Madhu Souharda Pathina Sahakari Niyamitha Vs ITO (Karnataka High Court)
Miss the Due Date, Miss U/s 80P: No Second Chances-Late Return, No Relief: U/s80P Strictly Time-Barred- Karnataka HC
The Karnataka High Court dismissed the assessee’s appeal and upheld denial of deduction under Section 80P where no return of income was filed.
The assessee, an AOP, failed to file its return despite notice u/s 142(1), leading to a best judgment assessment u/s 144. It argued that even in such assessment, the AO must grant eligible deductions like Section 80P, & that Section 80A(5) applies only where a return is filed without claiming the deduction.
Rejecting this, the Court held that Section 80A(5) clearly mandates that no deduction under Chapter VI-A shall be allowed unless it is claimed in the return of income. This condition applies even more strictly where no return is filed at all-an assessee cannot be placed in a better position merely because no return was filed.
The Court further clarified that while Section 80AC (post-2018) imposes an additional requirement of timely filing, Section 80A(5) independently bars deduction if no claim is made in the return. Even in a Section 144 assessment, the AO is not obliged to grant deductions that are statutorily conditional upon a return-based claim.
Endorsing the Kerala High Court view, the Court held that deduction u/s 80P is permissible only when claimed through a valid return. Accordingly, no substantial question of law arose, and the appeal was dismissed.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
