R1160 THOTTIAM MILK PRODUCERS CO OPERATIVE SOCIETY,TIRUCHIRAPPALLI V. ASSESSING OFFICER WARD 2(1) TRICHY, TIRUCHIRAPPALLI

ITA 2874/CHNY/2025

AI Insights

The case involves the R1160 Thottiam Milk Producers Co-operative Society, which appealed against the order of the Commissioner of Income Tax (Appeals), Mysore, dismissing their appeal against an intimation order from the Central Processing Centre (CPC) that denied them a deduction under section 80P of the Income Tax Act due to late filing of their income tax return for the assessment year 2020-21. The CPC had disallowed the deduction because the return was filed after the due date prescribed under section 139(1) of the Act. The Tribunal considered the procedural aspects of the late filing and the substantive eligibility for the deduction under section 80P, ultimately deciding to await the outcome of a condonation petition filed by the assessee.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848634 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Chennai
• Assessment Year: 2020-2021
• Appeal Filed On: 17-10-2025
• Other Referred Cases: Chakargadh Seva Sahakari Mandali Ltd [ITA No.187/Rjt/2022], Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana Sangham Vs. CIT [2023] 152 taxmann.com 347 (Kerala), Salem District Child Welfare Org. Asst. TCS Ltd. V. ITO [ITA no.402/CHNY/2023]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K. ILAIYARAJA
• Assessee Lawyers: V. ALAGAPPAN; BY VIRTUAL
• Keywords: Condonation of delay; Set aside; Competent authority; Benefit of exemption
• Section: 142(1)

Judgement Text

"आयकर अपील य अ धकरण, ‘बी’ \u000eयायपीठ, चे\u000eनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI \u0015ी एबी ट वक\u0019, \u000eया\u001aयक सद य एवं \u0015ी एस. आर. रघुनाथा, लेखा सद य क े सम$ BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.:2874/Chny/2025 \u001aनधा%रण वष% / Assessment Year: 2020-21 R1160 Thottiam Milk Producers Co-operative Society, No.42, Salem Main Road, Thottiam S.O., Thottiyam, Tiruchirapalli – 621 215. vs. Assessing Officer, Ward -2(1), Trichy. [PAN: AACAR-0614-C] (अपीलाथ'/Appellant) (()यथ'/Respondent) अपीलाथ' क* ओर से/Appellant by : Shri. V. Alagappan, CA. (by Virtual) ()यथ' क* ओर से/Respondent by : Shri. K. Ilaiyaraja, Addl. CIT. सुनवाई क* तार ख/Date of Hearing : 27.02.2025 घोषणा क* तार ख/Date of Pronouncement : 24.03.2026 आदेश /O R D E R PER S. R. RAGHUNATHA, AM : The present appeal is filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals), Mysore (hereinafter referred to as “ld.CIT(A)”), dated 28.08.2025 passed by dismissing the appeal filed by the assessee against the intimation order dated 23.12.2021 passed u/s.143(1) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), pertaining to Assessment Year (A.Y.) 2020-21. 2. The sole ground raised by the assessee is that the CPC, Bengaluru has denied the deduction u/s.80P of the Act for the reason that the assessee has Printed from counselvise.com :-2-: ITA. No:2874 /Chny/2025 filed its return of income after the due date prescribed u/s.139(1) of the Act for the A.Y. 2020-21. 3. Brief facts of the case emanating from the records are that the assessee is a Primary Co-operative society engaged in supplying milk produced by its members to Tiruchirappalli District Milk Producers Union Limited which is a Federal Co-operative Society and filed its return of income on 20.02.2021 admitting an income of Rs.Nil after claiming deduction u/s.80P(2)(b) of the Act to the tune of Rs.3,35,788/-. Thereafter, an intimation order dated 23.12.2021 was passed by the Central Processing Centre (hereafter referred to as “CPC”) wherein the sum claimed for deduction u/s.80P was disallowed on the ground that the return was filed after the due date as specified u/s.139(1) of the Act and a demand of Rs.3,35,788/- was raised against the assessee. 4. Aggrieved by the order of the CPC, the assessee filed an appeal before the ld.CIT(A) vide Form 35 dated 20.11.2024. Thereafter, the ld.CIT(A) rejected the appeal of the assessee by way of order dated 28.08.2025. 5. Aggrieved by the order of the ld.CIT(A), the assessee has preferred the present appeal before us. 6. During the proceedings before the ld.CIT(A), the assessee submitted that it is a Primary Milk Producers Co-operative Society engaged in supplying of milk produced by its members to Tiruchirappalli District Milk Producers Union Limited which is a Federal Co-operative Society and eligible to claim the benefits of its income, a deduction u/s.80P(2)(b) of the Act. As a co-operative society it has to get its accounts audited by the auditors appointed by the Government of Tamil Nadu. Thereafter, return of income would be filed. For the year under consideration, the audit was completed and the return was filed on 20.02.2021 wherein the income of Rs.Nil was returned after claiming deduction u/s.80P(2)(b) of the Act. The delay in filing the return of income was owing to the fact that the audit was completed on 04.02.2021 by the Coopertive Auditors, appointed by the Government of Tamilnadu. Reliance was made on the Printed from counselvise.com :-3-: ITA. No:2874 /Chny/2025 decision of this tribunal in the case of Chakargadh Seva Sahakari Mandali Ltd [ITA No.187/Rjt/2022] in support of its case. 7. The ld.CIT(A), however observed in the order passed u/s.250 of the Act, that the last date for filing return u/s.139(1) of the Act was 15.02.2021. But the assessee has filed the return after 5 days, on 20.02.2021. Since the deduction u/s.80P can be claimed only if it is filed within the due date as per Section 80AC of the Act, the ld.CIT(A) confirmed that the disallowance of the CPC with respect to the deduction u/s.80P is correct. In regard to the case relied by the assessee, the ld.CIT(A) remarked that in the said case, the delay was not significant unlike the case of the assessee and further cited the CBDT circular no.13/2023 dated 26.07.2033 which provides certain guidelines for CCIT/DGIT for condonation of delay u/s.80P return from AYs 2018-19 to 2022-23. For these grounds, the ld.CIT(A) rejected the appeal of the assessee vide order dated 28.08.2025 by holding as under : “6.4. In the instant case, the fact remains that the appellant has furnished its return of income belatedly and the claim of any deduction cannot be entertained owing to the provisions of Section 80A(5) of the IT Act. It won't be out of place to mention here that the appellant has to establish that his case clearly and squarely falls within the ambit of the said provisions of the Act by filing the return of income. However, the appellant has not furnished return of income before the due date as prescribed u/s 139(1). Therefore, in the instant case, the return of income has not been filed by the appellant within the due date, the claim of deduction u/s 80P of the appellant is without any merits and cannot be accepted EPAR 6.5. In this case, the reliance is also placed on the decision of Hon'ble Jurisdictional High Court of Kerala in the case of Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana Sangham Vs. CIT in [2023] 152 taxmann.com 347 (Kerala) dated 14/03/2023, wherein it was held that as \"Where returns filed by assessee-society were beyond dates prescribed under sections 139(1), 139(4), 142(1) or 148 are non-est in view of provision of section 80A(5), precondition to claim deduction under section 80P had not been fulfilled and therefore assessee was not entitled to benefit of exemption under section 80P(2)(b)\". The facts of the case law relied upon are identical to facts of the present case the appellant has also failed to file return of Income for the year under appeal within the due date. 6.6 In view of the discussion supra and respectfully following the Hon’ble jurisdictional High Court decision referred above, it is held that the appellant is not eligible to claim the deduction u/s. 80P of the Act. Hence, the Ground no.1 of the appeal is hereby dismissed.” Printed from counselvise.com :-4-: ITA. No:2874 /Chny/2025 8. The ld.AR for the assessee submitted that the assessee having fulfilled all the substantive requirements u/s.80P of the Act is eligible to claim the deduction. Moreover, Section 80AC is directory and that benefit u/s.80P cannot be disallowed on mere procedural non-compliance, i.e., delay in filing the return, which is attributable to delay in conduct of the audit by auditors appointed by the Government of Tamil Nadu. Also, that the ld.CIT(A)’s reliance on Section 80AC of the Act is misplaced, since the CPC has no power to make disallowance u/s.143(1) of the Act. Even considering the fact the current provision u/s.143(1)(a) enables CPC to make specified adjustment for Section 80P of the Act, such an amendment came into effect only from 01.04.2021 and hence the CPC could not have done adjustment prior to the amendment u/s.143(1)(a) of the Act, even if the return was filed beyond the due date. In the present case, the intimation order was passed on 23.12.2021, which is much before the amendment and hence the disallowance is untenable. In support of these contentions, the ld.counsel for assessee relied on the decision of the division bench of this tribunal in the case of Salem District Child Welfare Org. Asst. TCS Ltd. V. ITO [ITA no.402/CHNY/2023] and thus prayed that the appeal be allowed. 9. Without prejudice to the above, the ld.AR also submitted that the assessee has already filed an application for condonation for filing the return of income u/s.119(2)(b) of the Act before the ld.CCIT, Madurai, which is pending for disposal. Hence, prayed for remitting the issue back to the JAO with a direction to await for the order of the ld.CCIT of condonation petition. 10. Per contra, the ld.DR argued that the order of the ld.CIT(A) confirming the disallowance made by the CPC is right and reiterated the findings of the ld.CIT(A). Printed from counselvise.com :-5-: ITA. No:2874 /Chny/2025 11. We have heard the rival submissions and perused the materials available on record and gone through the orders of the authorities below. The issue involved in the present appeal lies in a narrow compass, i.e., whether the disallowance of deduction claimed u/s.80P of the Act by the CPC in the intimation issued u/s.143(1) of the Act, on account of delay in filing the return of income, is sustainable in the facts and circumstances of the case. 12. It is an undisputed fact that the assessee is a Primary Co-operative Society engaged in the activity of supplying milk produced by its members to a Federal Co-operative Society and is otherwise eligible for deduction u/s.80P(2)(b) of the Act. It is also not in dispute that the return of income for the assessment year under consideration was filed on 20.02.2021, i.e., beyond the due date prescribed u/s.139(1) of the Act, which was 15.02.2021. 13. The primary reason for such delay, as explained by the assessee, is that the statutory audit of the assessee, being a co-operative society, is conducted by auditors appointed by the Government of Tamil Nadu and the audit was completed only on 04.02.2021, leaving a very short time for filing the return. The explanation so offered by the assessee appears to be plausible and not controverted by the Revenue with any material on record. 14. At the same time, it is also a settled position of law that by virtue of the provisions of Section 80AC of the Act, deduction under Chapter VI-A, including Section 80P, is allowable only if the return of income is furnished within the due date prescribed u/s.139(1) of the Act. Therefore, strictly speaking, the claim of the assessee would not be admissible in case of belated filing of return. 15. However, we also take note of the contention of the ld.AR that the power of making adjustment for disallowance of deduction u/s.80P in the processing of return u/s.143(1)(a) of the Act was brought into effect only from 01.04.2021. In the present case, though the intimation u/s.143(1) is dated 23.12.2021, the Printed from counselvise.com :-6-: ITA. No:2874 /Chny/2025 relevant assessment year is 2020-21 and the return was filed on 20.02.2021. Thus, the applicability of the amended provisions enabling such adjustment requires careful consideration. 16. Be that as it may, we find that the assessee has already filed a petition for condonation of delay in filing the return of income before the jurisdictional Chief Commissioner of Income Tax u/s.119(2)(b) of the Act, which is stated to be pending for disposal. The CBDT has also issued Circular No.13/2023 laying down guidelines for condonation of delay in filing returns for claiming deduction u/s.80P of the Act for the relevant assessment years. 17. In our considered opinion, the outcome of such condonation petition would have a direct bearing on the allowability of deduction claimed by the assessee. In the event the delay is condoned by the competent authority, the return filed by the assessee would be treated as having been filed within the prescribed time and consequently, the assessee would be entitled to claim deduction u/s.80P of the Act, subject to fulfilment of other conditions. 18. Considering the totality of facts and circumstances of the case, in the interest of justice, we deem it appropriate to remit the matter back to the file of the Jurisdictional Assessing Officer(JAO) with a direction to await the outcome of the condonation petition filed by the assessee before the ld.CCIT u/s.119(2)(b) of the Act. The JAO shall thereafter adjudicate the issue afresh in accordance with law, depending upon the decision of the competent authority on the condonation petition. 19. Accordingly, the order of the ld.CIT(A) is set aside and the matter is restored to the file of the JAO for fresh adjudication in the light of the above directions. Printed from counselvise.com :-7-: ITA. No:2874 /Chny/2025 20. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 24th March, 2026 at Chennai. Sd/- (एबी ट वक\u0019 ) (ABY T VARKEY) \u000eया\u001aयक सद य/Judicial Member Sd/- (एस. आर. रघुनाथा) (S.R.RAGHUNATHA) लेखासद य/Accountant Member चे\u000eनई/Chennai, .दनांक/Dated, the 24th March, 2026 JPV आदेश क* (\u001aत0ल1प अ2े1षत/Copy to: 1. अपीलाथ'/Appellant 2. ()यथ'/Respondent 3.आयकर आयु3त/CIT– Chennai/Coimbatore/Madurai/Salem 4. 1वभागीय (\u001aत\u001aन ध/DR 5. गाड% फाईल/GF Printed from counselvise.com PRASANNA VANI JETTY Digitally signed by PRASANNA VANI JETTY Date: 2026.03.27 12:33:18 +05'30' "