AIS SHIVAJI MEMORIAL SOCIETYS EMPLOYEES COOP CREDIT SOCIETY,PUNE V. INCOME TAX OFFICER, WARD 2(1), PUNE, PUNE

ITA 207/PUN/2025

AI Insights

The case revolves around the rejection of a deduction claim under section 80P of the Income Tax Act by the AIS Shivaji Memorial Society's Employees Coop Credit Society due to the belated filing of their income tax return for the assessment year 2019-20. The return was filed on 29.09.2020, past the extended due date of 31.10.2019. The CPC, upon processing the return, rejected the deduction claim citing the provisions of section 80AC, which mandates timely filing of returns for claiming deductions under Chapter VI-A. The assessee's appeal to the Ld. Addl CIT(A) was unsuccessful, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 781373 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Appeal Filed On: 24-01-2025
• Other Referred Cases: Veerappampalayam Primary Agricultural Cooperative Credit Society Limited vs. DCIT & Ors., Shree Shiv Sahyadri Nagari Sahakari Patsanstha Maryadit vs. ITO, Chakargadh Seva Sahakari Mandal Limited vs. DCIT, Lanjani Co-operative Agri. Service Society Ltd. & Anr. vs. DCIT & Anr., Shri Nava Ujala Seva Sahakari Mandali Ltd. vs. DCIT, Chirakkal Service Co-operative Bank Ltd. vs. CIT, Bajaj Tempo Ltd. vs. CIT, Kerala State Co-operative Marketing Federation Ltd. & Others vs. CIT, CIT vs. B. C. Srinivasa Setty
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P MURKUNDE
• Assessee Lawyers: DEEPAK S. SASAR
• Keywords: Co-operative Credit Society; FORM 26AS
• Section: 139; 10AA

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE JUSTICE (RETD.) C V BHADANG, PRESIDENT AND SHRI R. K. PANDA, VICE PRESIDENT ITA No.207/PUN/2025 Assessment year : 2019-20 AIS Shivaji Memorial Societys Employees Coop Credit Society 55/56, Shivajinagar, Pune – 411005 Vs. ITO, Ward 2(1), Pune PAN: AACAS9555M (Appellant) (Respondent) Assessee by : Shri Deepak S. Sasar Department by : Shri Ramnath P Murkunde Date of hearing : 25-08-2025 Date of pronouncement : 29-09-2025 O R D E R PER R.K. PANDA, VP: This appeal filed by the assessee is directed against the order dated 25.11.2024 of the Ld. Addl CIT(A) / JCIT(A)-2, Chandigarh relating to assessment year 2019-20. 2. Facts of the case, in brief, are that the assessee is a Co-operative credit society registered under the Maharashtra Co-Op. Societies Act, 1960. The assessee filed its return of income on 29.09.2020 claiming deduction of Rs.71,56,720/- u/s 80P(2)(a)(i) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). The CPC vide intimation dated 03.01.2021 u/s 143(1) of the Act rejected the claim of deduction of Rs.71,56,720/- on account of belated filing of the return. Printed from counselvise.com 2 ITA No.207/PUN/2025 3. Before the Ld. Addl CIT(A) / JCIT(A) it was argued that although the assessee has filed the return of income belatedly but the assessee society is eligible for deduction claimed u/s 80P in the return. Relying on various decisions it was argued that the provisions are beneficial in nature and should be interpreted in a liberal manner. 4. However, the Ld. Addl CIT(A) / JCIT(A) was not satisfied with the arguments advanced by the assessee. He observed that the assessee filed the return of income on 29.09.2020 as against the due date of 31.10.2019. Therefore, as per the specific provisions of section 80AC the deduction claimed by the assessee u/s 80P was not allowable. Further the CPC had also issued a communication to the assessee before making such adjustment. Rejecting the various explanations given by the assessee and relying on various decisions, the Ld. Addl CIT(A) / JCIT(A) dismissed the appeal filed by the assessee. 5. Aggrieved with such order of the Ld. Addl CIT(A) / JCIT(A), the assessee is in appeal before the Tribunal by raising the following grounds: 1. The Ld. CIT(A) not considered the claim of Assessee in case of Co- Operative Society, though filed Belated Return the claim is allowed u/s 80P(2)(a)(i). 2. The Ld. CIT (A) wrongly confirmed the disallowance of Section 80P(2)(a)(i) made by CPC Bengaluru, while processing the Return under section 143(1)(a). 3. The Appellant crave leave to add, delete, amend, alter, vary and/or withdrawal or any one of the above grounds of appeal. Printed from counselvise.com 3 ITA No.207/PUN/2025 6. The Ld. Counsel for the assessee strongly challenged the order of the Ld. Addl / JCIT(A) confirming the adjustment made by the Assessing Officer/CPC. Referring to the provisions of section 143(1)(a) of the Act, he submitted that the Assessing Officer / CPC has applied the provisions of section 143(1)(a)(ii) of the Act. Referring to the provisions of section 143(1)(a)(v), he drew the attention of the Bench to the same and submitted that as per the aforesaid provisions, the adjustment can be made by disallowing deduction claimed u/s 10AA, 80-IA, 80- IAB, 80-IB, 80-IC, 80-ID or section 80-IE if the return is furnished beyond the due date specified under sub-section (1) of section 139. He submitted that the above provisions were amended by the Finance Act, 2021 w.e.f. 01.04.2021 which read as under: “143. (1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:— (a) the total income or loss shall be computed after making the following adjustments, namely:— (i) …. (ii) …. (iii) …. (iv) .