Shree Dhamel Seva Sahkari Mandali Ltd Vs Asstt. Director of Income Tax (CPC) (ITAT Rajkot)
In a significant ruling for co-operative societies, the Income Tax Appellate Tribunal (ITAT) Rajkot Bench has held that the deduction under Section 80P of the Income Tax Act, 1961, should not be denied to co-operative societies merely because their income tax returns were filed belatedly under Section 139(4) of the Act, rather than within the original due date specified under Section 139(1). The ITAT set aside the orders of the Commissioner of Income Tax (Appeals) and remanded three identical cases back to the Assessing Officer for fresh consideration.
The cases, including the lead case of Shree Dhamel Seva Sahkari Mandali Ltd., pertained to the Assessment Year 2019-20. The assessees, all co-operative societies, had filed their income tax returns beyond the extended due date under Section 139(1). For instance, Shree Dhamel Seva Sahkari Mandali Ltd. filed its return on November 30, 2020, against an extended due date of August 31, 2019. In these returns, the societies claimed deductions under Section 80P, which provides for deductions in respect of income of co-operative societies.
However, the Centralized Processing Centre (CPC), Bengaluru, disallowed the entire Section 80P deduction while processing the returns under Section 143(1) of the Act. The CPC’s reasoning was based on Section 80AC(ii) of the Act, which stipulates that certain deductions, including those under Chapter VI-A (where Section 80P falls), are admissible only if the return is furnished within the time allowed under Section 139(1). The Commissioner of Income Tax (Appeals) subsequently upheld the CPC’s action, confirming the disallowance.
