Aditya Vivdhoddeshagala Sahakara Sangha Niyamita Vs ITO (ITAT Bangalore)
Summary: The Bangalore ITAT allowed the assessee’s appeal concerning deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961. The dispute arose for Assessment Year 2016-17 after the assessee, a society registered under the Karnataka Souharda Sahakari Act, 1997 and engaged in accepting deposits and providing credit facilities to its members, did not file its original return under section 139(1). Following a notice under section 148, the assessee filed a return declaring NIL income and claimed deduction under section 80P(2)(a)(i) of Rs.9,43,253/-.
The Assessing Officer denied the deduction on two grounds. First, the AO invoked the sixth proviso to section 139(1) and section 80AC, holding that the deduction could not be allowed because the return had not been filed within the prescribed due date. Second, the AO held that interest income earned from bank deposits was assessable as income from other sources and was not eligible for deduction under section 80P(2)(a)(i). The CIT(A) confirmed the disallowance, additionally relying upon section 80A(5).
On the return-filing issue, the Tribunal held that the sixth proviso to section 139(1), as applicable to AY 2016-17, did not include a co-operative society among the specified entities and did not expressly cover section 80P. The Tribunal further held that section 80AC, as applicable for AY 2016-17, covered deductions under sections 80-IA to 80-IE and did not include section 80P. The expanded scope of section 80AC covering section 80P was introduced with effect from 1 April 2018.
