80P Deduction Denied Due to Late Return? Tribunal Sends Case Back Pending Delay Condonation Decision

S373 The Slm Corporation HSC and High School Staff Co-Op T&C Soc Ltd. Vs ITO (ITAT Chennai)

The appeal before the ITAT Chennai arose from an order passed by the Addl./JCIT(A), Ranchi dated 12.12.2025 for Assessment Year 2019–20. The assessee, a co-operative society registered under the Tamil Nadu Cooperative Societies Act, 1983, had filed its return of income belatedly on 12.10.2020.

The Central Processing Centre (CPC), through an intimation under Section 143(1) dated 13.01.2021, disallowed the deduction claimed under Section 80P of the Income Tax Act, 1961 on the ground that the return was not filed within the time prescribed under Section 139.

The assessee challenged this before the First Appellate Authority (FAA), which upheld the disallowance. Aggrieved, the assessee filed an appeal before the Tribunal. During proceedings, the assessee submitted that it had filed a condonation petition dated 12.12.2025 before the CCIT, Coimbatore under Section 119(2)(b) seeking condonation of delay in filing the return under Section 139(1), and that the petition was still pending. It was argued that the outcome of this petition would directly affect the eligibility for deduction under Section 80P, and therefore, the matter should be restored to the Assessing Officer (AO) to await the decision of the competent authority.

The Departmental Representative supported the FAA’s order.

The Tribunal, after considering submissions and records, observed that the condonation application under Section 119(2)(b) had a direct bearing on the claim of deduction under Section 80P. It held that if the delay in filing the return is condoned, the deduction claim must be examined on merits by the AO. Since the condonation application was pending, the Tribunal found it appropriate to restore the matter to the AO.

Accordingly, the AO was directed to pass a fresh order after the competent authority decides the condonation petition. The appeal was allowed for statistical purposes.

Appellant was represented by : Shri S.R. Krishnan, Advocate

FULL TEXT OF THE ORDER OF ITAT CHENNAI

This appeal filed by the assessee is directed against the Addl/JCIT(A), Ranchi order dated 12.12.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2019-20.

2. Brief facts of the case are as follows: The assessee is a Co­operative society registered under The Tamilnadu Cooperative Societies Act, 1983. For the relevant assessment year 2019-20, the assessee society has filed its return of income belatedly on 12.10.2020. The return was processed by the CPC, which issued an intimation under section 143(1) of the Act dated 13.01.2021, wherein the deduction claimed under section 80P of the Act was disallowed on the ground that the return of income was not filed within the time prescribed u/s. 139 of the Act.

3. Aggrieved by the intimation issued u/s.143(1) of the Act, the assessee filed appeal before the First Appellate Authority (‘FAA’). After considering the submissions of the assessee, the FAA confirmed the order of the AO.

4. Aggrieved by the order of the FAA, the assessee has filed the present appeal before the Tribunal. The Ld.AR submitted that the assessee has filed a condonation petition dated 12.12.2025 vide Acknowledgement No.851679871121225 before the CCIT, Coimbatore u/s.119(2)(b) of the Act praying for condonation of delay in filing return of income u/s.139(1) of the Act, which is presently pending for consideration. It was further submitted that since the condonation petition u/s. 119(2)(b) of the Act before the competent authority has a direct bearing, the matter may be restored to the files of the AO to await the decision of the Competent Authority on the condonation application filed in terms of section 119(2)(b) of the Act.

5. The Ld.DR supported the order of the FAA.

6. We have heard rival submissions and perused the material on record. The assessee had approached the Competent Authority u/s.119(2)(b) of the Act for condonation of delay in filing return of income u/s.139(1) of the Act. The assessee’s application for condonation of delay u/s.119(2)(b) of the Act has a direct bearing as regards the claim of deduction u/s.80P of the Act. In event the competent authority condones the delay in filing the return of income filed by the assessee necessarily the claim of deduction u/s.80P of the Act has to be considered on merits by the concerned AO. Since the assessee’s application of condonation of delay in filing the return of income is pending consideration before the Competent Authority, we deem it appropriate to restore the case to the files of the AO. The AO is directed to pass afresh order after the Competent Authority has passed the order regarding the assessee’s petition for condonation of delay in filing the return of income. It is ordered accordingly.

7. In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 21^st April, 2026 at Chennai.