SHREE SIDH BALAJI SAKH SAHKARITA MARYADIT,UJJAIN V. .ASST DIRECTOR CPC, BANGALORE

ITA 413/IND/2024

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The case involves Shree Sidh Balaji Sakh Sahkarita Maryadit, a cooperative society, which appealed against the disallowance of a deduction under section 80P of the Income Tax Act, amounting to Rs. 1,79,940, added to its total income for the assessment year 2019-20. The deduction was initially disallowed by the CPC during the processing of the return under section 143(1) due to the return being filed after the due date. The assessee's appeal to the Commissioner of Income-tax (Appeals) was unsuccessful, leading to the current appeal before the Tribunal. The Tribunal referenced a similar case and precedent, finding that the disallowance was not permissible under the law as it stood for the relevant assessment year.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 34657 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2019-2020
• Appeal Filed On: 01-05-2024
• Other Referred Cases: Nagar Palika Nigam Karmchari Kalyan Sakh Sahakari Sanstha Maryadit vs. CPC, Bangaluru/CIT, NFAC, Delhi, Chakargadh Seva Sahakari Mandali Ltd. Vs. The DCIT (CPC), Bengalurur
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV H.BHAGAT
• Assessee Lawyers: SONAM KHANDELWAL
• Keywords: Set aside; Rule of consistency
• Section: 143(1); 139(1); 80P; 139(4)

Judgement Text

"Page 1 of 7 आयकर अपीलीय अिधकरण, इंदौर Ɋायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRIB.M. BIYANI, ACCOUNTANT MEMBER ITA No.413/Ind/2024 Assessment Year : 2019-20 Shree Sidh Balaji Sakh Sahkarita Maryadit, Ramghat Marg, Ujjain बनाम/ Vs. Assistant Director CPC, Bangalore (Assessee / Appellant) (Revenue / Respondent) PAN: AAJA57480G Assessee by Ms.Sonam Khandelwal, Adv. Revenue by Shri Sanjeev H.Bhagat, Sr. DR Date of Hearing 09.12.2024 Date of Pronouncement 10.12.2024 आदेश/O R D E R Per Vijay Pal Rao, VP: This appeal by the assessee is directed against the order dated 28th February, 2024, of Commissioner of Income-tax (Appeals), National Faceless Centre, Ahmedabad, for the assessment year 2019-20. 2. The assessee has raised solitary ground as under :- “The deduction u/s 80P of Rs.1,79,940/- has been disallowed and added to the total income of the assessee, which is unjustified and liable to set aside. ” Shree Sidh Balaji Sakh Sahkarita Maryadit, Ujjain ITA No.413/Ind/2024 Assessment year 2019-20 Page 2 of 7 3. The assessee is a cooperative society registered under Cooperative Societies Act. The assessee filed its return of income u/s 139(4) of the Act, on 30th September, 2020, the extended date vide C.B.D.T. Notification No. 56 of 2020. The assessee claimed deduction u/s 80P on the income derived from the business of banking and providing credit facilities to its members. The return was processed by C.P.C. u/s 143(1) vide order dated 23rd November, 2020, whereby the claim of deduction u/s 80P was disallowed and addition of Rs. 1,79,940/- was made on this account. The assessee challenged the action of C.P.C. before the Ld. CIT(A), but could not succeed. 4. We have heard the Ld. Authorized Representative of the assessee as well as the Ld. Departmental Representative and considered the material on record. The Ld. Authorized Representative of the assessee has relied upon the decision of this Tribunal dated 09.09.2024 in the case of Nagar Palika Nigam Karmchari Kalyan Sakh Sahakari Sanstha Maryadit, Ujjain, vs. CPC, Bangaluru/CIT, NFAC, Delhi, in I.T.A.No. 198/Ind/2024. 5. On the other hand, the Ld. Departmental Representative has submitted that the Ld. CIT(A) has confirmed the disallowance by following the decision of Mumbai Bench of the Tribunal. 6. Having considered the rival submissions and careful perusal of the record, at the out-set, we note that an identical issue of disallowance of deduction u/s 80P by the CPC, while processing the return u/s 143(1) has been considered by this Tribunal in the case of Nagar Palika Nigam Shree Sidh Balaji Sakh Sahkarita Maryadit, Ujjain ITA No.413/Ind/2024 Assessment year 2019-20 Page 3 of 7 Karmchari Kalyan Sakh Sahakari Sanstha Maryadit (supra) in para 6 to 9 as under :- “6. We first refer section 80AC, which is the basis of impugned disallowance, as applicable to relevant AY 2019-10 reading as under: “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.-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.” In present case of assessee, the deduction u/s 80P for AY 2019-20 is involved. Therefore, the case of assessee fits in clause (ii) of section 80P re-produced above and the lower-authorities, on a plain reading of section 80AC, were within power to hold that deduction u/s 80P was not allowable to assessee for non-filing of return upto 31.08.2019 which was due date for filing of return u/s 139(1). 7. However, the case of assessee requires us to go further and look other legal provisions as advanced by Ld. AR. Firstly, we need to check whether the belated return filed by assessee u/s 139(4) on 30.09.2020 was itself valid or not? We find that in the light of CBDT’s order dated 30.09.2020 u/s 119(2)(a) placed by Ld. AR before us, the assessee could very well file belated return u/s 139(4) upto 30.11.2020 and therefore the return filed on 30.09.2020 was a valid return. The CBDT’s order is re-produced below for an immediate reference: Shree Sidh Balaji Sakh Sahkarita Maryadit, Ujjain ITA No.413/Ind/2024 Assessment year 2019-20 Page 4 of 7 8. Going next, we find a strong merit in Ld. AR’s contention that the AO had no authority to make the impugned disallowance in the intimation u/s 143(1) because the provision of section 143(1) exiting at that time, did not permit such disallowance for AY 2019-20 involved in present appeal. This issue is elaborately dealt and decided by ITAT, Shree Sidh Balaji Sakh Sahkarita Maryadit, Ujjain ITA No.413/Ind/2024 Assessment year 2019-20 Page 5 of 7 Rajkot Bench in Chakargadh Seva Sahakari Mandali Ltd. Vs. The DCIT (CPC), Bengalurur, ITA No. 187/Rjt/2022 order dated 19.07.2023 for the very same AY 2019-20, copy of ITAT’s order is filed by Ld. AR at Page 36-47 of Paper-Book. The relevant paras of order are re-produced below: 7. We have heard the rival contentions and perused the material on record. In the instant facts, admittedly the assessee did not file return of income within the time permissible under section 139(1) of the Act. However, the assessee filed its return of income belatedly on 28-11- 2020 and claimed deduction of 5,58,494/- under section 80P of the Act. The issue for consideration before us is that whether once the return of income is filed beyond the prescribed date under section 139(1) of the Act, can the deduction under section 80P of the Act be denied to the assessee, by way of adjustment under section 143(1) of the Act. On going through the statutory provisions, we observe 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 under section 139(1) 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 furnished beyond the due date specified under sub-section (1) of section 139. This amendment has been introduced w.e.f. 1-4-2021. Accordingly, the above amendment would not apply to the impugned assessment year. Further, section 143(1)(ii) of the Act permits adjustment in case of an incorrect claim, if such incorrect claim is apparent from any information in the return. However, Explanation to the aforesaid section specifies the following cases where the claim made in the return of income can be said to be “incorrect” for the purposes of this sub- section: “(a) \"an incorrect claim apparent from any information in the return\" shall mean a claim, on the basis of an entry, in the return,— (i) of an item, which is inconsistent with another entry of the same or some other item in such return; (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction.” 7.1 A joint reading of the above provisions makes it evident that the claim of deduction under section 80P of the Act cannot be Shree Sidh Balaji Sakh Sahkarita Maryadit, Ujjain ITA No.413/Ind/2024 Assessment year 2019-20 Page 6 of 7 allowed the assessee, if the assessee does not file its return of income within the due date stipulated under section 139(1) of the Act w.e.f. assessment year 2018-19 onwards. However, we also note that amendment has been introduced in section 143(1)(a)(v) of the Act to provide that the claim of deduction under section 80P of the Act can be denied to the assessee, in case the assessee does not file its return of income within the time prescribed under section 139(1) of the Act with effect from 01-04- 2021 and does not apply to the impugned assessment year i.e. assessment year 2019-20 relevant to financial year 2018-19. Accordingly, in our considered view, denial of claim under section 80P of the Act would not come within the purview of prima facie adjustment under section 143(1)(a)(v) of the Act, for the simple reason that the section was not in force during the period under consideration i.e. assessment year 2019-20. 7.2 The second issue for consideration is that whether the case of the assessee would fall within the purview of prima facie adjustment under section 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return). In our view, the scope of the adjustments that can be made under the said provision has been elaborated in the Explanation to the aforesaid section, which does not include denial of deduction claimed by the assessee in case the assessee does not furnish its return of income within the date stipulated under section 139(1) of the Act. The Explanation to the said section specifically provides for cases/instances when the claim made by the assessee could be said to be “incorrect”. Therefore, in our considered view, the case of the assessee would also not fall within the purview of prima facie adjustment under section 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return).” 9. Thus, the case of assessee is squarely covered by order of ITAT, Rajkot. Respectfully following the same, we too hold that the impugned disallowance made by AO in intimation u/s 143(1) for AY 2019-20 on the basis that return was not filed upto due date u/s 139(1), is not tenable. Accordingly, we direct the AO to allow deduction. The assessee’s appeal is allowed.” 7. To maintain the rule of consistency, we follow the earlier order of the Tribunal and hold that the disallowance made by CPC while processing the return u/s 143(1) for the assessment year 2019-20, on the ground of delay in filing the return is not tenable as such disallowance/adjustment was Shree Sidh Balaji Sakh Sahkarita Maryadit, Ujjain ITA No.413/Ind/2024 Assessment year 2019-20 Page 7 of 7 beyond the scope of the provisions for section 143(1) as existed at that point of time. Accordingly, the AO is directed to allow the deduction u/s 80P claimed by the assessee. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 10.12.2024. sd/- sd/- ( B.M.BIYANI ) ( VIJAY PAL RAO) ACCOUNTANT MEMBER VICE PRESIDENT Indore िदनांक/Dated : 10.12.2024. CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore "