The Khedbrahma Taluka Primary Teachers Co.Op. Credit Society Ltd., Himatnagar V. Asstt. Director of Income Tax, CPC, Bengaluru

ITA 500/AHD/2022

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The case revolves around the denial of deduction under section 80P of the Income Tax Act, 1961 to The Khedbrahma Taluka Primary Teachers Co-op. Credit Society Ltd. due to a minor delay in the electronic filing of their income tax return. The return was filed on 31.10.2019 but was recorded as filed on 01.11.2019 due to a technical glitch, leading to a tax demand of Rs. 22,64,181. The Tribunal examined whether such a minor delay, attributed to technical issues, justifies the denial of deductions under section 80P. The Tribunal referenced similar cases and precedents where minor delays were condoned, emphasizing the need for a justice-oriented approach.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114081 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-02-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 24-11-2022
• Other Referred Cases: Smt. Revathi Raju vs. ITO, Saffire Garments Vs. ITO, Tenovia Solutions Pvt. Ltd. vs. ADIT, CPC, Bangalore, Regen Infrastructure & Services (P.) Ltd. Vs. CBDT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(1); 80P; 139(1); 139(4)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: Ms. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member The Khedbrahma Taluka Primary Teachers Co-op. Credit Society Ltd. Station Road, Nr. Dave Hospital, Khedbrahma-383255 PAN: AABTT2489D (Appellant) Vs Asst. Director of Income Tax, CPC, Central Processing Centre, Income Tax Department, Bengaluru-560500 (Respondent) Assessee Represented : Shri Rushin Patel, Adv. Revenue Represented: Shri Saumya Pandey Jain, Sr. D.R. Date of hearing : 13-02-2023 Date of pronouncement : 17-02-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the Appellate order dated 31.10.2022 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “NFAC”), arising out of the intimation passed under section ITA No. 500/Ahd/2022 Assessment Year 2019-20 I.T.A No. 500/Ahd/2022 A.Y. 2019-20 Page No The Khedbrahma Taluka Primary Teachers co-op. Credit Society Ltd. vs. Asst. Director of Income Tax 2 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2019-20 2. The brief facts of the case is that the assessee is Credit Co-op. Society, who filed the Return of Income declaring Nil income and claimed deduction u/s. 80P of Rs.59,84,109/- for the Assessment year 2019-20. The assessee filed its e-return on 31.10.2019 at 11.45 P.M. However the Return of Income was uploaded in the Income Tax Portal on 01.11.2019 at 00:04:42 hrs. As the Return was filed after the due date prescribed u/s. 139(1) with a delay of 4 Minutes and 42 Seconds, the assessee was denied the benefit of deduction u/s. 80P of the Act, vide intimation u/s. 143(1) dated 17.06.2020. Thus as against the Nil income filed by the assessee, by way of intimation u/s. 143(1) tax demand of Rs. 22,64,181/- was rised by the CPC Centre, Bengaluru. 3. Aggrieved against the intimation, the assessee filed an appeal before the Ld. CIT(A)-NFAC. Ld. CIT(A) dismissed the assessee appeal following the decision of the ITAT Bangalore in Smt. Revathi Raju vs. ITO in ITA No. 1425/Bang/2018 and the Hon’ble ITAT Special Bench Rajkot in the case of Saffire Garments Vs. ITO in ITA No. 397/Rajkot/2009 as the Return of Income was filed belatedly u/s. 139(4) of the Act. 4. Aggrieved against the same, the assessee is in appeal before us raising the following grounds of appeal: 1. The Learned Commissioner of Income Tax (Appeals) has erred in law and on facts of the case in sustaining the adjustment made by CPC resulting into disallowance of deduction u/s. 80P. I.T.A No. 500/Ahd/2022 A.Y. 2019-20 Page No The Khedbrahma Taluka Primary Teachers co-op. Credit Society Ltd. vs. Asst. Director of Income Tax 3 4.1. The additional ground raised by the Assessee reads as under: 1. The learned ADIT, CPC erred in law and on fact in making adjustment while processing the return u/s. 143(1) of denying the claim of deduction u/s. 80P only on the basis that return was not filed within due date prescribed u/s. 139(1). 5. Ld. Counsel Mr. Rushin Patel appearing for the assessee submitted before us that the Ld. CIT(A) totally erred in denying the benefit of deduction u/s. 80P on the ground that the return was filed u/s. 139(4) of the Act, whereas the case of the assessee is that there were some technical glitches in uploading the Income Tax Return in the Income Tax Portal thereby a delay of 4 minute and 42 second in uploading the Return of Income. Thus the Income Tax Portal considered that the return was filed on 01.11.2019 at 00:04:42 hrs. 6. The Ld. Counsel brought to our notice that the assessee made grievance redressal in the e-Nirvan Portal claiming that the delay in internet problem of uploading the returns and requested to treat the Return as filed on 31.10.2019 and allow deduction under section 80P of the Act. The grievance was redressed vide order dated 29.11.2019 stating that the “processing of e-filed return is in progress. Please wait for intimation u/s. 143(1) which will be sent to your registered e-mail ID once the process is completed. You may also check the status of your return by logging into www.incometaxIndiaefiling.gov.in”. However in the intimation passed u/s. 143(1), the assessee was denied the claim of deduction I.T.A No. 500/Ahd/2022 A.Y. 2019-20 Page No The Khedbrahma Taluka Primary Teachers co-op. Credit Society Ltd. vs. Asst. Director of Income Tax 4 of under section 80P as zero and demanded a tax of Rs. 22,65,234/-. 6.1. In this connection, the Ld. Counsel drawn our attention to the Co-ordinate Bench decision of the Chennai Bench in ITA No. 490/Chny/2021 dated 11.05.2022 in the case of Tenovia Solutions Pvt. Ltd. vs. ADIT, CPC, Bangalore wherein the Tribunal has condoned the delay of 12 minutes and 31 seconds in uploading the Return of Income due to technical snag in the website of the Income Tax Department. Thus the Ld. A.R. pleaded, if at all, if there is a delay i.e. 4 minutes and 42 seconds only the same is required to be condoned in the interest of justice and the claim of deduction u/s. 80P be allowed to the assessee. 7. Per contra, the Ld. D.R. appearing for the Revenue supported the order of the Lower Authorities and pleaded to uphold the same. 8. We have given our thoughtful consideration and perused the materials available on record. It is an undisputed fact that though the assessee started filing the Return on 31.10.2019, but the same was uploaded in the Income Tax Portal on 01.11.2019 at 00:04:42 minutes. This the same is considered as a belated return filed u/s. 139(4) of the Act and thereby the claim of deduction u/s. 80P was denied to the assessee. 8.1. The issue for consideration before us is that whether once the Return of Income is filed beyond the prescribed date u/s. 139(1) of the Act, can the deduction u/s. 80P of the Act be denied to the I.T.A No. 500/Ahd/2022 A.Y. 2019-20 Page No The Khedbrahma Taluka Primary Teachers co-op. Credit Society Ltd. vs. Asst. Director of Income Tax 5 assessee, by way of adjustment u/s. 143(1) of the Act. On going through the statutory provisions, we found that 80AC of the Act provides that no such deduction under section 80P of the Act shall be allowed to an assessee unless he furnishes a return of his income on or before the due date specified u/s. 139(1) of the Act w.e.f. Assessment Year 2018-19 onwards. However, section 143(1)(a)(v) of the Act provides that disallowance of deduction claimed under any of the provisions of Chapter VI-A under the heading “C- Deductions in respect of certain incomes” (which includes deduction under section 80P of the Act), can be made if the Return is filed beyond the due date specified under sub-section (1) of Section 139. This amendment has been introduced w.e.f. 01.04.2021 and does not apply to the impugned assessment year involved herein namely Assessment Year 2019-20. 8.2. Accordingly in our considered view denial of claim of deduction u/s. 80P of the Act would not come within the purview of prima facie adjustment under section 143(1)(a)(v) of the Act. Thus the case laws relied by the Ld. CIT(A) in its order is clearly distinguishable to the facts of the present case and the same are not applicable. 8.3. Further the Co-ordinate Bench of the Chennai Tribunal in the case of Tenovia Solutions Pvt. Ltd. (cited supra) has considered the technical delay in uploading the Returns of Income for 12 minutes and 31 seconds, whether the assessee was denied the benefit of carry forward losses was set aside the matter back to the file of the Ld. CIT(A) after following the Hon'ble Madras High Court judgment I.T.A No. 500/Ahd/2022 A.Y. 2019-20 Page No The Khedbrahma Taluka Primary Teachers co-op. Credit Society Ltd. vs. Asst. Director of Income Tax 6 in the case of Regen Infrastructure & Services (P.) Ltd. Vs. CBDT (68 Taxmann.com 93) as follows: 3. Upon careful consideration of factual matrix, we find that Ld. CIT(A) has denied the otherwise eligible claim on mere technicalities completely ignoring the plight of the assessee. It could be seen that the assessee tried to upload the return for 21 hours on 31.10.2019 and ultimately got successful in filing the return of income past midnight and accordingly, the delay of 12 minutes and 31 second occurred due to which the return of income was tagged as belated return. We fail to understand as to how the assessee could be termed as defaulter in such a case and what the assessee would have gained by filing the return of income with such a minor delay. It is also not the case of the revenue that the assessee is not entitled for carry forward of losses. 4. On the given facts, the decision of Hon'ble Madras High Court in Regen Infrastructure & Services (P.) Ltd. V/s CBDT (68 Taxmann.com 93) as affirmed by division bench (75 Taxmann.com 135) is squarely applicable to the facts of the case. The Hon'ble Court, under similar circumstances, condoned the delay of one day and held that the petitioner had successfully explained the delay in filing the return on 16.10.2010 instead of 15.10.2010. Further, it is not the case of the respondents that the petitioner is not entitled to claim the carry forward loss under Section 139(3) of the Act. When the petitioner is entitled to claim the carry forward loss under Section 139(3) of the Income Tax Act, it cannot be stated that the delay in filing the return had occurred deliberately or on account of culpable negligence or on account of mala-fides. Further, the petitioner does not stand to benefit by resorting to delay. In fact, they run a serious risk. Moreover, when the petitioner had satisfactorily explained the delay in filing the said return, the approach of the first respondent should be justice oriented so as to advance the cause of justice. In this case, when the petitioner as a litigant is entitled to claim carry forward loss, mere delay should not defeat the claim of the petitioner. The division bench, while confirming this decision, further held that one should take judicial notice of the fact that uploading of Return requires not only an effort but also consumes sometimes. If the assessee has encountered certain hardship or difficulty in uploading his return, due to a technical-snag in the website of the Income-tax Department due to the last hour rush of filing of returns, the delay deserves to be condoned. In the present case before us, the assessee stands on a much better footing. 5. Therefore, on the facts and circumstances of the case, we set aside the impugned order and restore the matter back to the file of Ld. CIT(A) to verify the fact that there was only a minor delay of 12 minutes and 31 seconds in filing of return of income as pleaded by the assessee. If so, the return filed by the assessee would be considered as a return filed u/s. 139(1) and the benefit of carry-forward of losses would be allowed in accordance with law. I.T.A No. 500/Ahd/2022 A.Y. 2019-20 Page No The Khedbrahma Taluka Primary Teachers co-op. Credit Society Ltd. vs. Asst. Director of Income Tax 7 8.4. Respectfully following the above rulings, we hold the CPC Centre is not correct in denying the claim of deduction u/s. 80P of the Act to the assessee under 143(1)(a)(v) proceedings for this Assessment Year 2019-10. Hence the intimation made by the CPC Centre and tax demand raised thereon are hereby quashed. Thus the grounds raised by the assessee are hereby allowed. 9. In the result, the appeal filed by the Assessee is allowed. Order pronounced in the open court on 17-02-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 17/02/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद