Maruthi Primary Agricultural Cooperative Credit Society Limited Vs ITO (ITAT Visakhapatnam)
The Income Tax Appellate Tribunal (ITAT), Visakhapatnam, dismissed the appeal filed by a Primary Agricultural Cooperative Credit Society (PACS) and upheld the denial of deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961 for Assessment Year 2017-18. The Tribunal held that the assessee was not entitled to the deduction because it had failed to file a valid return of income in accordance with Section 139 of the Act and, therefore, could not satisfy the requirement of Section 80A(5).
The assessee, a Primary Agricultural Cooperative Credit Society engaged in providing banking or credit facilities to its members, had made cash deposits of ₹3,00,500 during the demonetisation period. The Income Tax Department noticed that no return of income had been filed within the prescribed time. Notices under Section 142(1) were issued requiring the assessee to file its return, but the assessee did not comply. Thereafter, the Assessing Officer (AO) initiated best judgment assessment proceedings under Section 144. During the assessment proceedings, the assessee furnished its trading account, income and expenditure account, and balance sheet, claiming deduction under Section 80P on the entire profit of ₹45,82,406. The AO held that since no return of income had been filed, Section 80A(5) barred the claim for deduction under Section 80P and assessed the entire profit to tax. The Commissioner (Appeals) affirmed the assessment.
