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Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR
Before: SHRI RAVISH SOOD
आदेश / ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 30.03.2022, which in turn arises from the intimation issued by the A.O under Sec. 143(1) of the Income-tax Act, 1961 (in short ‘the Act’) dated 25.06.2019 for the assessment year 2018-19. The assessee has assailed the impugned order on the following grounds of appeal:
“1. In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in not allowing deduction of Rs.16,40,116/- u/s.80P of the Income Tax Act, 1961 which may kindly be allowed. 2. The appellant craves leave to add, amend, modify any ground(s) of appeal with due permission.”
Controversy involved in the present appeal lies in a narrow compass, i.e., sustainability of the disallowance of the assessee’s claim for deduction of Rs.16,40,116/- u/s.80P of the Act, for the reason that the assessee-society had filed its return of income belatedly, i.e., beyond the “due date” specified u/s.139(1) of the Act.
Succinctly stated, the assesee which is a Credit Co-operative Society duly registered under Co-operative Societies Act and engaged in accepting deposits from its members and lending funds to them
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had filed its return of income for the A.Y.2018-19 on 30.03.2019, declaring an income of Rs. Nil, i.e., after claiming deduction u/s.80P of the Act.
The assessee’s claim for deduction u/s.80P of the Act was declined by Centralized Processing Center (CPC) of the Income Tax Department, Bengaluru vide its intimation issued u/s. 143(1) dated 25.06.2019 for the reason that the return of income was not filed within the “due date” as specified u/s.139(1) of the Act.
On appeal the CIT(Appeals) upheld the disallowance made by the A.O by observing as under:
“4.3 Since law is very clear and specific, hence the deduction claimed by the appellant under section 80P cannot be allowed because of the delay in filing of return of income. Hon'ble ITAT Bengaluru in the case of Smt. Revathi Raju Vs The Income Tax Officer (ITAT Bangalore), ITA No.1425/Bang/2018 dated 15/07/2018 has held that provisions under section 80AC requiring the assessee to furnish the return of income before due date specified under section 139(1) is mandatory and not directory. Therefore, the assessing officer was justified in disallowing the claim of deduction on prima facie basis under section 80P amounting to Rs.33,33,790/- under section 143(1)(a) of the Income Tax Act 1961. The contention of the appellant that the ITR could not be filed before the due date for filing of return i.e. 31/08/2018 due to various reasons narrated in the written submission is not acceptable due to mandatory provisions of the law. Here timely filing of ITR is mandatory statutory requirement as far as compliance to section 80AC is concerned. Thus, the contention of the appellant is not acceptable. Accordingly, the Grounds of Appeal no. 1 is hereby dismissed.” 6. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before me.
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I have heard the ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions.
As observed by me hereinabove, the assessee’s claim for deduction u/s.80P of the Act had been declined by the CPC, Bengaluru vide intimation u/s.143(1) dated 25.06.2019, for the reason that pursuant to the amendment to Section 80AC of the Act, vide the Finance Act, 2018, w.e.f. 01.04.2018 no deduction would be admissible under any provision of Chapter VIA of the Act, unless the assessee furnishes his return of income for the assessment year on or before the “due date” specified under sub-section (1) of Section 139 of the Act. Accordingly, the A.O observing that the assessee society had filed its return of income belatedly, i.e., beyond the “due date” specified u/s.139(1) of the Act, thus, declined its claim for deduction u/s. 80P of Rs.16.40 lacs (supra) as was raised in its return of income.
I have given a thoughtful consideration to the issue in hand, and find substance in the claim of the Ld. AR that though the
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amendment disabling an assessee to claim deduction under Chapter VIA of the Act was incorporated in Section 80AC of the Act vide the Finance Act, 2018 w.e.f. 01.04.2018, but as no such amendment was made available in section 143(1)(a) of the Act till 01.04.2021, therefore, no adjustment to the returned income of the assessee to the said effect could have been carried out during the year under consideration i.e. A.Y.2018-19. To sum up, it is the claim of the Ld. AR that as Section 143(1)(a)(v) of the Act was brought in conformity and rendered compatible to facilitate disallowance of claim for deduction u/s.80P r.w.Section 80AC(ii) only vide the Finance Act, 2021 w.e.f. 01.04.2021, thus, the disallowance of the assessee’s claim for deduction u/s.80P for a period prior thereto i.e. A.Y.2018- 19 could not have been carried out in the garb of an adjustment u/s.143(1)(a) of the Act.
Before proceeding any further, I deem it fit to cull out the post- amended provisions of Section 80AC of the Act, which reads as under:
“80AC. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after— (i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or Section 80-ID or Section 80-IE;
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(ii) the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading “C-Deductions in respect of certain incomes.” no such deduction shall be allowed to him unless he furnishes a return of this income for such assessment year on or before the due date specified under sub-section (1) of Section 139.]”
On a perusal of the aforesaid statutory provision, it transpires that sub-section (ii) of Section 80AC of the Act as was amended vide the Finance Act, 2018 w.e.f. 01.04.2018 contemplated, that no deduction under Chapter VIA of the Act would be admissible unless the assessee had furnished his return of income on or before the “due date” as specified under sub-section (1) of Section 139 of the Act. At the first blush, the view taken by the A.O who had vide his intimation issued u/s.143(1) dated 25.06.2019 disallowed the assessee’s claim of deduction u/s.80P for the reason that it had belatedly filed its return of income, i.e., beyond the stipulated time period provided u/s.139(1) of the Act appeared to be correct, but then we are afraid that the fact is not so as it so appears. As stated by the Ld. AR, and, rightly so, the amendment in the machinery proviso i.e. Section 143(1)(a)(v) of the Act rendering the same as workable to disallow any deduction claimed by the assessee under Chapter VIA in a case return of income is furnished by him beyond the “due date” specified in sub-section (1) of Section 139 of the Act was made available only vide the Finance Act, 2021, w.e.f. 01.04.2021 i.e. from A.Y.2021-22
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onwards. On the basis of the aforesaid position of law, I concur with the claim of the Ld. AR that as the pre-amended Section 143(1)(a)(v) jeopardized the allowability of an assessee’s claim for deduction only qua those claimed under Section 10A, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or 80-IE of the Act, and Section 143(1)(a)(v) was only post- amendment that was made available on the statute vide the Finance Act, 2021 w.e.f. 01.04.2021 been made compatible, and in fact workable, to facilitate a disallowance contemplated u/s.80P w.e.f. A.Y.2021-22, therefore, it is beyond comprehension that as to how any such adjustment could have been made by the CPC, Bengaluru vide an intimation issued u/s.143(1) of the Act, dated 25.06.2019 for the year under consideration, i.e., A.Y.2018-19. On the basis of my aforesaid deliberations I find favour with the claim of the Ld. AR that as the CPC, Bengaluru had clearly traversed or, in fact exceeded its jurisdiction for disallowing u/s.143(1)(a)(v) of the Act the assessee’s claim for deduction u/s.80P de hors any power vested with it at the relevant point of time, thus, the same cannot be sustained and is liable to be vacated. Accordingly, I set-aside the order of the CIT(Appeals) and vacate the disallowance of the assessee’s claim for deduction u/s.80P of Rs.16,40,116/- made by the A.O.
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In the result, appeal of the assessee is allowed in terms of my aforesaid observations. Order pronounced in the open court on 15th day of December, 2022.
Sd/- (रवीश सूद /RAVISH SOOD) �या�यक सद�य/JUDICIAL MEMBER रायपुर / Raipur; �दनांक / Dated : 15th December, 2022 SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-1, Raipur (C.G.) 4. The Pr. CIT-1, Raipur (C.G.) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, रायपुर / DR, ITAT, “SMC” Bench, Raipur. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // �नजी स�चव /Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur