Swahalwa Co-operative Agriculture Service Society Ltd. Vs ITO (ITAT Chandigarh)
The Chandigarh Bench of the Income Tax Appellate Tribunal considered an appeal for Assessment Year 2018–19 arising from denial of deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961. The assessee, a primary agricultural co-operative society, filed its return of income on 06 December 2018 claiming a deduction of ₹2,41,781. The due date for filing the return under section 139(1) was 31 August 2018. While processing the return under section 143(1), the Centralized Processing Centre denied the deduction on the ground that the return was filed belatedly. A rectification application filed by the assessee was rejected by the Assessing Officer by invoking section 80AC, which mandates that deductions under Chapter VI-A are allowable only if the return is filed within the due date. The Commissioner of Income Tax (Appeals) upheld this rejection.
Before the Tribunal, it was noted that section 80AC, as substituted with effect from 01 April 2018, clearly bars allowance of deduction under section 80P where the return is not furnished within the prescribed due date. However, the Tribunal took note of CBDT Circular No. 13 of 2023 dated 26 July 2023, which provides a mechanism for condonation of delay under section 119(2)(b) for co-operative societies claiming deduction under section 80P for assessment years 2018–19 to 2022–23. The circular recognises that delays may occur due to late completion of audits under State laws and authorises the Chief Commissioners or Directors General of Income Tax to decide such condonation applications on merits, subject to specified conditions.
