AI Insights
The case involves M/s. Ponneri Urban Cooperative Credit Society Limited, which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The dispute centered on the denial of deduction under section 80P of the Income Tax Act, 1961, due to the non-submission of an audit report along with the income tax return for the assessment year 2019-2020. The Assessing Officer initially found the return defective and requested rectification, which the assessee failed to comply with. Consequently, the deduction was denied, and the total income was assessed. The Tribunal, after considering the submissions and the circumstances, decided to give the assessee another opportunity to submit the required audit report.
Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 135356 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
09-03-2023
Appeal Filed By
Assessee
Order Result
PartlyAllowed
Bench Allotted
B
Next Hearing Date
26-02-2023
Assessment Year
2019-2020
Appeal Filed On
20-12-2022
Judgement Text
आयकर अपीलीय अिधकरण, ’बी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI ŵी वी दुगाŊ राव Ɋाियक सद˟ एवं ŵी जी. मंजुनाथा, लेखा सद˟ के समƗ Before Shri V. Durga Rao, Judicial Member & Shri G. Manjunatha, Accountant Member आयकर अपील सं./I.T.A. No.1098/Chny/2022 िनधाŊरण वषŊ/Assessment Year: 2019-2020 M/s. Ponneri Urban Cooperative Credit Society Limited JJ 64, No. 5, Neeli Appadurai Mudali Street, Ponneri, Tiruvallur 601 204, Tamil Nadu. [PAN:AAIAP2474N] Vs. The Assistant Director of Income Tax, Central Processing Centre, Bangalore. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri B. Suresh, C.A. ŮȑथŎ की ओर से/Respondent by : Shri D. Hema Bhupal, JCIT सुनवाई की तारीख/ Date of hearing : 27.02.2023 घोषणा की तारीख /Date of Pronouncement : 10.03.2023 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi, dated 01.12.2022 relevant to the assessment year 2019-2020. 2. Facts are, in brief, that the assessee is a credit cooperative society engaged in the business of extending credit facilities to its members. The I.T.A. No.1098/Chny/22 2 assessee filed its return of income for the year under consideration on 25.09.2020 admitting NIL income after claiming deduction under section 80P of the Income Tax Act, 1961 [“Act” in short]. The Assessing Officer, CPC, Bangalore noticed that the assessee has not filed audit report along with return and issued notice to the assessee to rectify the defect. However, the assessee has not responded. The Assessing Officer, CPC, Bangalore passed assessment order under section 143(1) of the Act dated 21.12.2021 by denying the claim of deduction under section 80P of the Act and the total income was assessed at ₹.63,90,264/-. 3. The assessee carried the matter in appeal before the ld. CIT(A) and submitted that once it is noticed that the return filed by the assessee is defective, the Assessing Officer, CPC, Bangalore ought not to have acted upon and therefore, the order passed by the Assessing Officer is not valid. By considering the submissions of the assessee, the ld. CIT(A) has noted that though the return was treated as an invalid return, the provisions of the Act shall apply as if the assessee has failed to furnish the return, which means, the benefit of deduction has to be withdrawn as the audit report was not furnished along with the return of income. Accordingly, the ld. CIT(A) upheld the order passed by the Assessing Officer. I.T.A. No.1098/Chny/22 3 4. On being aggrieved, the assessee is in appeal before the Tribunal. Before us, the ld. Counsel for the assessee has reiterated the submissions, which he has made before the ld. CIT(A). 5. On the other hand, the ld. DR strongly supported the order passed by the authorities below. 6. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In this case, the assessee filed its return of income by claiming deduction under section 80P of the Act without filing audit report along with the return of income. The Assessing Officer, CPC, Bangalore found that the return filed without audit report is defective and directed the assessee to rectify the defect i.e, to file audit report. The assessee has not rectified the defect. Thus, by denying the claim of deduction under section 80P of the Act, the Assessing Officer, CPC, Bangalore passed the assessment order under section 143(1) of the Act dated 21.12.2021. The argument of the assessee before the ld. CIT(A) and even before us is that when the Assessing Officer, CPC, Bangalore came to a conclusion that the return filed by the assessee is defective, he ought not to have acted upon and the denial of benefit of deduction under section 80P of the Act is invalid. By considering the entire facts and circumstances of the case and also I.T.A. No.1098/Chny/22 4 the submissions of the assessee, we are of the opinion that to claim benefit under section 80P of the Act, the assessee has to file audit report. In this case, the assessee has failed to file the audit report and for that reason, the Assessing Officer, CPC, Bangalore denied the claim of deduction under section 80P of the Act. In our opinion, one more opportunity shall be given to the assessee to file the audit report before the Assessing Officer, CPC, Bangalore and accordingly, we set aside the order passed by the ld. CIT(A) and remit the matter back to the file of the Assessing Officer for affording one more opportunity to the assessee to furnish the audit report and decide the matter afresh in accordance with law. The assessee is also directed to file the audit report before the Assessing Officer, CPC, Bangalore for his consideration. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 10 th March, 2023 at Chennai. Sd/- Sd/- (G. MANJUNATHA) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER Chennai, Dated, 10.03.2023 Vm/- I.T.A. No.1098/Chny/22 5 आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ (अपील)/CIT(A), 4. आयकर आयुƅ/CIT, 5. िवभागीय Ůितिनिध/DR & 6. गाडŊ फाईल/GF.
