AVANTIKA BUNKAR SAHKARI SAMIITI MARYADIT , CHANDERI V. DCIT CPC, BANGLORE

ITA 208/Ind/2021

AI Insights

The case involves Avantika Bunkar Sahakari Samiti, a cooperative society of weavers, which appealed against the order of the Commissioner of Income Tax (Appeals) confirming the disallowance of a deduction claimed under section 80P due to the late filing of their income tax return for the assessment year 2018-19. The society argued that the return was filed late due to delays in auditing their accounts, and that the disallowance of the deduction was not permissible under the law as it stood before the amendment on April 1, 2021. The Tribunal examined the legal provisions and precedents, noting that the amendment allowing for such disallowance was not applicable to the assessment year in question, and thus, the deduction should be allowed.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131036 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-03-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 02-11-2021
• Other Referred Cases: Shri Nava Ujala Seva Sahakari Mandali Ltd. vs. DCIT/ ACIT (CPC), Lanjani Co-operative Agri Service Society Ltd. vs. DCIT (CPC), Medi Seva Sahakari Mandli Ltd. vs. ADIT (CPC), Aliudepur Seva Sahakari Mandli Ltd. & Others vs. ADIT (CPC), The Khedbrahma Taluka Primary Teachers Co-op. Credit Society Ltd. vs. ADIT (CPC), Sri Kodandaramaswamy Primary Agricultural Co-operative Society Ltd. vs. Income Tax Officer, Ward-2, Trustees of Tulsidas Gopalji Charitable and Chaleshwar Temple Trust vs. Commissioner of Income Tax, Income Tax Officer-3(4) vs. M/s. Uma Developers, Late Hussein Ismail Dawoodani vs. DCIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return
• Section: 148; 142(1); 143(1); 80P; 207; 139(1); 139(4)

Judgement Text

Page 1 of 9 आयकरअपील यअ धकरण, इ दौर यायपीठ, इ दौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA No.208/Ind/2021 (Assessment Year:2018-19) Avantika Bunkar Sahakari Samiti Maryadit Malan Kho Road Chanderi Ashoknagar Vs. DCIT CPC (Appellant / Assessee) (Respondent/ Revenue) PAN: AAFAA9914 R Assessee by Shri Anil Kamal Garg, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 02.03.2023 Date of Pronouncement 12.05.2023 O R D E R This appeal by the assessee is directed against the order dated 03.09.2021 of Commissioner of Income Tax(Appeal), National Faceless appeal Centre, Delhi for Assessment Year 2018-19. The assessee has raised following grounds of appeal: ITA No. 208/Ind/2021 Avantika Bunkar Sahakari Samiti Page 2 of 9 Page 2 of 9 ITA No. 208/Ind/2021 Avantika Bunkar Sahakari Samiti Page 3 of 9 Page 3 of 9 ITA No. 208/Ind/2021 Avantika Bunkar Sahakari Samiti Page 4 of 9 Page 4 of 9 ITA No. 208/Ind/2021 Avantika Bunkar Sahakari Samiti Page 5 of 9 Page 5 of 9 2. The assessee is a Co-operative Society of weavers registered under the Co-operative Society Act with Deputy Registrar Co-operative Society, Guna vide registration dated 30.09.2003. There are 56 members of the assessee Cooperative Society who are manufactures of handmade Chanderi Saree on handloom which falls in the cottage industry. The assesse filed its return of income on 21.12.2018 in response to the notice issued by the ITO dated 24.07.2018 for filing the return of income with late fee u/s 234F. The assessee declared nil income in the return of income after claiming deduction u/s 80P for a sum of Rs.8,46,630/-. The return of income was processed u/s 143(1) by the CPC whereby an adjustment was made on account of disallowance of the claim of deduction u/s 80P due to late filing of the return. The assessee challenged the action of the AO before the Ld. CIT(A) and submitted that the delay in filing the return of income is due to delay in audit of the accounts of the assessee by the office of Commissioner of Auditor Cooperative society. The CIT(A) dismissed the appeal of the assessee and confirmed the adjustment made by the CPC by considering the fact that there is a delay in filing the return of income. 3. Before Tribunal the Ld. AR of the assessee has submitted that the return of income filed by the assesse u/s 139(4) is to be considered u/s 139(1) of the Act when the assessee has already paid the late fee for filing return u/s 234F. Further Ld. AR has submitted that claim of deduction u/s 80P cannot be disallowed while processing the return of income u/s 143(1)(a)(v) of the Act. The amendment in the provision of section 143(1) has been made w.e.f. 01.04.2021 enabling the AO/CPC to make such disallowance and adjustment on account of delay in filing the return of income and therefore prior to the said amendment it is beyond the scope ITA No. 208/Ind/2021 Avantika Bunkar Sahakari Samiti Page 6 of 9 Page 6 of 9 of provision of section 143(1)(a) to disallow the claim of deduction u/s 80P on the ground of delay in filing return of income. In support of his contention he has relied upon the following decisions: 1.Shri Nava Ujala Seva Sahakari Mandali Ltd. vs. DCIT/ ACIT (CPC) 2022 (11) TMI 128 (ITAT Rajkot) 2. Lanjani Co-operative Agri Service Society Ltd. vs. DCIT (CPC) (2023) 146 taxmann.com 468 (Chandigarh-Trib.) 3. Medi Seva Sahakari Mandli Ltd. vs. ADIT (CPC) (2023) 146 taxmann.com 3 (Rajkot-Trib.) 4. Aliudepur Seva Sahakari Mandli Ltd. & Others vs. ADIT (CPC) 2023 (2) TMI 1115 (ITAT Rajkot) 5. The Khedbrahma Taluka Primary Teachers Co-op. Credit Society Ltd. vs. ADIT (CPC) 2023 (2) TMI 749 (ITAT Ahmedabad) 6. Sri Kodandaramaswamy Primary Agricultural Co-operative Society Ltd. vs. Income Tax Officer, Ward-2 2023 (1) TMI 572 (ITAT Hyderabad) 7. Trustees of Tulsidas Gopalji Charitable and Chaleshwar Temple Trust vs. Commissioner of Income Tax (1994) 207 ITR 368 (Bombay High Court) 8.Income Tax Officer-3(4) vs. M/s. Uma Developers 2016 (9) TMI 992 (ITAT Mumbai) 9.Late Hussein Ismail Dawoodani vs. DCIT 2018 (11) TMI 1885 (ITAT Mumbai) 4. The Ld. AR of the assessee has submitted that when the assessee society is eligible for deduction u/s 80P in view of the CBDT Circular No.722 dated 19.09.1995 then the said claim of deduction cannot be disallowed while processing the return of income u/s143(1) for the year under consideration. 5. On the other hand, Ld. DR has submitted that there is no dispute that the assessee has filed the return belatedly and not on or before due date of filing the return u/s139(1) of the Act, consequently, the deduction claimed u/s 80P is not allowable. He has relied upon the orders of lower authorities. ITA No. 208/Ind/2021 Avantika Bunkar Sahakari Samiti Page 7 of 9 Page 7 of 9 6. I have considered the rival submission as well as relevant material on record. The only controversy in this appeal is denying the claim of deduction u/s 80P of the Act while processing the return of income u/s 143(1) by the CPC on the ground that the assessee has filed the return beyond the due date of filing the return of income u/s 139(1) of the Act. 7. It is pertinent to note that by virtue of the amendment of section 143(1)(a)(v) by Finance Act 2021 w.e.f. 01.04.2021 the disallowance of deduction claimed u/s 10-AA, 80-IA, 80-IB, 80-IC, 80-ID or 80-IE has been substituted as deduction claimed under any of the provision of chapter VIA, under heading (C) “deduction in respect of certain incomes”. Therefore prior to this amendment the deduction u/s 80P was not required to be disallowed while processing return of income u/s 143(1)(a) of the Act due to the filing of return beyond the due date prescribed u/s 139(1) of the Act. 8. After this amendment of sub-clause (v) the deduction under chapter VIA and under heading (C) can be disallowed while processing the return of income. Hence the enabling amendment to disallow the claim of deduction u/s 80P of the Act was brought in sub-clause (v) of section 143(1)(a) only w.e.f. 01.04.2021. This issue has been considered in a series of decision by the Coordinate Benches of this tribunal. In case of Shri Nava Ujala Seva Sahakari Mandali ltd. vs. The DCIT/ACIT (supra) the Rajkot Benches of this Tribunal has held in para 7 to 7.4 as under: “7.1 A joint reading of the above provisions makes it evident that the claim of deduction under section 80P of the Act cannot be allowed the assessee, if the assessee does not file its return of income within the due date stipulated under section 139(1) of the Act w.e.f. assessment year 2018-19 onwards. However, we also note that amendment has been introduced in section 143(1)(a)(v) of the Act to provide that the claim of deduction under section 80P of the Act can be denied to the assessee, in case the assessee does not file its return of income within the time prescribed under section 139(1) of the Act with effect from 01-04-2021 and does not apply to the impugned assessment year i.e. assessment year 2019-20 relevant to financial year 2018- 19. Accordingly, in our considered view, denial of claim under section 80P of the Act would not come within the purview of prima facie ITA No. 208/Ind/2021 Avantika Bunkar Sahakari Samiti Page 8 of 9 Page 8 of 9 adjustment under section 143(1)(a)(v) of the Act, for the simple reason that the section was not in force during the period under consideration i.e. assessment year 2019-20. 7.2 The second issue for consideration is that whether the case of the assessee would fall within the purview of prima facie adjustment under section 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return). In our view, the scope of the adjustments that can be made under the said provision has been elaborated in the Explanation to the aforesaid section, which does not include denial of deduction claimed by the assessee in case the assessee does not furnish its return of income within the date stipulated under section 139(1) of the Act. The Explanation to the said section specifically provides for cases/instances when the claim made by the assessee could be said to be “incorrect”. Therefore, in our considered view, the case of the assessee would also not fall within the purview of prima facie adjustment under section 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return). We also observe that the counsel for the assessee has filed copies of orders passed by Commissioner (Appeals), NFAC in many other cases of cooperative societies having similar issues, in which it has been held that section 143(1)(a)(ii) of the Act does not deal with disallowance of deduction for deed filing of return of income and also the said adjustment is not permissible under section 143(1)(a)(v) of the Act. 7.3 We note that in the case of Chirakkal Service Co-Operative Bank Ltd. Kannur v. CIT 2016] 68 taxmann.com 298 (Kerala), the Kerala High Court held that a return filed by assessee beyond period stipulated under section 139(1) or 139(4) or under section 142(1) or section 148 can also be accepted and acted upon for entertaining claim raised under section 80P provided further proceedings in relation to such assessments are pending in statutory hierarchy of adjudication in terms of provisions of Act. In the case of ASR Engg. & Projects Ltd. [2019] 111 taxmann.com 49 (Hyderabad - Trib.), the ITAT held that to be eligible to make claim under section 80-IA or any other section of Chapter VI A, assessee should have filed return of income under section 139(1) and even if it did not make claim for deduction in original return and subsequently file revised return making such claim, its claim for deduction under section 80-IA is maintainable. Therefore, where assessee had filed return under section 139(1), it was entitled to claim deduction under section 80-IA even if such claim was not made in original return but subsequently in revised return filed in response to notice issued under section 153A. 7.4 We note that the instant case, there was a few-month delay in filing the return of income by the assessee for the assessment year 2019-20 and return of income was filed within due date permissible u/s 139(4) of the Act, in which the claim for deduction u/s 80P of the Act was made. Therefore, looking into the totality of facts, we are of the view that claim of deduction u/s 80P of the Act cannot be denied to the assessee only on the basis that the assessee did not file return of income its return ITA No. 208/Ind/2021 Avantika Bunkar Sahakari Samiti Page 9 of 9 Page 9 of 9 of income within due date u/s 139(1) of the Act , in light of the discussion and judicial precedents highlighted above. Therefore, in the interests of justice, we are restoring the case to the file of the Ld. CIT(Appeals) for fresh adjudication on merits of the case after giving due opportunity of hearing to the assessee.” 9. Similar view has been taken by Chandigarh Benches of this Tribunal in case of Lanjani Co-operative Agri Service Society Ltd. vs. DCIT (supra) and in other decisions relied upon by the Ld. AR of the assesse. A consistent view has been taken by this tribunal in a series of decisions. To maintain Rule of consistency, I follow the earlier decisions of this Tribunal and decided this issue in favour of the assessee. Accordingly, the adjustment made on account of the deduction claimed u/s 80P by the CPC while processing the return of income u/s 143(1)(a) for the year under consideration is deleted and claim of the assesse is allowed. 10. In the result, appeal of assessee is allowed. Order pronounced in the open court on 12.05.2023. Sd/- (VIJAY PAL RAO) JUDICIAL MEMBER Indore, 12.05.2023 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore