assessee.
In the result, appeal of the assessee is dismissed.
Pronounced in the open Court on the 23rd August, 2022. (दुव्िूरुआर.एऱरेड्डी) (एसबाऱाकृष्णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) न्याययकसदस्य/JUDICIAL MEMBER ऱेखासदस्य/ACCOUNTANT MEMBER Dated : 23.08.2022 OKK - SPS आदेशकीप्रतिलिपिअग्रेपिि/Copy of the order forwarded to:- ननधधाररती/
The Assessee–The Vatsavai Primary Agricultural Cooperative Credit Society Limited, D.No.4-122, Indian Bank Road, Vatsavai – 521402. रधजस्व/The Revenue –Income Tax Officer, Ward-1(3), 40-6-15, 1st
Line, Near Hotel Sree Square Tikkle Road, Vijayawada – 520001. 3. The Principal Commissioner of Income Tax, आयकरआयुक्त ( अऩीऱ)/ The Commissioner of Income Tax (Appeals),
National Faceless Appeal Centre (NFAC), Delhi. ववभधगीयप्रनतननधध, आयकरअऩीऱीयअधधकरण, ववशधखधऩटणम/
DR,ITAT, Visakhapatnam गधर्ाफ़धईऱ / Guard file 6. आदेशधनुसधर / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam