Chikkamudnoor Milk Producers Co-operative Society Ltd. Vs ITO (ITAT Bangalore)
Belated ROI = No 80P at CPC Stage: ITAT Bangalore Upholds 143(1)(a)(ii) Disallowance, Follows Madras HC
The Bangalore SMC Bench of the ITAT dismissed the appeals of two milk producers’ co-operative societies and upheld denial of deduction u/s 80P at the CPC processing stage u/s 143(1)(a)(ii) on the ground that the returns were filed beyond the due date u/s 139(1).
The Assessees had filed belated returns for AY 2019-20 claiming deduction u/s 80P. CPC disallowed the claim as an “incorrect claim” during processing u/s 143(1)(a)(ii), which was later reiterated in rectification orders u/s 154. The CIT(A) confirmed the disallowance by relying on Section 80AC, which mandates timely filing for availing Chapter VI-A deductions.
Before the Tribunal, the Assessees argued that:
- Disallowance of 80P for belated return is a debatable issue,
- Such adjustment could not be made under 143(1)(a)(ii), and
- Clause 143(1)(a)(v) (specific clause for belated return deductions) was inserted only w.e.f. 01.04.2021 and hence could not apply to AY 2019-20.
The Tribunal rejected these contentions and followed the binding judgment of the Madras High Court in Veerappampalayam Primary Agricultural Co-operative Credit Society Ltd. [2022] 138 taxmann.com 571, holding that:
- Section 80AC(ii) clearly bars deduction under Part-C of Chapter VI-A (including 80P) where the return is filed belatedly,
- The date of filing of return is apparent from the return itself, and
- CPC is empowered to make such a mechanical disallowance even under 143(1)(a)(ii).
The Tribunal expressly held that coordinate bench decisions allowing 80P in similar situations cannot override a High Court ruling, and judicial discipline requires following the High Court in the absence of any contrary decision from another High Court.
However, granting limited relief, the Tribunal advised the Assessees to seek condonation of delay u/s 119(2)(b) in terms of CBDT Circular No. 13/2023 & Circular No. 14/2024, which permit condonation for AYs 2018-19 to 2023-24. The AO was directed to allow 30 days’ time to file such applications.
Accordingly, both appeals were dismissed, with liberty to pursue the condonation route..
FULL TEXT OF THE ORDER OF ITAT BANGALORE
