Sanchar Gramin Bigarsheti Vs ITO (ITAT Pune)
Conclusion: Since it was only from 01.04.2018, furnishing of income-tax turn u/s.139(1) was made mandatory for claiming deduction u/s.80P. The case of assessee pertained to AYrs. 2015-16 and 2016-17 the amendment brought in by the Finance Act, 2018 w.e.f. 01.04.2018 will not be applicable to assessee and therefore even if the income-tax return was not furnished by assessee society u/s.139(1), for the purpose of computing the total income, assessee was eligible for deduction u/s.80P.
Held: Assessee was a cooperative credit society engaged in lending and investment activities, filed income tax returns for AY 2015-16 and 2016-17. Based on information regarding cash deposits of ₹1.37 crore and ₹74.13 lakh, AO issued notices under Sections 148, 143(2), and 142(1). Assessee then filed returns in response to the notice under Section 148, claiming a deduction under Section 80P. AO disallowed the deduction, stating that the returns were not filed within the due date under Section 139(1). Aggrieved by this order, assessee appealed to CIT (Appeals), where the commissioner upheld AO’s decision, leading assessee to approach the ITAT, where the authorised representative for the assessee argued that Section 80AC was not applicable about the claim of deduction under Section 80P for the AYs under consideration. AO argued that assessee failed to file returns within the due date under Section 139(1). This made assessee not eligible for Section 80P deductions, relying on the post-2018 amendment to Section 80AC. It was held that the amendment to Section 80AC through the Finance Act 201 would only apply prospectively from AY 2018-19 onward. Tribunal noted that for AY 2015-16 and AY 2016-17, the condition of filing a return within the due date under Section 139(1) did not apply to Section 80P. Since the appellants had filed returns in response to notice under Section 148, they could not be denied the deduction solely on the grounds of delayed filing. By relying on a ruling by the Nagpur Bench of ITAT in Krushi Vibhag Karmachari Vrund Sahakari Pat Sanstha Maryadit vvsITO (2022) that Section 80P deductions were not restricted by Section 80AC before its amendment in 2018. Disallowance under Section 80P was incorrect. Tribunal remanded the case to AO for determining the quantum of deduction, directing that assessee must provide a copy of the registration certificate to prove cooperative society status and that the audited financial statements for both years should be reviewed.
