Case Law Details
Somalwar Academy Education Societies Employees Co-op. Credit Society Mar Vs DCIT (CPC) (ITAT Nagpur)
Belated Return Cannot Deny 80P Deduction – Tribunal Follows Kerala HC Ruling-No 143(1)(a)(v) Power Before 01.04.2021 – Adjustment Held Invalid; ITAT Nagpur allowed the appeal by holding that deduction claimed u/s 80P cannot be denied merely because return was belated.
Assessee, a cooperative credit society, filed its return on 26.03.2019 claiming deduction of Rs. 7,46,340/- u/s 80P. CPC while processing return u/s 143(1) on 04.07.2019 disallowed the claim on the ground that return was not filed within due date u/s 139(1). CIT(A)/NFAC confirmed disallowance, relying on Bombay HC decision in EBR Enterprises Vs. UOI (W.P. No. 1415/2019).
Before Tribunal, Assessee contended that prior to 01.04.2021 there was no enabling provision under s.143(1)(a)(v) to make such adjustment at processing stage. It further relied on Kerala HC in Chirakkal Service Co-op. Bank Ltd. Vs. CIT (68 taxmann.com 298) which held that even belated returns can be considered for deduction u/s 80P, provided assessment proceedings are pending in statutory hierarchy.
Tribunal observed that return filed on 26.03.2019 was available on record when CPC processed the case on 04.07.2019, hence could not be treated as non-est. Following Chirakkal Service Co-op. Bank Ltd., it held that authorities below erred in denying deduction solely for delay in filing return. Accordingly, it allowed the appeal & directed AO to examine Assessee’s claim on merits & compute tax liability accordingly. Thus, the appeal was allowed in favour of the Assessee.
This ruling reaffirms that in absence of express provision, deduction u/s 80P cannot be denied at processing stage merely because return is belated, & belated return is still valid for claiming statutory deduction.
FULL TEXT OF THE ORDER OF ITAT NAGPUR
This appeal has been preferred by the Assessee against the order dated 17/11/2022 impugned herein passed by the National Faceless Appeal Centre (NFAC)/Commissioner of Income Tax (Appeals), Delhi (in short, ‘Ld. Commissioner’) u/sec. 250 of the Income Tax Act, 1961 (in short, ‘Act’) for the A.Y. 2018-19.
2. In the instant case, the Assessee by filing its return of income for the assessment year under consideration on dated 26/03/2019 claimed the deduction of Rs. 7,46,340/- u/sec. 80P of the Act, which was disallowed by the CPC vide intimation/order dated 04/07/2019 u/sec. 143(1) of the Act and, therefore, the Assessee challenged the said disallowance/addition by filing the first appeal before the Ld. Commissioner, however, of no avail, as the Ld. Commissioner vide impugned order confirmed the aforesaid addition/disallowance by dismissing the appeal of the Assessee mainly on the reason that the return of income was not filed within the due date prescribed u/sec. 139(1) of the Act.
3. Assessee being aggrieved, challenged the impugned order by filing the instant appeal and claimed that prior to 01/04/2021, there was no enabling provision to make the adjustment u/sec. 143(1)(a)(v) of the Act and therefore, the authorities below would not have disallowed the deduction claimed by the Assessee. The Assessee in support of its claim, relied on various judgments.
4. On the contrary, learned Departmental Representative (in short, ‘DR’) refuted the claim of the Assessee by relying on the judgment passed by the Hon’ble Jurisdictional High Court in the case of EBR Enterprises vs. Union of India & another in Writ Petition No. 1415/2019 decided on 04/06/2019 wherein the applicability of the provision of section 80A(5) of the Act and claiming the deduction u/sec. 80-IB(10) of the Act in filing of return of income later on but not before filing of original return of income were under challenge. The Hon’ble High Court refused to entertain the writ petition of the Assessee by holding that our duty would be to enforce the provision contained in sub-section (5) of section 80A of the Act, as it is stands in the statute book.
5. Heard the parties and perused the material available on record. In the instant case, the due date for filing the original return of income was 30/05/2018, however, the Assessee filed the return of income on 26/03/2019 and, therefore, the return filed by the Assessee can be treated as belated return u/sec. 139(4) of the Act. The Hon’ble Kerala High Court in the case of Chirakkal Service Co-op. Bank Ltd. vs. CIT [2016] 68 com298 (Ker.) has held as under:
“That the return filed by the Assessee beyond the period stipulated u/sec. 139(1) or 139(4) or 142(1) or 148 can also be accepted and acted upon provided further proceedings in relation to such assessments are pending in the statutory hierarchy of adjudication in terms of the provisions of Income Tax Act. In all such situations, it cannot be treated that a return filed at any stage of such proceedings could not be treated as non-est in law and invalid for the purpose of deciding exception u/sec. 80P of the Act.”
6. Coming to the instant case, admittedly, the return filed by the Assessee on dated 26/03/2019 as against the due date for filing return i.e. 30/09/2018 which was further extended upto 31/10/2018 was available before the CPC while processing the return of income u/sec. 143(1) of the Act on dated 04/07/2019 and, therefore, in view of the judgment of the Hon’ble Kerala High Court referred to above, this Court is inclined to allow the appeal of the Assessee and consequently direct the AO to examine the claim of the Assessee on merit and to determine the tax liability accordingly.
7. In the result, appeal of the Assessee is allowed.
Order pronounced in the open court on 18.09.2025.
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