The Mahal Co-operative Agriculture Service Society, Hamirpur V. ITO , Hamirpur

ITA 392/CHANDI/2023

AI Insights

The case involves The Mahal Co-operative Agriculture Service Society Ltd., which appealed against the decision of the lower tax authorities that disallowed a deduction claimed under Section 80P of the Income Tax Act, 1961, for the assessment year 2019-20. The deduction was initially denied by the CPC in Bengaluru due to the late filing of the income tax return. The Tribunal examined the amendments to the Income Tax Act, particularly Sections 80AC and 143(1)(a)(v), and referenced similar cases to conclude that the CPC did not have the authority to disallow the deduction for the assessment year in question, as the relevant provisions were not in effect at that time.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135498 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 18-09-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 18-06-2023
• Other Referred Cases: The Sathwin Co-operative Agriculture Service Society Ltd. Vs. The ITO Hamirpur, The Lanjani Co-operative Agri service Society Ltd. Vs The DCIT, CPC, Bengaluru
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Set aside
• Section: 154; 143(1); 80P; 139(1)

Judgement Text

आयकर अपीलीय अिधकरण,च᭛डीगढ़ ᭠यायपीठ “बी” , च᭛डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH ᮰ी आकाश दीप जैन, उपा᭟यᭃ एवं ᮰ी िवᮓम ᳲसह यादव, लेखा सद᭭य BEFORE: SHRI. AAKASH DEEP JAIN, VP & SHRI. VIKRAM SINGH YADAV, AM आयकर अपील सं./ ITA NO. 392/Chd/ 2023 िनधाᭅरण वषᭅ / Assessment Year : 2019-20 The Mahal Co-operative Agriculture Service Society Ltd. VPO-Mahal, Tehsil- Bhoranj, Hamirpur बनाम The ITO, Hamirpur, H.P. ̾थायी लेखा सं./PAN NO: AAGAT2029P अपीलाथᱮ/Appellant ᮧ᭜यथᱮ/Respondent िनधाᭅᳯरती कᳱ ओर से/Assessee by : Shri Alok Krishan, CA राज᭭व कᳱ ओर से/ Revenue by : Shri Dharam Vir, JCIT, Sr. DR सुनवाई कᳱ तारीख/Date of Hearing : 19/09/2023 उदघोषणा कᳱ तारीख/Date of Pronouncement : 20/09/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT(A), NFAC, Delhi dt. 22/02/2013 pertaining to Assessment Year 2019-20. 2. There is a delay of 53 days in filing the appeal as pointed out by the Registry and after considering the condonation application filed by the assessee and hearing the Ld. DR, the delay is hereby condoned and the appeal of the assessee is admitted for adjudication. 3. In the present appeal, the assessee has raised the following grounds of appeal: 1. That the assessee is eligible for deduction under section 80-P of the act in the AY 2019-20 as the amendment for ineligibility to claim deduction was inserted in certain cases was made applicable from AY 2021-22. 2. That Section 80AC was inserted to the Act via Finance Act, 2018 and it restricts the eligibility of an assessee to claim deduction under Chapter Vl-A under the heading "C.-Deductions in respect of certain incomes" if the return of income for 2 any previous year relevant to the assessment year commencing on or after 01.04.2018, is filed after due date specified in Section 139(1) but the corresponding amendment in section 143 was not made than. 3. That the combined reading of Section 80AC and Section 143(1)(a) as mentioned above, leads to the reasonable conclusion that while processing the Income Tax Return for the A.Y. 2019-20 under Section 143, the CPC Bengaluru did not have the power to disallow the deduction claimed under Section 80P for A.Y. 2019-20. The enabling provision to do so under Section 143(1) was inserted in the statue only by Finance Act, 2021. Hence, such power was conferred upon it only from A.Y. 2021-22. Therefore, the CPC, Bengaluru has erred in its decision of disallowing the deduction claimed. 4. That the case is covered by the decision in the case of The Sathwin Co- operative Agricultural Service Society Ltd. Vs. The ITO Hamirpur (Appeal Ref No.