NAVAIKULAM FARMERS WELFARE CO-OPERATIVE SOCIETY LTD NO.1731, V. UNION OF INDIA ,

WP(C)/14224/2023

AI Insights

The case involves the NavaiKulam Farmers Welfare Co-operative Society Ltd, which challenged the denial of a deduction under Section 80P of the Income Tax Act, 1961, due to late filing of their tax return under Section 139(1). The petitioner argued that the restriction on claiming deductions for late returns filed under Section 139(4) is arbitrary and discriminatory. The Revenue contended that the late filing rendered the return irregular, thus disqualifying the petitioner from claiming the deduction. The court permitted the petitioner to seek a condonation of delay from the CBDT, which could potentially allow the deduction if the delay is condoned.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 743440 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 04-10-2023
• Assessment Year: misc
• Other Referred Cases: Ambaradi Seva Sahkari Mandali Ltd. vs DCIT (CPC), W.P(C) No.13195 of 2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: K P PRADEEP; HAREESH; SANAND RAMAKRISHNAN; T T BIJU; T THASMI; M J ANOOPA; SANU MALAKEEL
• Keywords: Deduction; Income Tax; Return Filing; Section 80AC; Section 80P
• Section: 139(1); 80P; 139(4); 80AC

Judgement Text

"W.P.(C) No. 14224/2023 : 1 : IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH WEDNESDAY, THE 4TH DAY OF OCTOBER 2023 / 12TH ASWINA, 1945 WP(C) NO. 14224 OF 2023 PETITIONER/S: NAVAIKULAM FARMERS WELFARE CO-OPERATIVE SOCIETY LTD NO.1731, NP1-835 KIZHAKKE NADA, NAVAIKULAM P.O, THIRUVANANTHAPURAM – 695 603, REPRESENTED BY ITS SECRETARY JAYASREE B.S. BY ADVS. K.P.PRADEEP HAREESH M.R. SANAND RAMAKRISHNAN T.T.BIJU T.THASMI M.J.ANOOPA SANU S MALAKEEL RESPONDENTS: 1 UNION OF INDIA , REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE, SANSAD MARG, NEW DELHI- 110 001. 2 THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE, MINISTRY OF FINANCE GOVERNMENT OF INDIA, NORTH BLOCK NEW DELHI- 110 001, REPRESENTED BY ITS CHAIRMAN. 3 DEPUTY COMMISSIONER OF INCOME TAX, CENTRALIZED PROCESSING CENTRE, INCOME TAX DEPARTMENT, BENGALURU, KARNATAKA- 560 500. 4 ADDITIONAL COMMISSIONER OF INCOME TAX, INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110 003. 5 COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110 003. 6 STATE OF KERALA, REPRESENTED BY ITS PRINCIPAL SECRETARY DEPARTMENT OF CO-OPERATION GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM- 695 001. BY ADV. SRI. CHRISTOPHER ABRAHAM, SC THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No. 14224/2023 : 2 : DINESH KUMAR SINGH, J. --------------------------------------------------------- W.P.(C). No. 14224 of 2023 --------------------------------------------------------- Dated this the 4th day of October, 2023. JUDGMENT The present writ petition has been filed by the petitioner impugning the provisions of Section 80AC of the Income Tax Axt, 1961 (‘Act, 1961’ for short) as substituted by the Finance Act, 2018, to the extent of requiring the filing of return within the due date as stipulated under Section 139(1) of the Act, 1961 for the purpose of claiming deduction under Section 80P of the Act, 1961. 2. The petitioner has also challenged Exhibit P5 appellate order issued by the 5th respondent, whereby the deduction claimed by the petitioner under Section 80P of the Act, 1961 has been denied on the ground that the petitioner did not file its return under Section 139(1) of the Act, 1961 in time. Section 80AC as substituted by the Finance Act, 2018, reads thus: '80AC. Deduction not to be allowed unless return furnished.— Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after— i. the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80- ID or section 80-IE; ii. the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading \"C.— W.P.(C) No. 14224/2023 : 3 : Deductions in respect of certain incomes\", No such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.' 