SRI KALABHAIRAWESHWARA MULTI-PURPOSE CO-OP.SOCIETY LIMITED,CHIKKAMAGALURU V. INCOME TAX OFFICER, WARD-1, CHIKKAMAGALURU

SA 88/BANG/2025

AI Insights

The case involves Sri Kalabhairaweshwara Multi-purpose Co-op. Society Ltd., which appealed against the order of the CIT(A) confirming the Assessing Officer's decision to deny a deduction under section 80P of the Income Tax Act due to the late filing of the income tax return. The Tribunal noted that while the deduction under section 80P(2)(a)(i) was not applicable due to the late filing, the income should be calculated based on the net profit after deducting all corresponding costs, not just the gross receipts. The Tribunal's decision was influenced by the lack of counterarguments from the Department's representative and the precedent set in a previous similar case involving the same assessee for a different assessment year.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774957 (ITAT-BANGALORE)
• Duration Of Justice: 19 day(s)
• Appeal Type: Stay Application
• Pronouncement Date: 01-09-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Appeal Filed On: 13-08-2025
• Other Referred Cases: ITA No. 1344/Bang/2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GANESH R GHALE; STANDING COUNSEL
• Assessee Lawyers: MAHESH R UPPIN
• Keywords: Set aside
• Section: 148; 139

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.1792/Bang/2025 & S.A No.88/Bang/2025 Assessment Year: 2019-20 Sri Kalabhairaweshwara Multi-purpose Co-op. Society Ltd., K.M Road, Mudigere, Chikkamagallluru District – 577 101. PAN – AAPAS 3058 L Vs. The Income Tax Officer, Ward – 1, Chikkamagaluru – 577 101. . APPELLANT RESPONDENT Assessee by : Shri Mahesh R Uppin, Advocate Revenue by : Shri Ganesh R Ghale, Standing Counsel for Department Date of hearing : 01.09.2025 Date of Pronouncement : 01.09.2025 O R D E R PER WASEEM AHMED, ACCOUNTAN MEMBER: This is an appeal filed by the assessee against the order passed by the NFAC, Delhi vide order dated 16/06/2025 in DIN No. ITBA/NFAC/S/250/2025-26/1077046791(1) for the assessment year 2019-20. Printed from counselvise.com ITA No.1792/Bang/2025 SA 88/Bang/2025 Page 2 of 5 . 2. The only issue raised by the assessee is that the learned CIT(A) erred in denying the benefit of deduction claimed by the assessee under section 80P of the Act, on account of non-filing of the return of income within the due date specified under section 139 of the Act. 3. In the present case, the assessee is a co-operative society. The assessee failed to file the return of income under section 139(1) of the Act. Accordingly, proceedings were initiated under section 148 of the Act. The assessee, in response to the notice issued under section 148 of the Act, claimed deduction under section 80P(2)(a)(i) of the Act amounting to ₹38,58,079.00. However, the same was denied by the AO under the provisions of section 80AC of the Act on account of non-filing of the return of income within the time stipulated under section 139(1) of the Act. On appeal, the learned CIT(A) confirmed the finding of the AO. 4. Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. 5. The learned AR before us fairly admitted that the assessee was denied the benefit of section 80P(2)(a)(i) of the Act for the assessment ear 2018–19 on account of non-filing of the return of income within the stipulated time specified under section 139(1) of the Act. Such denial of deduction was also upheld by the ITAT in ITA No. 1344/Bang/2024 for the assessment year 2018–19, vide order dated 17 October 2024. Printed from counselvise.com ITA No.1792/Bang/2025 SA 88/Bang/2025 Page 3 of 5 . 6. Accordingly, the learned AR submitted that the benefit of deduction under section 80P of the Act can also be denied for the year in dispute. However, the learned AR further submitted that the assessee has claimed deduction of the interest income under section 80P(2)(a)(i) of the Act on a gross basis i.e. ₹38,58,079.00 which has been made subject to addition. This means that the corresponding cost incurred by the assessee against such interest income was not allowed while calculating the income of the assessee. According to the learned AR, the net income of the assessee stands at ₹17,20,751 only, and therefore, only this net income should be made subject to taxation, instead of the gross receipt representing interest ₹38,58,079.00 only. 7. On the other hand, the learned DR could not controvert the arguments advanced by the learned AR for the assessee. 8. We have heard the rival contentions of both parties and perused the materials available on record. On perusal of the statement of income placed at page 32 of the appeal set, we note that the gross total income of the assessee stands at ₹17,20,751 only, whereas the assessee has claimed the deduction of ₹38,58,079 under section 80P of the Act. The AO held that since the return was filed late, the assessee is not eligible for deduction under section 80P of the Act. 8.1 It is true that the assessee is not eligible for deduction under section 80P(2)(a)(i) of the Act, but it has to be seen how the income of the assessee should be calculated for taxation. In our considered view, it is the net income of the assessee which should be brought to tax after allowing the deduction of all the corresponding costs within the Printed from counselvise.com ITA No.1792/Bang/2025 SA 88/Bang/2025 Page 4 of 5 . provisions of law. At the time of hearing, the learned DR also did not bring anything on record contrary to the findings of the learned CIT(A). 8.2 Accordingly, we hold that it is the amount of net profit shown by the assessee in the books of accounts which should be brought to tax. In the present case, such net profit after all expenses is ₹17,20,751.00. only. Therefore, we set aside the finding of the learned CIT(A) and direct the AO to tax the income of the assessee at ₹17,20,751 after necessary verification as per law. Hence, the ground of appeal of the assessee is allowed for statistical purposes. 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Coming to the stay petition bearing No. 88/Bang/2025 filed by the assessee. 10. In this regard, we note that once the main appeal filed by the assessee has been disposed of, there is no reason to adjudicate the stay petition filed by the assessee. As such, the stay petition filed by the assessee in the given facts and circumstances becomes infructuous and does not require any separate adjudication. Accordingly, the stay petition filed by the assessee is hereby dismissed as infructuous. 11. In the result, the stay petition filed by the assessee is hereby dismissed as infructuous. Printed from counselvise.com ITA No.1792/Bang/2025 SA 88/Bang/2025 Page 5 of 5 . 12. In the combined result, the appeal filed by the assessee is allowed for statistical purposes whereas the stay petition filed by the assessee is hereby dismissed as infructuous. Order pronounced in court on 1st day of September, 2025 Sd/- Sd/- (KESHAV DUBEY) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 1st September, 2025 / vms / Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore Printed from counselvise.com "