…. (v) disallowance of deduction claimed under section 10AA or under any of the provisions of Chapter VI-A under the heading \"C.—Deductions in respect of certain incomes\", if] the return is furnished beyond the due date specified under sub-section (1) of section 139” 7. He accordingly submitted that when the return was processed on 17.11.2020 the CPC had no power to make any such adjustment by rejecting the claim of deduction u/s 80P on account of belated filing of the return. Printed from counselvise.com 4 ITA No.207/PUN/2025 8. So far as the decision of Hon’ble Madras High Court relied on by the Ld. Addl / JCIT(A) in the case of Veerappampalayam Primary Agricultural Cooperative Credit Society Limited vs. DCIT & Ors. (2021) 321 CTR 163 (Mad) is concerned, he submitted that the same is not applicable to the instant case since it was under a Writ Petition and an ex-parte order. Further, the amendment made by the Finance Act, 2021 w.e.f. 01.04.2021 was not considered by the Hon’ble High Court and also it was a case of non-jurisdictional High Court. The Ld. Counsel for the assessee relying on the decision of the Pune Bench of the Tribunal in the case of Shree Shiv Sahyadri Nagari Sahakari Patsanstha Maryadit vs. ITO vide ITA No.1788/PUN/2024 order dated 07.11.2024 for assessment year 2019-20 submitted that the Tribunal following the decision of the Rajkot Bench of the Tribunal in the case of Chakargadh Seva Sahakari Mandal Limited vs. DCIT (2023) 202 ITD 793 (Rajkot) which in turn has relied on various other decisions, allowed the claim of the assessee by deleting the adjustment made by the CPC where the return was filed belatedly claiming the deduction u/s 80P of the Act. He also relied on the following decisions: (i) Lanjani Co-operative Agri. Service Society Ltd. & Anr. Vs. DCIT & Anr. (2022) 65 CCH 560 (Chd-Trib.) (ii) Shri Nava Ujala Seva Sahakari Mandali Ltd. vs. DCIT vide ITA No.20/Rjt/2022, order dated 31.10.2022 for assessment year 2019-20 (iii) Chirakkal Service Co-operative Bank Ltd. vs. CIT (2016) 95 CCH 197 (Ker) 9. Referring to the decision of Hon’ble Supreme Court in the case of Bajaj Tempo Ltd. vs. CIT (1992) 196 ITR 188 (SC), he submitted that the Hon’ble Printed from counselvise.com 5 ITA No.207/PUN/2025 Supreme Court in the said decision has held that a provision in a taxing statute granting incentives for promoting growth and development should be construed liberally and since a provision intended for promoting economic growth has to be interpreted liberally the restriction on it too has to be construed so as to advance the objective of section and not to frustrate it. 10. Referring to the decision of Hon’ble Supreme Court in the case of Kerala State Co-operative Marketing Federation Ltd. & Others vs. CIT [1998] 5 SCC 48, he submitted that the Hon’ble Supreme Court in the said decision has held that while interpreting the eligibility of deduction under section 80P of the Act, a Three-Judge bench of the Hon'ble Supreme Court observed that the section was enacted for \"encouraging and promoting growth of co-operative sector in the economic life of the country\" and in light thereof, preferred to read the exemption provision in a wider sense rather than cutting down its scope. 11. Referring to the decision of Hon’ble Supreme Court in the case of CIT vs. B. C. Srinivasa Setty, (1981) 128 ITR 0294 (SC), he submitted that the Hon’ble Supreme Court in the said decision has held that the charging section and the computation provision are integral parts of the taxing machinery and both must be considered together to determine the tax liability. 12. Referring to the following decisions, he submitted that the amended provisions cannot be applied retrospectively: Printed from counselvise.com 6 ITA No.207/PUN/2025 (i) CIT vs. Vatika Township (P) Ltd., (2014) 367 ITR 466 (SC) (ii) P. Ram Gopal Varma vs. DCIT (2013) 357 ITR 493 (AP) (iii) Allamaprabhu VUSS Niyamit Kalloli vs. ITO vide ITA No.063/PAN/2025, order dated 04.04.2025 13. He accordingly submitted that order of the Ld. Addl / JCIT(A) being not in accordance with law should be reversed and the grounds raised by the assessee be allowed. 14. The Ld. DR on the other hand referring to the provisions of section 143(1)(a)(ii) of the Act drew the attention of the Bench to the same and submitted that the CPC is empowered to make adjustment if an incorrect claim is made which is apparent from the information in the return filed. He submitted that admittedly in the instant case the return was filed belatedly, therefore, in view of the provisions of section 80AC, the CPC has rightly made the adjustment. He submitted that the Hon’ble Madras High Court has also decided the issue in favour of the Revenue and against the assessee which has been relied on by the Ld. Addl / JCIT(A). He accordingly submitted that the order of the Ld. Addl / JCIT(A) should be upheld and the grounds raised by the assessee be dismissed. 15. We have heard the rival arguments made by both the sides, perused the orders of the CPC / Assessing Officer and the Ld. Addl / JCIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant case has filed its Printed from counselvise.com 7 ITA No.207/PUN/2025 return of income on 29.09.2020 as against the due date of 30.09.2019 which was extended upto 31.10.2019. We find the CPC vide intimation dated 17.11.2020 proposed certain adjustments to which the assessee made its submissions. Rejecting the various explanations given by the assessee the CPC in the order passed u/s 143(1) of the Act on 03.01.2021 made adjustment by rejecting the claim of deduction u/s 80P which has been upheld by the Ld. Addl / JCIT(A). 16. We do not find any infirmity in the order of the Ld. Addl / JCIT(A) on this issue. We find the provisions of section 80AC read as under: “Deduction not to be allowed unless return furnished. 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; (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 his income for such assessment year on or before the due date specified under sub- section (1) of section 139. 17. We find the provisions of section 143(1)(a)(ii) of the Act read as under: “Assessment. 143. (1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:— (a) the total income or loss shall be computed after making the following adjustments, namely:— (i) ….. (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; (iii)……..” Printed from counselvise.com 8 ITA No.207/PUN/2025 18. A perusal of the above shows that for claiming the deduction u/s 80P of the Act, the assessee is required to furnish its return of income in time as prescribed u/s 139(1). Since the return was filed belatedly, the claim of deduction u/s 80P made by the assessee is incorrect which is apparent from the information in the return itself. Therefore, the CPC, in our opinion is empowered to make the adjustment. 19. We find the Hon’ble Madras High Court in the case of Veerappampalayam Primary Agricultural Cooperative Credit Society Limited vs. DCIT & Ors. (supra) while adjudicating an identical issue has observed as under: “3. The challenge to the intimations is on the ground that they do not confirm to the prescription of Section 143(1)(a) of the Act. Mr.Sudhakar and Mr.Prakasam, Mr.Karthikeyan not being present before the Court, would argue that the provisions of Section 143(1)(a) of the Act can only be invoked in cases where there are (i) patent arithmetical errors, (ii) an incorrect claim, such incorrect claim being apparent from any information/entry contained in the return, (iii) disallowance of loss claimed if the returns were filed beyond the due date, (iv) disallowance of expenditure indicated in the audit report but not taken into account in computing total income (v) disallowance of deduction claimed under specified provisions of the Act if the return was filed beyond due date or (vi) additional income appearing in Form 26AS or 16A or 16, which has not been taken into account in computing total income. According to them, there is no error as aforesaid that emanates from the returns of income filed by the petitioners and as such, the invocation of Section 143 (1)(a) of the Act is itself flawed. 4. Per contra, Mrs. Hema Muralikrishnan, learned Senior Standing Counsel for the Revenue would argue that the error arises from the fact that the returns of income have been filed belatedly and beyond the dates stipulated under Section 139 of the Act. There is no doubt or dispute in this regard. Hence, the claim under Section 80P could not have been putforth in the light of provisions contained in Section 80AC(ii) as it stood post amendment with effect from 01.04.2018. 5. Learned counsel for the petitioners would then argue that the Explanation under Section 143(1)(a) of the Act explains ‘an incorrect claim' for the purpose of Clause (ii) of Section 143 (1) (a) of the Act, as meaning a claim based on an entry Printed from counselvise.com 9 ITA No.207/PUN/2025 in a return of income. According to them, the date of return does not constitute an 'entry' and hence no adjustment is called for on this score. 6. Section 143 (1) (a) of the Act reads thus:- '143 (1) Where a return has been made undersection 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:— (a) the total income or loss shall be computed after making the following adjustments, namely:— (i) any arithmetical error in the return; (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; (iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) ofsection 139; (iv) disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return; (v) disallowance of deduction claimed undersections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or section 80-IE, if the return is furnished beyond the due date specified under sub- section (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return: Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode: Provided further that the response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made: 7. The scope of an 'intimation' under Section 143 (1) (a) of the Act, extends to the making of adjustments based upon errors apparent from the return of income and patent from the record. Thus to say that the scope of 'incorrect claim' should be circumscribed and restricted by the Explanation which employs the term 'entry' would, in my view, not be correct and the provision must be given full and unfettered play. The explanation cannot curtail or restrict the main thrust or scope Printed from counselvise.com 10 ITA No.207/PUN/2025 of the provision and due weightage as well as meaning has to be attributed to the purposes of Section 143(1)(a) of the Act. 8. The provisions of Section 80AC(ii) make it clear that any deduction that is claimed under Part C of Chapter VIA would be admissible only if the return of income in that case were filed within the prescribed due date. Thus no claim under any of the provisions of Part C of Chapter VIA would be admissible in the case of a belated return. There is no dispute on this position. The date of filing of a return of income would be apparent on the face of return and upon a perusal thereof, it would be clear as to whether the return is a valid return, having been filed within the statutory time limit, or a belated one. This is mechanical exercise and one that can be carried out by the CPC, very much within the scope of Section 143 (1) (a) (ii) of the Act.” 20. Since as per the provisions of section 80AC the assessee was required to file the return of income for claiming the deduction and since as per the provisions of section 143(1)(a)(ii) the CPC is empowered to make adjustment if an incorrect claim is made which is apparent from the return of income, therefore, respectfully following the decision of the Hon’ble Madras High Court in the case of Veerappampalayam Primary Agricultural Cooperative Credit Society Limited vs. DCIT & Ors. (supra), we hold that there is no infirmity in the order of the Ld. Addl / JCIT(A) confirming the adjustment made by the CPC. The decision of the Co-ordinate Benches of the Tribunal as well as the various other decisions relied on by the Ld. Counsel for the assessee cannot come to the rescue of the assessee in view of the decision of the Hon’ble Madras High Court in the case of Veerappampalayam Primary Agricultural Cooperative Credit Society Limited vs. DCIT & Ors. (supra) which is a higher forum. The argument of the Ld. Counsel for the assessee that it was the decision of a non-jurisdictional High Court or it was under a Writ Petition etc also cannot be accepted. Since the Ld. Addl / JCIT(A) while adjudicating the issue has relied on the decision of Hon’ble Madras High Court cited (supra) and no other Printed from counselvise.com 11 ITA No.207/PUN/2025 decision of any other Hon’ble High Court or Hon’ble Supreme Court was brought to our notice on this issue, therefore, respectfully following the decision of Hon’ble Madras High Court we uphold the order of Ld. Addl / JCIT(A). The grounds raised by the assessee are accordingly dismissed. 21. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open Court on 29th September, 2025. Sd/- Sd/- (JUSTICE (RETD.) C.V. BHADANG) (R. K. PANDA) PRESIDENT VICE PRESIDENT पुणे Pune; दिन ांक Dated : 29th September, 2025 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘A’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune Printed from counselvise.com 12 ITA No.207/PUN/2025 S.No. Details Date Initials Designation 1 Draft dictated on 01.09.2025 Sr. PS/PS 2 Draft placed before author 02.09.2025 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order Printed from counselvise.com "