The Sathwin Co-operative Agriculture Service Society Ltd., Hamirpur V. ITO, Ward, Hamirpur

ITA 54/CHANDI/2023

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The case revolves around the disallowance of a deduction claimed under Section 80P of the Income Tax Act, 1961 by The Sathwin Co-operative Agriculture Service Society Ltd. for the Assessment Year 2018-19. The deduction was initially denied by the CPC, Bengaluru due to the late filing of the income tax return, citing Section 80AC which mandates timely filing for claiming deductions under Chapter VI-A. The Assessee contested this decision, leading to an appeal before the CIT(A) which upheld the CPC's decision. The Tribunal, however, reversed this decision, citing the lack of jurisdiction of the CPC to make such a disallowance for the specified assessment year as the relevant amendments to Section 143(1) were not in effect at that time.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127409 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-05-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 08-02-2023
• Other Referred Cases: 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: Set aside
• Section: 139; 143(1); 80P; 139(1)

Judgement Text

आयकर अपील य अ धकरण, च डीगढ़ यायपीठ, च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’, CHANDIGARH BEFORE SHRI A.D. JAIN, VICE PRESIDENT & SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं ./ITA No. 54/C H D / 2 0 2 3 नधा रण वष / Assessment Year : 2018-19 The Sathwin Co-operative Agriculture Service Society Ltd. Sathwin, Sathwin Barsar, Hamirpur बनाम The ITO, Hamirpur H.P. थायीलेखासं./PAN NO: AABAT1523D अपीलाथ /Appellant यथ /Respondent नधा रतीक ओरसे/Assessee by :Sh. Alok Krishan, CA राज वक ओरसे/ Revenue by : Sh. Akashdeep, JCIT, Sr.DR स ु नवाईक तार%ख/Date of Hearing : 18.05.2023 उदघोषणाक तार%ख/Date of Pronouncement : 19.05.2023 आदेश/Order Per A.D. Jain, Vice President: This is assessee’s appeal against the order of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 14.12.2022 for the Assessment Year 2018-19, taking the following grounds of appeal:- 1. That the assessee is eligible for deduction under section 80-P of the act in the AY 2018-19 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 ITA No. 54-Chd-2023 - The Sathwin Co-operative Agriculture Service Society Ltd, Hamirpur 2 claim deduction under Chapter Vl-A under the heading "C.-Deductions in respect of certain incomes" if the return of income for 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. 2018-19 under Section 143, the CPC Bengaluru did not have the power to disallow the deduction claimed under Section 80P for A.Y. 2018-19. 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 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. 5. That the Appellant craves to add, amend, alter or withdraw any ground or grounds of appeal. 6. That stay may be granted for recovery during pendency of appeal 2. The Assessee filed its return of income declaring total income at Rs. Nil after claiming deduction u/s 80P of the Income-tax Act, 1961 (in short, ‘the I.T. Act’ ) amounting to Rs. 2.93,944/-. The return was ITA No. 54-Chd-2023 - The Sathwin Co-operative Agriculture Service Society Ltd, Hamirpur 3 processed by the CPC, Banglore u/s 143(1) of the I.T. Act, denying the deduction claimed u/s 80P. The Assessee filed rectification application before the AO, stating that the deduction claimed had wrongly been denied by the CPC. The AO, rejecting the application, observed that the return of income had been filed late; that the due date u/s 139 (1) of the Act was 31.08.2018, whereas the return had been filed on 30.03.2019; and that according to section 80AC, after 01.04.2018, no deduction under Chapter VIA heading ‘C’ would be allowed unless the return was filed before the due date u/s 139(1) of the I.T. Act. 3. 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, 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. The Ld. CIT(A), further relying on the decision of the Hon'ble Madras High Court in ‘AA520 Veerappampalayam Primary agricultural Coop Credit Society Ltd. v DCIT’, 38 taxmann.com 571 (Madras), observed that the adjustment made u/s 143(a) of the Act was not a mistake apparent from record, therefore, the AO was justified in rejecting the application of the Assessee u/s 154. ITA No. 54-Chd-2023 - The Sathwin Co-operative Agriculture Service Society Ltd, Hamirpur 4 4. Before us, the ld. Counsel for the Assessee, through his written submissions, relied on the recent 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’ , ITA No. 332/Chd/2021, for assessment year 2018-19 and other cases. 5. On the other hand, the ld. DR has placed strong reliance on the impugned order. 6. 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 ITA No. 54-Chd-2023 - The Sathwin Co-operative Agriculture Service Society Ltd, Hamirpur 5 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 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). 7. 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. 2,93,940/- is cancelled. 8. In the result, the appeal is allowed. Order pronounced on 19.05.2023. Sd/- Sd/- (VIKRAM SINGH YADAV) ( A.D. JAIN ) Accountant Member Vice President Dated : 19.05.2023 “आर .के.” आदेशक त+ल,पअ-े,षत / Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकरआय ु 2त/ CIT 4. ,वभागीय त न6ध, आयकरअपील%यआ6धकरण, च8डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड फाईल/ Guard File ITA No. 54-Chd-2023 - The Sathwin Co-operative Agriculture Service Society Ltd, Hamirpur 6 आदेशान ु सार/ By order, सहायकपंजीकार/ Assistant Registrar