ANUGRAHA CREDIT CO-OPERATIVE SOCIETY LIMITED,MANGALORE V. INCOME TAX OFFICER, WARD-2(3), MANGALORE

ITA 1875/BANG/2024

AI Insights

The case involves M/s. Anugraha Credit Co-operative Society Ltd., which appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, which upheld the disallowance of a deduction claimed under Section 80P of the Income Tax Act for the Assessment Year 2018-19. The deduction was initially disallowed by the Central Processing Centre (CPC) due to the late filing of the income tax return. The assessee contended that the due date for filing was extended to 31/10/2018 under the Karnataka Co-operative Societies Act, and the audit was completed before the filing of the return. The CIT(A) dismissed the appeal, agreeing with the CPC's decision. However, the Tribunal found that the necessary documents proving the timely audit were not considered by the lower authorities and thus restored the matter to the AO for re-evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46940 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Other Referred Cases: Shri Vedavyas Co-operative Credit Society Ltd. vs. ITO in ITA No. 823/Bang/2022
• Laws Referred To: Income Tax Act, Karnataka Co-operative Societies Act, 1959
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH R GALE; STANDING
• Assessee Lawyers: BALRAM R RAO
• Keywords: Period of limitation; Rectification of order; Co-operative Credit Society
• Section: 154; 143(1); 80P; 63; 44AB

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL SMC-‘A’ BENCH : BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 1875/Bang/2024 Assessment Year : 2018-19 M/s. Anugraha Credit Co- operative Society Ltd., Kumpala, Nisarga Road, Amruthanagara, Kumpala, Kotekar Post, Someshwara Village, Mangalore – 575 022. PAN: AAEAA3642H Vs. The Income Tax Officer, Ward – 2(3), Mangalore. APPELLANT RESPONDENT Assessee by : Shri Balram R Rao, Advocate Revenue by : Shri Ganesh R Gale, Standing Counsel for Dept. Date of Hearing : 09-04-2025 Date of Pronouncement : 09-04-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 03/07/2024 in respect of the A.Y. 2018-19 and raised the following grounds: “1. On the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals), NFAC erred in upholding the order passed under Section 154 of the Act dated 14.12.2022, wherein the claim of Section 80P of the Act was denied to the Appellant. Page 2 of 6 ITA No. 1875/Bang/2024 2. On the facts and in the circumstances of the case, the learned Commissioner Of Income Tax (Appeals) erred in providing sufficient opportunity to the Appellant to put forth the submissions of the Appellant. 3. On the facts and in the circumstances of the case, the learned Commissioner Of Income Tax (Appeals) as well as the authorities below failed in appreciating the fact that there was no fresh claim for deduction and that the Society had not produced any new evidences or records, but only erred in reporting the date of audit in the Return of Income. The proof of audit is an evidential fact and the not mentioning of the date of audit report is only a mistake committed inadvertently while filling details in the Income Tax Returns. 4. On the facts and in the circumstances of the case, the learned Commissioner Of Income Tax (Appeals) erred in upholding the justification of the Assessing Officer, wherein, an inference was drawn that the Appellant had failed in furnishing the Report of audit conducted under Karnataka Co-operative Societies Act, 1959 along with the Return of Income, when there was no provision to furnish any such documents while filing the Original Return electronically. 5. On the facts and in the circumstances of the case, the learned Commissioner Of Income Tax (Appeals) failed to appreciate that the learned Assessing Officer has erred in not providing an opportunity under Section 154(3), to the Appellant to substantiate the fact of conducting the audit under Section 63 of the Karnataka Co-operative Societies Act, 1959, before rejecting the claim of deduction under Section 80P, without calling for the audit report from Appellant. 6. On the facts and in the circumstances of the case, the learned Commissioner Of Income Tax (Appeals) as well as the authorities below failed to appreciate the fact that the Society has conducted the audit under the Co-operative Societies Act and hence the applicable due date for filing the Return of Income is 31.10.2018 and not 31.08.2018. 7. On the facts and in the circumstances of the case, the learned Commissioner Of Income Tax (Appeals) as well as the authorities below failed to appreciate the fact that as the Return is filed within the applicable due date on 13.09.2018, the Society is eligible to claim the deduction under Section 80P of the Income Tax Act. Page 3 of 6 ITA No. 1875/Bang/2024 8. Further, the Appellant prays that he may be permitted to raise additional grounds during the course of hearing if required. 9. For these and such other grounds that may be urged at the time of hearing, the Appellant prays that the appeal may please be allowed to meet the ends of justice.” 2. The assessee is a co-operative society and filed their return of income on 13/09/2018 declaring a total income of Rs. Nil. The return was processed and the deduction claimed by the assessee was disallowed by the CPC since the return was filed belatedly. Thereafter the assessee filed an application u/s. 154 of the Act and contended that the due date of filing the return of income was 31/10/2018 and therefore the claim made u/s. 80P is an allowable deduction. The AO relied on the details in the return of income for furnishing audit details and observed that the assessee had mentioned that they are not liable for audit u/s. 44AB of the Act but only liable for audit under the Karnataka Co-operative Societies Act but not furnished the date on which the audit report was filed. The assessing officer observed that therefore the CPC had rightly denied the deduction claimed u/s. 80P of the Act since the return of income was field on 13/09/2018 after the due date for filing the return which was on 31/08/2018. The assessing officer therefore rejected the application filed u/s. 154 of the Act. 3. As against the said order, the assessee filed an appeal before the Ld.CIT(A) on the ground that the assessee is liable for audit under the Karnataka Co-operative Societies Act and therefore they are entitled for the extended period for filing the return of income i.e. on or before 31/10/2018 and therefore contended that the rejection of the rectification application is not in order. The Ld.CIT(A) had dismissed the appeal on the ground that the assessee had not proved that their books of accounts were audited under the Karnataka Co-operative Societies Act and therefore observed that the CPC was rightly taken the due date of filing of return as 31/08/2018 and on that basis, the disallowance of deduction u/s. 80P of the Act is in order. As against the said order, the assessee is in appeal before this Tribunal. At the Page 4 of 6 ITA No. 1875/Bang/2024 time of hearing, the assessee filed two paper books running from pages 1 to 160. In the paper book, the assessee enclosed the notification issued by the CBDT extending the period of limitation for filing the return of income along with the audit report. The assessee also enclosed the copy of the audit report and the auditor’s letter to show that the audit report was made ready on 10/08/2018 before the date of filing of the return on 13/09/2018. The assessee also filed the typed copy of the confirmation letter given by the auditor dated 10/08/2018 which was also duly attested by the Ld.Counsel. The assessee also filed an acknowledgment given by the Deputy Director, Credit Co-operative Societies Audit, Mangaluru dated 01/09/2018 acknowledging that the assessee had filed their audit report on 01/09/2018. The Ld.AR based on the documents filed before this Tribunal had contended that the return filed on 13/09/2018 is in order and therefore the necessary deduction u/s. 80P should be granted to the assessee. The Ld.AR further submitted that non-mentioning of the audit details in the column is not fatal since the facts establishes that the books of accounts were audited well before the date of filing of the return of income. Therefore the Ld.AR prayed that the necessary deduction u/s. 80P should be granted. 4. The Ld.DR submitted that the assessee had not filled up the details in the column available in the return of income and also not stated about the date on which the audit report was prepared and filed before the Ld.CIT(A) and therefore defended the orders passed by the lower authorities and prayed to dismiss the appeal. The Ld.DR also relied on the order of the Coordinate Bench of this Tribunal in the case of Shri Vedavyas Co-operative Credit Society Ltd. vs. ITO in ITA No. 823/Bang/2022 dated 30.01.2023 and prayed to dismiss the appeal. 5. We have heard the arguments of both sides and perused the materials available on record. 6. The admitted fact in this appeal is that the return of income was filed on 13/09/2018 and the deduction u/s. 80P was claimed by the assessee Page 5 of 6 ITA No. 1875/Bang/2024 but mistakenly the details of the audit report was not mentioned in it and therefore the CPC had disallowed the deduction claimed u/s. 80P of the Act. Even at the time of filing the rectification application u/s. 154 of the Act, the assessee had not furnished the details of the audit report prepared under the provisions of the Karnataka Co-operative Societies Act. Therefore the AO had rejected the Section 154 application since no records were produced before it in order to grant the benefit of deduction u/s. 80P by considering the extended period of limitation granted by the CBDT. The assessee had also not furnished the date on which the audit was completed before the Ld.CIT(A) and therefore the Ld.CIT(A) had confirmed the rejection order passed u/s154 rectification order passed by the AO. 7. Now the assessee at the time of hearing had furnished the entire audit report as well as the copy of the auditor’s certificate and the acknowledgment issued by the Deputy Director of Co-operative Societies which would prove that the books of accounts were audited as early as 10/08/2018 and the same was also filed before the Deputy Director on 01/09/2018. If we consider the report, the return of income filed by the assessee on 13/09/2018 is well within the extended period of limitation granted by the CBDT. But unfortunately, these documents were not placed before the lower authorities and therefore they have no occasion to consider the same. 8. We have also gone through the order of the Coordinate Bench of this Tribunal cited (supra) which cannot be cited as a precedent for the present case. In the present case, the audit report was made ready on 10/08/2018 but the same was not filed, but filed before us whereas in the cited order, the assessee had not filed the audit report and also not furnished any information about the audit in the appropriate column in the income tax return and therefore this Tribunal had not accepted the case of the assessee and dismissed the same. Therefore the order cited by the Ld.DR could not be cited as precedent on the facts and circumstances of the case and therefore we are not relying on the said order passed by this Tribunal. Page 6 of 6 ITA No. 1875/Bang/2024 9. In such circumstances, we are restoring the entire issue to the file of the AO with the direction to consider the audit report furnished by the assessee and if the same is found otherwise eligible, grant the deduction u/s. 80P of the Act by suitably amending the intimation passed u/s. 143(1) of the Act on 31/05/2019. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 09th April, 2025. Sd/- Sd/- (WASEEM AHMED) (SOUNDARARAJAN K.) Accountant Member Judicial Member Bangalore, Dated, the 09th April, 2025. /MS / Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore "