CHILODA SEVA SAHAKARI MANDALI LIMITED,GANDHINAGAR V. THE ITO, WARD-1 (PREVIOUSLY WARD-5), GANDHINAGAR

ITA 837/AHD/2025

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The case involves Chiloda Seva Sahakari Mandali Ltd., a cooperative society, which appealed against the order of the CIT(A) confirming the addition of Rs 10,48,964 to its income for the assessment year 2017-18. The primary issue was the disallowance of a claim under section 80P of the Income Tax Act, which the Assessing Officer initially denied due to the late filing of the income tax return. The Tribunal considered the circumstances under which the return was filed and the relevant provisions of the Income Tax Act, particularly section 80A(5), which allows for deductions claimed in returns filed in response to notices under section 142(1). The Tribunal noted that the Assessing Officer and CIT(A) had not adequately examined the conditions for allowing the deduction under section 80P and remanded the matter for further examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780156 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 22-04-2025
• Other Referred Cases: M/s. Prathamika Krishi Pattina Sahakara Sangha Ltd. vs. ITO, Krushi Vibhag Karmachari Vrund Sahakari Pat Sanstha Maryadit vs. ITO, The Wanka Vividh Karyakari Seva Sahakri Mandli Ltd. vs. ITO, The Gandhinagar District Credit Co-operative Limited
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAMAL DEEP SINGH
• Assessee Lawyers: RAMESHCHANDRA B. PATEL
• Section: 144; 143(3); 142(1); 139

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before Dr. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member Chiloda Seva Sahakari Mandali Ltd. Chiloda Village, P.O. Chiloda, Gandhinagar-382355 PAN: AAAAC9388A (Appellant) Vs The ITO, Ward-1 Gandhinagar (Respondent) Assessee by: Shri Rameshchandra B. Patel, A.R. Revenue by: Shri Kamal Deep Singh, Sr. D.R. Date of hearing : 09-07-2025 Date of pronouncement : 07-10-2025 आदेश/ORDER Per Suchitra Kamble, Judicial Member: This is an appeal filed against the order dated 21-03- 2025 passed by CIT(A)/Addl/JCIT(A)-1, Hyderabad for assessment year 2017-18. 2. The grounds of appeal are as under:- “1. The order passed u/s 250 by ADDL/JCIT (A)-12. Hyderabad confirming addition of Rs 10,48,964/= is against law, equity and justice. 2. The Ld ADDL/JCIT (A) - 12, Hyderabad erred in law and or on facts in confirming the disallowance of claim made u/s 80P invoking section 80A (5) ignoring the fact that relevant section ITA No. 837/Ahd/2025 Assessment Year 2017-18 Printed from counselvise.com I.T.A No. 837/Ahd/2025 Chiloda Seva Sahakari Mandali Ltd., A.Y. 2017-18 2 does not speak about filing of ITR and ignoring submission made and documentary evidences filed. 3. The Ld. ADDL/JCIT(A) - 12, Hyderabad erred in law and or on facts in confirming the disallowance of claim u/s 80P ignoring the fact that section 80AC(ii) for claim of deduction u/s 80P in respect of income falling under Chapter VIA-C inserted from 01/04/2018 by Finance Act, 2018. 4. The Ld. ADDL/JCIT 12, Hyderabad erred law and or on fact in confirming disallowance of Rs. 10,48,964/= being claim of deduction made u/s 80P ignoring the fact that ITR could not be filed due to technical reason, however Statement of Computation of total income and Hard copy of ITR to be filed were furnished during Assessment proceeding. 5. The appellant craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal.” 3. The assessee Chiloda Seva Sahakari Mandali is assessed in the status of AOP/BOI. The assessee had not filed the original return of income for assessment year 2017- 18 within the time limit specified u/s. 139(1) of the Income Tax Act. Notice u/s. 142(1) was issued on 19-12-2017 upon which also the assessee did not file return within the time limit. The Assessing Officer proceeded for best judgment assessment. Notice u/s. 142(1) of the Act along with detailed questionnaire was issued on 14-08-2019 and show cause notice on 24-09-2019. The assessee filed return of income for assessment year 2017-18 on 17-10-2019 which was after the due date for filing return of income as the said date expired on 31-03-2018. Thus, the Assessing Officer treated the return filed on 17-10-2019 as nonest. The assessee society derived total income at nil in their computation sheet after claiming entire gross total income as deduction u/s. Chapter 6A of the Act. The Assessing Officer held that the assessee neither filed the return of Printed from counselvise.com I.T.A No. 837/Ahd/2025 Chiloda Seva Sahakari Mandali Ltd., A.Y. 2017-18 3 income within the time allowed u/s. 139(1) of the Act, nor filed return within the time specified in the notice u/s. 142(1), hence in the absence of filing of return of income within the time limit prescribed under Income Tax Act, no claim of deduction u/s. 80P of the Act is allowed. Thus, the Assessing Officer assessed the total income at Rs.10,48,964/-. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The ld. A.R. submitted that the assessee is a registered co-operative society engaged in providing certain services to its members. The assessee also provides finances to its members at concessional rate of interest as well as provides agricultural products such as seeds, fertilizers etc to the members of the society out of contribution received from the said members. The ld. A.R. submitted that the said co- operative society is administered by appointed committee members. Since the members of the committee do not have much knowledge about filing of ITR and was not properly advised, no ITR for assessment year 2017-18 was filed u/s. 139(1) of the Income Tax Act. The ld. A.R. submitted that in response to notice u/s. 142(1), the assessee filed income tax return and furnished the details. The ld. A.R. submitted that the Assessing Officer disallowed the claim of the deduction made u/s. 80P(2) of the Income Tax Act, thereby observing that the return of income filed are nonest and Printed from counselvise.com I.T.A No. 837/Ahd/2025 Chiloda Seva Sahakari Mandali Ltd., A.Y. 2017-18 4 passed assessment u/s. 144 instead of 143(3) of the Act. The ld. A.R. submitted that the Assessing Officer ignored the fact that section 80A(5) is direct in nature and since the assessee filed return in response to notice u/s. 142(1), the return cannot be treated as mandatory filing of income tax return u/s. 139 wherein section 80AC will apply. The ld. A.R. relied upon following case laws: (i) M/s. Prathamika Krishi Pattina Sahakara Sangha Ltd. vs. ITO –ITA No. 614/Bang/2021 (A.Y. 2017-18) (ii) Krushi Vibhag Karmachari Vrund Sahakari Pat Sanstha Maryadit vs. ITO –ITA No. 182/Nag/2019 (A.Y. 2009-10) (iii) The Wanka Vividh Karyakari Seva Sahakri Mandli Ltd. vs. ITO-ITA No. 470/Srt/2023 (A.Y. 2017-18) (iv) The Gandhinagar District Credit Co-operative Limited. 6. The ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. We have heard both the parties and perused all the relevant material available on record. The assessee has filed income tax return for assessment year 2017-18 in response to notice u/s. 142(1) of the Act as the assessee could not file return of income u/s. 139(1) of the Act. At the time of assessment proceedings while filing the income tax return, the assessee has claimed deduction u/s. 80P(2) of the Act as the assessee has earned interest income from Printed from counselvise.com I.T.A No. 837/Ahd/2025 Chiloda Seva Sahakari Mandali Ltd., A.Y. 2017-18 5 Ahmedabad District Co-operative Bank and thus entitle for the said deduction. Since the assessee has not filed the return u/s. 139(1) within the due date, the Assessing Officer disallowed deduction u/s. 80P of the Act. In the present case, the assessee has filed the return of income before concluding of the assessment proceedings and in response to notice u/s. 142(1) of the Act and thus provisions of section 80A(5) of the Act will come into play. The observation of the Assessing Officer that return u/s. 139 has to be filed within the due date and the said compliance is mandatory will not be applicable in present case as the assessee has filed the return of income during assessment proceedings. The ld. A.R. relied upon the decision of the Tribunal in case of Gandhingar District Co-operative Society Ltd. (supra) wherein the Tribunal held as under: “7. We have heard both the parties and perused all relevant materials on record. At the time of hearing, the assessee has relied upon the decision of Bangalore Tribunal in case of M/s. Parthamika Krishi Pattina Sahakara Sangha Ltd. vs. ITO ITA No. 614/Bang/2021 order dated 13-06-2022 wherein it is pointed out that not filing of income tax return without unintentional delay or not filing of return may be condoned. The provisions of section 80A(5) of the Act will come into play when only the return of income is filed by a assessee and the claim for deduction under chapter VIA of the Act is not claimed in the said return. Since the assessee did not file return of income for assessment year 2017- 18, there was no question of invocating the provisions of section 80A(5) of the Act. The Tribunal has categorically mentioned in para 8 that neither the Assessing Officer nor the CIT(A) examined the conditions for allowing deduction u/s. 80P of the Act while passing the order simply thereby invoking section 80AC is not justifiable. In the present case also, the revenue authorities have not examined the claim of the assessee for deduction u/s. 80P of the Act and therefore it will be appropriate to remand this issue regarding eligibility to claim deduction u/s. 80P of the Act in the sense with regard to the quantum of deduction and also with regard to the other conditions for allowing deduction u/s. 80P of the Act and the Assessing Officer after verifying the same Printed from counselvise.com I.T.A No. 837/Ahd/2025 Chiloda Seva Sahakari Mandali Ltd., A.Y. 2017-18 6 adjudicate as per Income Tax Act. Thus, the appeal of the assessee is partly allowed for statistical purposes.” Thus, in the present case, assessee’s case also facts remain as it is and hence the appeal of the assessee is partly allowed for statistical purpose. 8. In the result, the appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open court on 07-10-2025 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 07/10/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद Printed from counselvise.com "