C C 2355 NAMBIAMPALAYAM PRIMARY AGRICULTURAL CO-OPERATIVE CREDIT SOCIETY, TIRUPUR V. DCIT, CPC, BENGALURU

ITA 1003/CHNY/2022

AI Insights

The case involves the Nambiampalayam Primary Agricultural Credit Society, which appealed against the denial of deduction under Section 80P of the Income Tax Act for the Assessment Year 2018-19. The deduction was initially denied by the CPC due to the belated filing of the income tax return. The assessee's subsequent appeals to the Commissioner of Income Tax (Appeals) were dismissed due to an inordinate delay in filing. The Tribunal, however, found merit in the assessee's argument based on a precedent set by a co-ordinate bench in a similar case, which held that the CPC could not adjust the deduction under Section 80P for the specified assessment year, as the relevant provisions allowing such adjustment were not in effect at that time.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133996 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-02-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 27-11-2022
• Other Referred Cases: Chennai Kulalars Co-operative Credit Society Limited vs. DCIT (ITA No.712/Chny/2022)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: FORM 26AS
• Section: 10AA; 80P; 119

Judgement Text

आयकर अपीलीय अिधकरण ‘सी/ एस एम सी’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL ‘C/SMC’ BENCH, CHENNAI माननीय .ी मनोज कु मार अ2वाल ,लेखा सद6 के सम7। BEFORE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.1003/Chny/2022 (िनधा=रण वष= / Assessment Year: 2018-19) CC 2355 Nambiampalayam Primary Agricultural Credit Society Nambiampalayam Post, Mettupalayam Road, Karuvalur Via, Avinashi Taluk, Tiruppur-641 607. बनाम/ V s. DCIT CPC, Bengaluru. थायी लेखा सं./जीआइ आर सं./P AN /GI R No . AAAL C -0 7 7 4 - B (अ पीलाथ /Appellant) : ( थ / Respondent) अपीलाथ की ओरसे/ Appellant by : Mrs. B. Vijayalakshmi (FCA) - Ld. AR थ की ओरसे/Respondent by : Shri Sanat Kumar Raha (Addl. CIT)-Ld. DR सुनवाई की तारीख/Date of Hearing : 20-02-2023 घोषणा की तारीख /Date of Pronouncement : 20-02-2023 आदेश / O R D E R 1. Aforesaid appeal by assessee for Assessment Year (AY) 2018-19 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 22-09-2022 in the matter of an intimation issued by Centralized Processing Center, Bangalore (CPC) on 31-05-2019 denying deduction u/s 80P as claimed by the assessee due to the fact that the return of income was filed belatedly. The registry has noted a delay of 7 days in the appeal which stand condoned. 2. Aggrieved by denial of deduction by CPC, the assessee filed petition u/s 119 before appropriate authority seeking condonation of ITA No.1003/Chny/2022 - 2 - delay. The same was rejected by Ld. Pr. CIT on 28.02.2022 against which the assessee has filed petition before Hon’ble CBDT on 16.03.2022. In the aforesaid background, the assessee preferred further appeal against impugned intimation before Ld. CIT(A) on 18.04.2022. However, Ld. CIT(A) held that there was inordinate delay of 1023 days and there was no sufficient cause before assessee to seek condonation of delay. Even after excluding the Covid-19 period from 15.03.2020 to 28.02.2022 as directed by Hon’ble Supreme Court, there was delay of 307 days. Accordingly, the appeal was dismissed in limine, as not admitted. Aggrieved as aforesaid, the assessee is in further appeal before us. 3. From the above stated facts, I find that the assessee was pursuing alternative remedy before lower authorities and there was effective delay of 307 days only after excluding Covid-19 delay. Accordingly, the delay ought to have been condoned by Ld. CIT(A). Nevertheless, I find that this issue, on merits, stand covered in assessee’s favor by the decision of co-ordinate bench of this Tribunal in Chennai Kulalars Co-operative Credit Society Limited vs. DCIT (ITA No.712/Chny/2022) for AY 2018-19 as under: - 3. The relevant provisions of Section 143(1)(a) prescribing processing of return of income (as amended by Finance Act, 2018), as applicable to AY 2018- 19, 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) 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) of section 139; ITA No.1003/Chny/2022 - 3 - (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 under sections 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- j 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: It could be seen that sub-clause (v) covers only specified Sections and do not cover Sec.80P. In other words, no adjustment of deduction claimed u/s 80P could have been made while processing the return of income. 4. The sub-clause (v) has been amended by Finance Act, 2021 and the amended sub-clause read as under: - ...... (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", ifthe return is furnished beyond the due date specified under sub-section (1) of section 139: or ....... Section 80P fall under Chapter VI-A under the heading “C-Deductions in respect of certain incomes”. The rational for the amendment, as given in the memorandum explaining the provisions in the Finance Bill, 2021 is as under: - Rationalisation of the provision relating to processing of returned income and issuance of notice under sub-section (2) of section 143 of the Act. The existing provisions of clause (a) of sub-section (1) of section 143 of the Act provides that at the time of processing of return of income made under section 139, or in response to a notice under sub-section (1) of section 142, the total income or loss shall be computed after making the adjustments specified in clauses (i) to (vi) therein. It is proposed to amend the following provisions of sub-section (1) of section 143 of the Act,- (i) Amend sub-clause (iv) of clause (a) of sub-section (1) of the section 143 of the Act, to allow for the adjustment on account of increase in income indicated in the audit report but not taken into account in computing the total income. (ii) Amend sub-clause (v) of clause (a) of sub-section (1) of the section 143 of the Act so as to give consequential effect to amendment carried out in section 80 AC vide Finance Act, 2018. (iii) Amend the provisions of section 143 to reduce the time limit for sending intimation under sub-section (1) of section 143 of the Act from one year to nine months from the end of the financial year in which the return was furnished. Consequently, it is also proposed to reduce the time limit for issue of notice under sub-section (2) of section 143 of the Act from six months to three months from the end of the financial year in which the return is furnished. These amendments will take effect from 1 st April, 2021 5. It could thus be seen that the enabling provisions allowing specified adjustment for Sec. 80P u/s 143(1)(a) has been brought on statute only with effect from 01.04.2021 and before that no such adjustment of deduction u/s 80P could have been done by the CPC u/s 143(1)(a) even if the return of income was filed ITA No.1003/Chny/2022 - 4 - beyond due date as specified u/s 139(1). No doubt, the provisions of Sec.80AC mandate denial of deduction u/s 80P even for AY 2018-19. However, in our considered opinion, without there being corresponding enabling provisions u/s 143(1)(a), no such adjustment could have been made by CPC for AY 2018-19. The same is amply clear from the memorandum explaining the provisions in the Finance Bill, 2021 as extracted above. Considering the same, we direct revenue to grant deduction u/s 80P as claimed by the assessee in the return of income. No other ground has been urged before us. 6. The appeal stand partly allowed. I find that similar facts exist before me. In the absence of any contrary decision and respectfully following the view of co-ordinate bench, I direct Ld. AO grant impugned deduction to the assessee. 4. The appeal stand allowed. Order pronounced on 20 th February, 2023. Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद6 / ACCOUNTANT MEMBER चे)ई / Chennai; िदनांक / Dated : 20-02-2023 EDN/- आदेश की Qितिलिप अ 2ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. यथ /Respondent 3. िवभागीय ितिनिध/DR 5. गाड फाईल/GF