CHUNAKHALI SAMABAY KRISHI UNNAYAN SAMITY LTD.,BERHAMPORE, MURSHIDABAD V. I.T.O., WARD - 56(3), MURSHIDABAD

ITA 943/KOL/2025

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Chunakhali Samabay Krishi Unnayan Samity Ltd., a cooperative society engaged in agricultural activities, appealed against the order of the Addl/JCIT(A)-9, Delhi, which had disallowed a deduction claimed under section 80P of the Income Tax Act in the intimation under section 143(1)(a). The society argued that the disallowance was made without issuing a show cause notice and was contrary to the facts and law. The Tribunal examined similar cases and precedents, noting that the power to disallow such deductions under section 143(1)(a) was only applicable from the assessment year 2021-22 onwards, following amendments made by the Finance Act, 2021. Consequently, the Tribunal set aside the CIT(A)'s order and allowed the deduction as claimed by the society.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791274 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Appeal Filed On: 01-05-2025
• Other Referred Cases: Panisheola Samabay Krishi Unnayan Samity Limited vs. Deputy Commissioner of Income Tax, Circle 4(2), Kolkata, Bisharpara Kodalia Coop. Credit Society Ltd. Vs. Income Tax Officer, Ward 49(2), Kolkata, The Commercial Taxes Directorate Employees Co Op. Credit Society Limited Vs. ADIT, CPC, Bangalore
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard
• Section: 143(3); 10AA

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA Before SHRI SONJOY SARMA, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No.: 943/KOL/2025 Assessment Year: 2020-21 Chunakhali Samabay Krishi Unnayan Samity Ltd. Vs. I.T.O., Ward-56(3), Murshidabad (Appellant) (Respondent) PAN: AAATC5443M Appearances: Assessee represented by : None. Department represented by : Pampa Ray, Sr. DR, JCIT. Date of concluding the hearing : 02-December-2025 Date of pronouncing the order : 08-December-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Addl/JCIT(A)-9, Delhi [hereinafter referred to as Ld. ‘Addl/JCIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2020-21 dated 04.03.2025. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1. That on the facts and in the circumstances of the case, the Ld. AddI/JT. CIT(A) erred in passing the order without considering the facts of the case and thereby, erred in not allowing the deduction claimed u/s.80P, which was wrongly added in the intimation u/s.143(1)(a) without issuing any show cause notice and thus the income assessed was contrary to the facts and law. 2. That on the facts and in the circumstances of the case, the Ld. Addl./Jt. CIT(A) erred in not considering the statement of facts and the submissions made in course of the appeal proceedings and erred in sustaining the Printed from counselvise.com Page | 2 ITA No.: 943/KOL/2025 Assessment Year: 2020-21 Chunakhali Samabay Krishi Unnayan Samity Ltd. disallowance claimed in the return of income, which was arbitrary and lawful. 3. That on the facts and in the circumstances of the case, the Ld. Addl./Jt. CIT(A) failed to adjudicate upon the order passed u/s.143(1) in its proper perspective 4. That the appellant craves leave to urge such other ground or grounds before or at the time of hearing of appeal.” 3. Brief facts of the case are that the assessee is a co-operative society formed by the cultivators for the benefit of its members for marketing of agricultural produce grow by its members and purchase of agricultural seeds, live stocks for the purpose of supplies the same to its members. The assessee claims to maintain proper books of accounts and the same are audited by the Auditor of the Co-operative Societies and the same claim to be checked and duly certified by a chartered account as per provisions of Tax Audit. The assessee derived income from interest on loan to its members and interest on Fixed deposit. Return of income was duly submitted claiming deduction u/s 80P and the total taxable income was show at Nil. The learned A.O. CPC passed an order u/s 143(1) on a total income of Rs. 2,73,300.00 without affording any reasonable opportunity of being heard to the assessee, it was claimed before the Ld. CIT(A). Aggrieved with the intimation under section 143(1) of the Act, the assessee filed an appeal before the Ld. CIT(A) who noted that an updated return was filed, examined the provisions relating to the updated return of income, the provision of section 80AC and dismissed the appeal of the assessee. 4. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 5. Rival submissions were heard and the record and the submissions made have been examined. It was submitted by the the Ld. AR that the Printed from counselvise.com Page | 3 ITA No.: 943/KOL/2025 Assessment Year: 2020-21 Chunakhali Samabay Krishi Unnayan Samity Ltd. deduction claimed under section 80P of the Act could not have been disallowed as it was not part of the prima facie adjustment and the amendment in this regard in section 143(1)(a) was introduced with effect from 01/04/2021 which is applicable for assessment year 2021– 22 and not for the AY 2020-21. The Ld. DR relied upon the order of the appellate authority and requested that the same may be confirmed. 6. We have considered the submissions made. Similar issue arose in the case of Panisheola Samabay Krishi Unnayan Samity Limited vs. Deputy Commissioner of Income Tax, Circle 4(2), Kolkata [ ITA No. 1181/Kol/2024 for the Assessment Year 2019-20] order dated 14.10.2024 and it has been held that the provisions relating to Chapter VI-A adjustments are applicable from 01.04.2021 and prior to that there was no power available to the Ld. AO to disallow the claim under the head “C.- Deductions in respect of certain incomes” under section 80P of Chapter VI-A of the Act. The relevant extract from the order is as under: “4. During the course of the hearing, it was submitted by the Ld. AR that the amendment in sub-clause (v) of Section 143(1)(a) of the Act which has substituted “sections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or section 80- IE, if” with “sections 10AA or under any of the provisions of Chapter VI-A under the headings “C.- Deductions in respect of certain incomes”, if” was inserted by the Finance Act, 2021 w.e.f. 01.04.2021. The Ld. AR also relied upon the decision of the coordinate Benches of the Tribunal in the cases of Bisharpara Kodalia Coop. Credit Society Ltd. Vs. Income Tax Officer, Ward 49(2), Kolkata, ITA No. 1248/Kol/2023, AY 2018-19, dated 06.02.2024 and The Commercial Taxes Directorate Employees Co Op. Credit Society Limited Vs. ADIT, CPC, Bangalore, ITA No. 204/Kol/2024, AY 2020-21, dated 19.04.2024. The Ld. Sr. DR relied upon the order of the Addl./JCIT(A). 5. We have heard the rival contentions and perused the material available on record. A perusal of the relevant provision shows that the power to make disallowance of deduction under the head “C.- Deductions in respect of certain incomes” under section 80P of Chapter VIA while processing the Printed from counselvise.com Page | 4 ITA No.: 943/KOL/2025 Assessment Year: 2020-21 Chunakhali Samabay Krishi Unnayan Samity Ltd. return u/s 143(1) has been given to the assessing officer only by the Finance Act, 2021 with effect from 01.04.2021. Prior to that there was no power available with the Ld. AO to disallow the claim made under head “C.- Deductions in respect of certain incomes” under Chapter VI-A of the Act. Similar issue also came up in the case of Bisharpara Kodalia Coop. Credit Society Ltd. Vs. Income Tax Officer, Ward 49(2), Kolkata (supra) in which the coordinate Bench has held as under: 4. We have heard rival submissions and have gone through the record placed before us. We notice that the assessee is a Co-operative Society engaged in the business of providing credit to its members. The assessee is required under law to get its account audited under the rules and regulations of West Bengal Cooperative Societies Act, 2006 by the auditor appointed by Directorate of Cooperative Societies. For the AY 2018-19 due date for filing the return was 30.09.2018. However, the return was submitted on 25.11.2018. 