AI Insights
The case involves Sagara Vikasa Mutually Aided Coop Thrift Society Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) regarding the disallowance of a deduction claimed under section 80P of the Income Tax Act, 1961. The deduction was initially disallowed because the society filed its return beyond the due date specified under section 139(1) of the Act. The Tribunal considered arguments about the applicability of section 139(4) as an extension of section 139(1) and the scope of adjustments permissible under section 143(1). The Tribunal found that the specific provision cited by the Assessing Officer for disallowance was not applicable as it was introduced in a later assessment year.
Appeal Details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 135976 (ITAT-VISAKHAPATNAM)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 28 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-03-2023
Appeal Filed By
Assessee
Order Result
PartlyAllowed
Bench Allotted
SMC
Next Hearing Date
20-03-2023
Assessment Year
2018-2019
Appeal Filed On
30-11-2022
Judgement Text
आयकरअपीलीयअधिकरण, धिशाखापटणम “एसएमसी”पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER आयकर अपील सं./I.T.A.No.235/Viz/2022 (ननधधारण वर्ा / Assessment Year : 2018-19) Sagara Vikasa Mutually Aided Coop Thrift Society Ltd., Opp. Sun School Near Vuda Layout, Bheemunipatnam Visakhapatnam [PAN : AACAS9620H] Vs. Income Tax Officer Ward-2(1) Visakhapatnam (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri G.V.N.Hari, AR प्रत्यधथी की ओर से / Respondent by : Shri O.N.Hari Prasada Rao, DR सुनवधई की तधरीख / Date of Hearing : 21.03.2023 घोर्णध की तधरीख/Date of Pronouncement : 29.03.2023 आदेश /O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi vide DIN & Order No.ITBA/NFAC/S/250/2022-23/1046186894(1) dated 06.10.2022 for the Assessment Year (A.Y.) 2018-19. 2 I.T.A. No.235/Viz/2022, A.Y.2018-19 Sagara Vikasa Mutually aided Coop Thrift Society Ltd., Visakhapatnam 2. Brief facts of the case are that the assessee is a cooperative society, filed it’s return of income for the A.Y.2018-19 on 25.03.2019 beyond the due date, 31.08.2018 u/s 139 of the Income Tax Act, 1961 (in short “Act”) and claimed deduction u/s 80P of the Act. The return was processed by the CPC on 25.06.2019 and the deduction claimed u/s 80P was disallowed as the return was filed beyond the due date specified u/s 139(1) of the Act. 3. On being aggrieved, the assessee preferred an appeal before the CIT(A). The CIT(A) held that in order to claim deduction u/s 80P of the Act, the assessee was required to file it’s return of income within the time specified u/s 139(1) of the Act, which he failed to do so. The CIT(A) dismissed the appeal of the assessee, holding that the decision of Hon’ble Bombay High Court relied by the assessee in the case of Trustees of Tulsidas Gopalji 207 ITR 368 is in relation to allowability of exemption u/s 11 of the Act which does not come under part-C of Chapter VI and hence, not applicable. 4. On being aggrieved, the assessee preferred an appeal before the Tribunal and raised the following grounds : 3 I.T.A. No.235/Viz/2022, A.Y.2018-19 Sagara Vikasa Mutually aided Coop Thrift Society Ltd., Visakhapatnam 1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) ought to have held that the adjustment of disallowance of deduction u/s 80P of the Act made in the Intimation u/s 143(1) of the Act is beyond the scope of permissible adjustments and consequently the learned Commissioner of Income Tax (Appeals) ought to have directed the assessing officer to rectify the Intimation. 3. Without prejudice to the above, the learned Commissioner of Income Tax (Appeals) ought to have directed the assessing officer to allow the deduction of Rs.13,04,996/- claimed by the appellant u/s 80P of the Act. 4. Without prejudice to Ground No.2 and Ground No.3, the learned Commissioner of Income Tax (Appeals) ought to have held that the income of the appellant is eligible for exemption even on the ‘Principle of Mutuality’. 5. Any other grounds may be urged at the time of hearing. 5. Ground No.1 and 5 are general in nature which does not require specific adjudication. 