3. Thus, a person who claims deduction is required to file its return under Section 139(1) within the time prescribed for filing the return of income. However, if he files the return with delay as provided under Section 139(4) of the Act, 1961, a person becomes dis-entitled to claim deduction under Section 80P of the Act, 1961. The petitioner has been denied the benefit of deduction under Section 80P only on the ground that the petitioner did not file return under Section 139(1) as mandated under the provisions of Section 80AC of the Act, 1961. 4. The learned counsel for the petitioner submits that the law restricts for claiming deduction only in case of the returns filed under Section 139(1). The provision restricting the claim for deduction comes under Chapter VI-A under the head ‘C.-Deduction in respect of certain incomes’ is discriminatory and arbitrary, as there is no basis for restricting the deductions in respect of returns filed under Section 139(1) of the Act, 1961 and not in respect of returns which are filed under Section 139(4) of the Act, 1961. When the Department accepts returns under Section 139(4) of the Act, 1961 disallowing the deductions in respect of certain incomes in W.P.(C) No. 14224/2023 : 4 : such a return is not based on any intelligible criteria to differentiate the returns filed under Section 139(1) and Section 139(4) of the Act, 1961. 5. The learned Standing Counsel for the Revenue, on the other hand, submits that since the petitioner has filed the return belatedly under Section 139(4) of the Act, 1961, the same is an irregular return and therefore, he has been disallowed the claim for deduction under Section 80P of the Act, 1961 from his income as provided under Section 80AC of the Act, 1961. 6. The learned counsel for the Revenue, however, submits that the petitioner may file an application before the Central Board of Direct Taxes, respondent No.2, who is the authority to condone the delay in filing return and also to issue an order treating the return filed under Section 139(4) of the Act, 1961 as the one filed under Section 139(1) of the Act, 1961 for the purpose of claiming deductions under Section 119(2). 7. Considering the said aspect, the petitioner is permitted to file an application before the second respondent within a period of fifteen days from today; in that event, the second respondent shall consider the same in its proper perspective and pass orders thereon within 45 days thereafter. If the delay is condoned, the assessing authority will revise the order in respect of the claim of the W.P.(C) No. 14224/2023 : 5 : petitioner for deduction under Section 80P of the Act, 1961. It is made clear that the demand in pursuance to Exhibit P2 assessment order shall not be enforced for a period of two months. Writ petition stands finally disposed of. sd/- DINESH KUMAR SINGH, JUDGE. Rv W.P.(C) No. 14224/2023 : 6 : APPENDIX OF WP(C) 14224/2023 PETITIONER’S EXHIBITS: Exhibit P1 TRUE COPY OF THE ACKNOWLEDGEMENT OF INCOME TAX RETURN DATED 25-2-2019 FILED UNDER SECTION 139 (4) OF THE INCOME TAX ACT, FOR THE ASSESSMENT YEAR 2018-19 Exhibit P2 TRUE COPY OF THE INTIMATION U/S 143(1) OF THE INCOME TAX ACT, 1961 WITH DIN NO CPC/1819/A5/1901973435 DATED 31-05-2019 ISSUED FOR THE YEAR 2018-19 BY THE 3RDRESPONDENT Exhibit P2 (a) TRUE COPY OF THE ASSESSMENT ORDER NO ITBA/AST/S/143(3)/2021-221032485542(1) ISSUED FOR THE YEAR 2018-19 BY THE 4TH RESPONDENT Exhibit P3 TRUE COPY OF THE DEMAND NOTICE NO ITBA/AST/S/156/2021-221032485561(1) DATED 17-4- 2021ISSUED FOR THE YEAR 2018-19 BY THE 4TH RESPONDENT Exhibit P4 TRUE COPY OF THE APPEAL IN EXT P2 ORDER DATED 12-07-2019 FILED FOR THE YEAR 2018-19 BEFORE THE 5TH RESPONDENT BY THE PETITIONER Exhibit P4(a) TRUE COPY OF THE APPEAL IN EXT P2 (A) ORDER DATED 17-5-2021 FILED FOR THE YEAR 2018-19 BEFORE THE 5TH RESPONDENT BY THE PETITIONER Exhibit P5 TRUE COPY OF THE ORDER UNDER SECTION 250 OF THE INCOME TAX, ACT DATED 08-02-2023 ISSUED FOR THE YEAR 2018-19 BY THE 5TH RESPONDENT Exhibit P6 TRUE COPY OF THE ORDER DATED 10-2-2023 OF THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH IN AMBARADI SEVA SAHKARI MANDALI LTD. VS DCIT (CPC) Exhibit P7 TRUE COPY OF THE ORDER IN W.P(C) NO.13195 OF 2023 DATED 12-04-2023 RESPONDENTS’ EXHIBITS: NIL True Copy PS To Judge. rv "