5. We note that the Central Processing Centre denied the deduction u/s. 80P of the Act solely for the reason that return was not filed within the due date. Provisions of section 143(1)(a)(v) provides that - “(v) disallowance of deduction claimed under section 10AA or under any of the provisions of Chapter VIA under the heading “C - Deductions in respect of certain incomes”, if the return is furnished beyond the due date specified under subsection (1) of section 139;” 5.1. In the above provision, an amendment brought is in by Finance Act from 01.04.2021 w.e.f. 1.4.21 and before such amendment in place of the phrase section 10A or in any of the provisions of Chapter VIA under the head e - the words “deductions in respect of certain income, previously which was provided as section 10AA, 80IA, 80IB, 80IC, 80ID or section 80IE of the Act were appearing.” 6. From perusal of the said amendment, we note that before 01.04.2021 there was no mechanism for the CPC to prima facie disallow the claim u/s. 80P of the Act. It was only from 01.04.2021 that such powers have been conferred with the CPC to make prima facie disallowance in case of the claim made u/s 10AA or deduction claimed under any of the provisions in Chapter VIA which, inter alia, includes 80P of the Act. 7. We note that section 80AC of the Act puts a bar against claiming of deduction in respect of certain income provided under the head (C) Printed from counselvise.com Page | 5 ITA No.: 943/KOL/2025 Assessment Year: 2020-21 Chunakhali Samabay Krishi Unnayan Samity Ltd. of Chapter VIA which includes section 80P of the Act also if the return of income are not filed before the due date prescribed u/s. 139(1) of the Act. Had it been a case of scrutiny proceeding u/s. 143(3) of the Act, the situation certainly would have been against the assessee subject to the approval by the authorities for condonation of delay in filing the return. However, before us, the issue is regarding prima facie adjustment made u/s. 143(1)(a)(v) of the Act and as discussed above, such power of making the prima facie adjustment towards deduction u/s. 80P of the Act came to CPC only from 1.4.2021 and thus, the alleged disallowance by CPC is beyond its jurisdiction. Therefore, the assessee deserves relief. We are thus inclined to hold that the Ld. CIT(A) erred in denying the deduction u/s 80P of the Act for Rs.19,42,264/-. We, therefore, set aside the order of the Ld. CIT(A) and allow the grounds of appeal raised by the assessee for the claim of deduction u/s. 80P of the Act at Rs.19,42,264/-. 6. Therefore, respectfully following the decision of the co-ordinate Bench, on facts of the case which are identical to the cases relied upon by the Ld. AR, the Ld. AO was not justified in disallowing the claim for deduction u/s 80P while making prima facie adjustments u/s 143(1)(a)(v) of the Act as the amended provisions were not available for the impugned assessment year and no such adjustment was legally permissible. Section 80AC could have been invoked in the assessment u/s 143(3) of the Act only. Hence, the Ld. AO is directed to delete the disallowance made in the intimation u/s 143(1) of the Act and allow the deduction u/s 80P of the Act as per law. Thus, Ground Nos. 1 to 6 are allowed. 7. In the result, the appeal of the assessee is allowed.” 7. Thus, respectfully following the decision in the case of Panisheola Samabay Krishi Unnayan Samity Limited (supra), we hereby hold that for the impugned AY 2020-21 as per provisions of section 80-AC of the Act the disallowance u/s 80P of the Act could have been made only in the course of the scrutiny assessment but not in the course of processing of return u/s 143(1) of the Act. Therefore, the Ground nos. 1,2,3 & 4 are allowed and the Ld. AO is directed to delete the addition made and allow the claim of deduction u/s 80P of the Act made by the assessee. Printed from counselvise.com Page | 6 ITA No.: 943/KOL/2025 Assessment Year: 2020-21 Chunakhali Samabay Krishi Unnayan Samity Ltd. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 8th December, 2025. Sd/- Sd/- [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 08.12.2025 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 7 ITA No.: 943/KOL/2025 Assessment Year: 2020-21 Chunakhali Samabay Krishi Unnayan Samity Ltd. Copy of the order forwarded to: 1. Chunakhali Samabay Krishi Unnayan Samity Ltd., Chunakhali, Gopinatpur, Berhampore, Murshidabad, West Bengal, 742225. 2. I.T.O., Ward-56(3), Murshidabad. 3. Addl/JCIT(A)-9, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "