DayalbaghCooperative Chrome Leather Tanneries Ltd, Agra V. JAO,Ward-2(1)(1), Agra

ITA 164/AGR/2022

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 9054 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-01-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 06-10-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 139; 143(1); 80P; 64

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH ‘SMC’ : AGRA BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCE) ITA No.164/AGR/2022 (Assessment Year: 2018-19) Dayalbagh Cooperative Chrome Leather vs. DCIT, CPC, Tanneries Ltd., Bengaluru. Office Complex, Dayalbagh, Agra – 282 005 (Uttar Pradesh). (PAN : AAAAD0156D) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Sahib P Satsangee, CA REVENUE BY : Shri Shailendra Srivastava, Sr. DR Date of Hearing : 17.01.2024 Date of Order : 24.01.2024 ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the assessee is directed against the order of the ld. CIT (Appeals)/National Faceless Appeal Centre (NFAC) dated 27.09.2022 for the assessment year 2018-19. 2. Grounds of appeal taken by the assessee read as under :- “1. That having regard to facts and circumstances of the case, the learned CIT (Appeals) NFAC has erred in law and on facts in upholding the action of AO (CPC) in disallowing the 2 ITA No.164/AGR/2022 deduction under section 80P within provisions of Part C of Chapter VIA of the Income Tax Act, 1961 treating the return filed by the assessee as ‘belated return’. 2. That having regard to facts and circumstances of the case, the learned CIT (Appeals) NFAC has erred in law and on facts in not appreciating that the accounts of the assessee are required to be audited under section 64 of the U.P. Cooperative Societies Act, 1965 and as such the ‘due date’ of the return fails within Explanation 2(1)(ii) to section 139 (1) of the Income Tax Act, 1961 and the return filed on 01.10.2018 by the assessee was not a ‘belated return’. 3. That having regard to facts and circumstances of the case, the learned CIT (Appeals) NFAC has erred in law and on facts in ignoring that no such adjustment was permissible under section 143(1)(a) of the Income Tax Act, 1961 for the impugned year by AO (CPC), which could be only made from 01.04.2021 as per the substituted section 143(1)(a)(v) by the Finance Act, 2021.” 3. Brief facts of the case are that the assessee is a Co-Operative Society and filed its return of income on 01.10.2018 declaring total income of Rs.Nil after claiming deduction under section 80P of the Income-tax Act, 1961 (for short ‘the Act’) of Rs.74,869/-. Further, the return of income was processed u/s 143(1) of the Act on 31.05.2019, wherein the deduction u/s 80P of the Act of Rs.74,869/- was not allowed and added to the total income of the assessee. 4. Upon assessee’s appeal, ld. CIT (A) elaborately considered the submissions and confirmed the order of AO by concluding as under :- “The scope of an 'intimation' under section 143(1}(a) of the Act, extends to the making of adjustments based upon errors apparent from the return of income and patent from the record. Thus to say that the scope of 'incorrect claim' should be 3 ITA No.164/AGR/2022 circumscribed and restricted by the Explanation which employs the term 'entry' would, in my view, not be correct and the provision must be given full and unfettered play. The explanation cannot curtail or restrict the main thrust or scope of the provision and due weightage as well as meaning has to be attributed to the purposes of section 143(1)(a) of the Act. The provisions of section 80AC(ii) make it clear that any deduction that is claimed under Part C of Chapter VIA would be admissible only if the return of income in that case were filed within the prescribed due date. Thus no claim under any of the provisions of Part C of Chapter VIA would be admissible in the case of a belated return. There is no dispute on this position. The date of filing of a return of income would be apparent on the face of return and upon a perusal thereof, it would be clear as to whether the return is a valid return, having been filed within the statutory time limit, or a belated one. This is mechanical exercise and one that can be carried out by the CPC, very much within the scope of section 143(1)(a)(ii) of the Act. “The conduct of the petitioners is also relevant. Not only have the returns been filed belatedly but the petitioners have also chosen not to co-operate in the conduct of assessment. They are admittedly in receipt of the defect notices from the CPC, but have not bothered to respond to the same. The writ petitions have themselves been filed belatedly and after the elapse of more than six to eight months from the dates of impugned orders, in all cases. It is only when the Revenue has initiated proceedings for recovery by attachment of bank accounts have the petitioners approached this Court. This factor also strengthens my resolve that these are not matters warranting interference in terms of Article under section 226 of the Constitution of India, quite apart from the decision that I have arrived at on the legal issue. These writ petitions are dismissed and connected Miscellaneous Petitions are also closed. W.M.P. Nos.14346, 16166, 16167, 16171, 16225, 16226 of 2020 and 2654 of 2021 have been filed by the Revenue seeking to vacate the stay originally granted by this Court. The MPs do not figure in the main list and I have hence directed that the same be listed today by way 4 ITA No.164/AGR/2022 of a special list. The MPs also stand closed in light of my order as above. No costs.” 5.6 From the perusal of the above judgment it is clear that action taken by the A.O.(CPC) is correct and is well within the powers vested with him u/s143(1)(a) as it involves a simple verification of the fact - whether return along with the audit report has been filed by the due date prescribed or otherwise. Therefore, in consequence of the changes made in Sec. 80AC and the fact of late filing of the audit report by the appellant, I have no other option but to confirm the action of the AO. 5.7 The claim is well covered within the provision of 143(1)(a) as it is a incorrect claim which is in consistent with the requirements required to claim the deduction- the audit report being late. 6. In the result, the Appeal is dismissed.” 5. Against the above order, assessee is in appeal before us. We have heard both the parties and perused the records. 6. We find that the issue here is whether the adjustment done by the CPC under section 143 (1)(a)(v) of the Act is correct or not. Section 143(1)(a)(v) of the Act reads 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:— ....... (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", if] the return is 5 ITA No.164/AGR/2022 furnished beyond the due date specified under sub- section (1) of section 139” 7. It is noted that prior to amendment in deduction u/s 143(1)(a)(v) by Finance Act on 01.04.2021, the disallowance of deduction was limited to sections 10AA, 80IA, 80IAB, 80IB, 80IC, 80ID and 80IE. Thus, the deduction claimed u/s 80P was not mentioned there. Hence, we are of the opinion that ld. CIT (A) has erred in interpreting the amendment. We are of the opinion that assessee is correct in saying that the impugned adjustment by the CPC was not permissible u/s 143(1)(a)(v) of the Act at the extant time. Accordingly, we set aside the orders of the authorities below and decide the issue in favour of the assessee. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on this 24 th day of January, 2024. Sd/- sd/- (ANUBHAV SHARMA) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated the 24 th day of January, 2024 TS Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT (A). 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.