Andevanapally Primary Agricultural Co-op. Credit Society Limited Vs ITO (ITAT Chennai)
Delay in Filing Return Condoned U/s 119(2)(b); ITAT Holds Section 80AC Bar Cannot Survive, Restores U/s 80P Deduction Claim
The Chennai ITAT held that once the competent authority condones the delay in filing a return under section 119(2)(b), the disqualification contained in section 80AC for belated returns ceases to operate, and the claim for deduction under section 80P must be considered on merits.
The assessee, a Primary Agricultural Co-operative Credit Society, filed its return for AY 2018-19 on 08.11.2022 in response to a notice issued under section 148, declaring nil income after claiming deduction of ₹5.89 lakh under section 80P. The AO denied the deduction solely on the ground that the return was not filed within the due date prescribed under section 139(1), thereby attracting section 80AC.
Before the appellate authorities, the society explained that its statutory audit was required to be conducted by auditors appointed by the Government of Tamil Nadu and that the delay arose due to audit-related issues. It was further pointed out that an application seeking condonation of delay under section 119(2)(b) had been filed and was subsequently allowed by the Chief Commissioner of Income Tax, Coimbatore, on 31.12.2025.
The Tribunal noted that the AO and the CIT(A) had denied the deduction before the condonation order was passed. However, once the delay in filing the return stood condoned by the competent authority, the embargo under section 80AC no longer survived. Consequently, the assessee became entitled to have its claim under section 80P examined in accordance with law. The matter was therefore restored to the Jurisdictional Assessing Officer with a direction to consider and allow the deduction claimed under section 80P after due verification.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