6. Ground Nos. 2 to 4 relate to disallowance of deduction claimed u/s 80P of the Act. At the outset, the Ld.AR filed paper book and reiterated the written submissions filed before the Ld.CIT(A). The Ld.AR contended that the disallowance is outside the scope of adjustment that could be made in intimation u/s 143(1) of the Act. The Ld.AR submitted that though the return was not filed within the time specified u/s 139(1) of the Act, but filed within the time allowed u/s 139(4) of the Act, which is 4 I.T.A. No.235/Viz/2022, A.Y.2018-19 Sagara Vikasa Mutually aided Coop Thrift Society Ltd., Visakhapatnam not an independent provision, but an extension of section 139(1) of the Act. The Ld.CIT(A) is not justified in upholding the disallowance of deduction made u/s 80P of the Act, since the income of the assessee is eligible for exemption even on the “Principle of Mutuality”. Hence, pleaded to set aside the order passed by the Ld.CIT(A) and allow the appeal of the assessee. 7. Per contra, the Ld.DR argued that, in order to be eligible to claim deduction u/s 80P of the Act, the assessee was required to file its return of income within the time specified u/s 139(1) of the Act. As per section 143(1)(a) clause(v) of the Act, the total income or loss shall be computed after making disallowance of deduction claimed u/s 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 furnished beyond the due date specified under sub-section(a) of section 139 of the Act. Since the assessee has filed the return of income beyond the time specified u/s 139(1) of the Act, the Ld.DR held that the AO has correctly applied the provision of section 143(1)(a) clause(v) to disallow the deduction claimed u/s 80P and the Ld.CIT(A) has correctly upheld the disallowance made. The Ld.DR relied on the decision of coordinate bench of ITAT in the case of Unagatla Large Sized Co-operative Credit Society Ltd., 5 I.T.A. No.235/Viz/2022, A.Y.2018-19 Sagara Vikasa Mutually aided Coop Thrift Society Ltd., Visakhapatnam Chagallu Mandal vide I.T.A.No.255/Viz/2021 dated 08.03.2023 and pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal of the assessee. 8. I have heard both the parties and perused the material available on record. It is undisputed fact that the assessee filed it’s return of income beyond the due date specified u/s 139(1) of the Act and claimed exemption u/s 80P of the Act. The Ld.AR contended that the disallowance is outside the scope of adjustment that could be made in intimation u/s 143(1) of the Act. The Ld.AR relied on the decision of Hon’ble Bombay High Court in the case of Trustees of Tulsidas Gopalji 207 ITR 368 and contended that section 139(4) is only an extension of section 139(1) of the Act, therefore, the delay in filing the return is to be condoned. The Ld.DR relied on the decision of coordinate bench of ITAT in the case of Unagatla Large Sized Co-operative Credit Society Ltd., Chagallu Mandal vide I.T.A.No.255/Viz/2021 dated 08.03.2023. The said case law is not applicable to the case on hand, because the case law pertains to section 143(1)(a)(ii), but, in the instant case, the AO has adopted the provisions of 143(1)(a)(v). The AO has specifically mentioned that the provision i.e. 143(1)(a)(v) which was inserted and w.e.f. A.Y.2020-21. Therefore, I am inclined to set aside the order passed by the Ld.CIT(A) and remit the 6 I.T.A. No.235/Viz/2022, A.Y.2018-19 Sagara Vikasa Mutually aided Coop Thrift Society Ltd., Visakhapatnam matter back to the Ld.CIT(A) with a direction to re-examine the case on merits. The assessee is also directed to adhere to the notices issued by the department and furnish relevant information / documents sought by the department for adjudication of the issue on merits. 9. In the result, appeal of the assessee is allowed for statistical purpose . Order pronounced in the open court on 29 th March, 2023. Sd/- (द ु व्वूरु आर.एल रेड्डी) (DUVVURU RL REDDY) न्याधयक सदस्य/JUDICIAL MEMBER Dated : 29.03.2023 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee–Sagars Vikasa Mutually Aided Coop Thrift Society Ltd.,Opp. Sun School, Near Vuda Layout, Bheemunipatnam, Visakhapatnam 2. रधजस्व/The Revenue – The Income Tax Officer, Ward-2(1), Infinity Towers, Sankaramattam Road, Visakhapatnam 3. The Principal Commissioner of Income Tax, Visakhapatnam 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam
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