- ITA 54/CHD/2023, CHANDIGARH 'B' BENCH - order dated 19.05.2023) wherein the Hon'ble ITAT ruled to set aside the impugned order and the appeal of the assessee was allowed. The facts of the case are similar to this case. 5. That the case is covered by the decision in the case of The Lanjani Co-operative Agri service Society Ltd. Vs The DCIT, CPC, Bengaluru (Appeal Ref No. - ITA 332/CHANDI/2021 ITAT, CHANDIGARH SMC BENCH - order dated 30.08.2022, wherein The Hon'ble ITAT ruled to set aside the impugned order and the appeal of the assessee was allowed. The facts of the case are similar to this case. 6. That the Appellant craves to add, amend, alter or withdraw any ground or grounds of appeal. 7. That stay may be granted for recovery during pendency of appeal. 4. Briefly the facts of the case are that the assessee is a Co-operative Society and filed its return of income on 14/02/2020 wherein he had claimed deduction under section 80P of the Income Tax Act, 1961 of Rs. 6,35,000/-. While processing the return, the CPC denied the claim under section 80P thereby raising demand of Rs. 2,52,850/-. Thereafter, assessee filed a rectification application requesting to allow deduction claimed under section 80P of the Act but the CPC Bangalore passed the rectification order under section 154 of the Act sustaining the disallowance of deduction under section 80P of the Act. 5. The Assessee preferred appeal before the ld. CIT(A). However, the ld. CIT(A) dismissed the appeal of the Assessee by upholding the order of the AO, 3 observing that since the Assessee had not filed the Return of Income within the due date prescribed u/s 139(1) of the Act, it was not eligible to claim and get deduction u/s 80P of the Act and the claim of deduction would assume the colour of incorrect claim by virtue of provisions of section 80AC of the Act. 6. Before us, the ld. Counsel for the Assessee relied on the decision of the ITAT, SMC Bench, Chandigarh, rendered on 30.08.2022 in ‘The Lanjani Co- operative Agri Service Society Ltd., VPO Lanjani, Kangra (HP) v. The DCIT (CPC) Bangaluru’ & others (ITA No. 332/Chd/2021 & others dated 30/08/2022), for assessment year 2018-19 and following the same, another decision of the Chandigarh Benches in case of The Sathwin Co-operative Agriculture Service Society ltd vs ITO (ITA No. 54/CHD/2023 dated 19/05/2023) and submitted that the matter is squarely covered by the said decisions. 7. On the other hand, the ld. DR has placed strong reliance on the impugned order. 8. We have heard the rival contentions and have perused the material on record. It is not in question that section 80AC of the I.T. Act, as amended by Finance Act, 2018, stipulated that for claiming deduction u/s 80P of the Act, the return of income was required to be filed before the due date, as prescribed by section 139(1) and in the present case, the return was filed belatedly. However, it was only by the amendment to section 143(1) (a)(v) brought in by Finance Act, 2021, that the CPC can be said have been vested, exercising powers u/s 143(1)(a), to make disallowance on the ground of belated return. Prior to that, as per the un-amended provisions, the AO could disallow a claim u/s 143(1) (a) only on the grounds of arithmetical error or that the Assessee had made an incorrect claim, etc. Reference, in this regard, may be had to ‘Fatehraj Singhvi & Ors. v. UOI and Ors’; 289 ITR 602 (Kar.). It goes without saying that in the absence of enabling powers, no disallowance can be made. As such, enabling provisions being absent, the CPC did not have the jurisdiction to make the disallowance in 4 question, in the order u/s 143 (1) of the Act. For this, we find support from ‘The Lanjani Co-operative Agri Service Society Ltd., VPO Lanjani, Kangra (HP) v. The DCIT (CPC) Bangaluru’ (supra) and The Sathwin Co-operative Agriculture Service Society ltd (supra). 9. For the above discussion, finding merit in the grievance raised by the Assessee, the same is accepted. The order under appeal is accordingly reversed. Consequently, the disallowance of Rs. 6,35,000/- is cancelled and the AO is directed to allow deduction u/s 80P to the assessee. 10. In the result, the appeal is allowed. Order pronounced in the open Court on 20/09/2023. Sd/- Sd/- आकाश दीप जैन िवᮓम ᳲसह यादव (AAKASH DEEP JAIN) ( VIKRAM SINGH YADAV) उपा᭟यᭃ / VICE PRESIDENT लेखा सद᭭य/ ACCOUNTANT MEMBER AG Date: 20/09/2023 आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 5. गाडᭅ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar