VILLUPURAM DISTRICT VILLAGE ADMINISTRATIVE OFFICER COOPERATIVE THRIFT AND CREDIT SOCIETY LTD,VILLUPURAM V. COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI

ITA 143/CHNY/2024

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The case involves the Villupuram District Village Administrative Officer Co-operative Thrift and Credit Society Limited, the appellant, contesting an intimation by the Centralized Processing Center (CPC) under Section 143(1) of the Income Tax Act, which denied them a deduction under Section 80P due to a delayed filing of the income tax return for the Assessment Year 2019-20. The Additional/Joint Commissioner of Income Tax (Appeals)-12, Mumbai, upheld this denial, leading to the current appeal before the Income Tax Appellate Tribunal. The Tribunal referenced a similar case, Chennai Kulalars Co-operative Credit Society Limited vs. DCIT, and noted that the relevant amendments to Section 143(1)(a) allowing such adjustments were only applicable from April 1, 2021, thus prior to this date, no adjustments could be made regarding Section 80P deductions for the Assessment Year 2019-20.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 29467 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-09-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 19-01-2024
• Other Referred Cases: Chennai Kulalars Co-operative Credit Society Limited vs. DCIT (ITA NO.712/Chny/2022 for AY 2018-19)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. ANITA LD.
• Keywords: Co-operative Credit Society; FORM 26AS
• Section: 143(1); 80P; 10AA

Judgement Text

" आयकर अपीलीय अिधकरण “सी” \u000eा यपीठ चे\u0013ई म\u0016। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, CHENNAI मा ननीय \u0019ी एबी टी. वक\u001f, \u000eा ियक सद\" एवं माननीय \u0019ी मनोज क ुमार अ'वाल ,लेखा सद\" क े सम)। BEFORE HON’BLE SHRI ABY T. VARKEY, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ ITA No.143/Chny/2024 (िनधा*रण वष* / Assessment Year: 2019-20) Villupuram District Village Administrative Officer Co-operative Thrift and Credit Society Limited #102, Subathra Complex, Villupuram-605 602. बनाम/ Vs. ITO Ward-1, Villupuram. \u0002थायीलेखासं./जीआइआरसं./PAN/GIR No. AACAV-5363-Q (अपीलाथ\u001c/Appellant) : (\u001f थ\u001c / Respondent) अपीलाथ\u001cकीओरसे/ Appellant by : None \u001f थ\u001cकीओरसे/Respondent by : Ms. R. Anita ( Addl.CIT) -Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 25-09-2024 घोषणाकीतारीख /Date of Pronouncement : 09-10-2024 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2019-20 arises out of the order of learned Addl. / Joint Commissioner of Income Tax (Appeals)-12, Mumbai [CIT(A)] dated 20-11-2023 in the matter of an intimation issued by CPC u/s 143(1) of the Act on 20-01-2021. In the intimation, the assessee was denied deduction u/s 80P since the return of income was filed with a delay. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. At the time of 2 hearing, none appeared for assessee. The Ld. Sr. DR pleaded for dismissal of the appeal. 2. We find that this issue has been decided favorably by the Tribunal in the case of Chennai Kulalars Co-operative Credit Society Limited vs. DCIT (ITA NO.712/Chny/2022 for AY 2018-19) holding that such an adjustment could have been made by CPC only w.e.f. Assessment Year (AY) 2021-22 since the amendment to Sec. 143(1)(a) was made by Finance Act, 2021 w.e.f. 01-04-2021. The adjudication of co-ordinate bench was under: - 3. The relevant provisions of Section 143(1)(a) prescribing processing of return of income (as amended by Finance Act, 2018), as applicable to AY 2018-19, read as under: 143(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:— (a) the total income or loss shall be computed after making the following adjustments, namely:— (i) any arithmetical error in the return; (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; (iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub- section (1) of section 139; (iv) disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return; (v) disallowance of deduction claimed under sections 10AA. 80-IA. 80-IAB. 80- IB. 80-IC. 80-ID or section 80-IE. if the return is furnished beyond the due date specified under sub- j section (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return: It could be seen that sub-clause (v) covers only specified Sections and do not cover Sec.80P. In other words, no adjustment of deduction claimed u/s 80P could have been made while processing the return of income. 4. The sub-clause (v) has been amended by Finance Act, 2021 and the amended sub- clause read as under: - …… (v) disallowance of deduction claimed under section 10AA or under any of the provisions of Chapter VI-A under the heading \"C.—Deductions in respect of certain incomes\", ifthe return is furnished beyond the due date specified under sub-section (1) of section 139: or ……. 3 Section 80P fall under Chapter VI-A under the heading “C-Deductions in respect of certain incomes”. The rational for the amendment, as given in the memorandum explaining the provisions in the Finance Bill, 2021 is as under: - Rationalisation of the provision relating to processing of returned income and issuance of notice under sub-section (2) of section 143 of the Act. The existing provisions of clause (a) of sub-section (1) of section 143 of the Act provides that at the time of processing of return of income made under section 139, or in response to a notice under sub-section (1) of section 142, the total income or loss shall be computed after making the adjustments specified in clauses (i) to (vi) therein. It is proposed to amend the following provisions of sub-section (1) of section 143 of the Act,- (i) Amend sub-clause (iv) of clause (a) of sub-section (1) of the section 143 of the Act, to allow for the adjustment on account of increase in income indicated in the audit report but not taken into account in computing the total income. (ii) Amend sub-clause (v) of clause (a) of sub-section (1) of the section 143 of the Act so as to give consequential effect to amendment carried out in section 80 AC vide Finance Act, 2018. (iii) Amend the provisions of section 143 to reduce the time limit for sending intimation under sub-section (1) of section 143 of the Act from one year to nine months from the end of the financial year in which the return was furnished. Consequently, it is also proposed to reduce the time limit for issue of notice under sub-section (2) of section 143 of the Act from six months to three months from the end of the financial year in which the return is furnished. These amendments will take effect from 1st April, 2021 5. It could thus be seen that the enabling provisions allowing specified adjustment for Sec. 80P u/s 143(1)(a) has been brought on statute only with effect from 01.04.2021 and before that no such adjustment of deduction u/s 80P could have been done by the CPC u/s 143(1)(a) even if the return of income was filed beyond due date as specified u/s 139(1). No doubt, the provisions of Sec.80AC mandate denial of deduction u/s 80P even for AY 2018-19. However, in our considered opinion, without there being corresponding enabling provisions u/s 143(1)(a), no such adjustment could have been made by CPC for AY 2018- 19. The same is amply clear from the memorandum explaining the provisions in the Finance Bill, 2021 as extracted above. Considering the same, we direct revenue to grant deduction u/s 80P as claimed by the assessee in the return of income. No other ground has been urged before us. 6. The appeal stand partly allowed. 3. Respectfully following the same, we direct Ld. AO to grant impugned deduction as claimed by the assessee. 4 4. The appeal stands allowed. Order pronounced on 9th October, 2024 Sd/- Sd/- (ABY T. VARKEY) (MANOJ KUMAR AGGARWAL) \u000eा ियक सद\" /JUDICIAL MEMBER लेखा सद\" / ACCOUNTANT MEMBER चे4ई Chennai; िदनांक Dated : 09-10-2024 DS आदेशकीHितिलिपअ'ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u001c/Appellant 2. \u001f थ\u001c/Respondent 3. आयकरआयु=/CIT Chennai. 4. िवभागीय\u001fितिनिध/DR 5. गाडBफाईल/GF "