Lichamanpura Gram Sewa Sahkari Samiti Ltd Vs PCIT (ITAT Jaipur)
Belated Return Closes the Door on Section 80P Deduction: Claim Made in Response to Notice u/s 148 Must Still Pass the Mandatory Test of Section 80A
Reassessment Triggered by Cash Deposits of ₹2.58 Crore
The assessee was a credit co-operative society engaged in providing credit facilities to its members. It had not originally filed its return of income for AY 2019-20.
Based on information received through the Insight portal identifying the assessee as a high-risk non-filer, the Department noticed cash deposits aggregating to ₹2,58,57,401 in its bank account. Consequently, proceedings were initiated by issuing notice u/s 148.
In response, the assessee filed its return and explained that the cash deposits arose in the ordinary course of its credit co-operative activities. It furnished its profit & loss account, audit report, cash book, bank statements and other supporting records. The assessee claimed deduction of its income u/s 80P and returned nil taxable income.
The AO accepted the explanation concerning the cash deposits and also allowed the deduction claimed u/s 80P. No addition was consequently made.
The PCIT, however, noticed that the return had not been filed within the time prescribed u/s 139(1). It had been filed only on 13.04.2023 in response to the notice u/s 148. Since Section 80AC mandates timely filing of the return as a condition for claiming deduction under the relevant provisions of Chapter VI-A, the PCIT considered the allowance of deduction u/s 80P to be contrary to law.
