Dholka Nagaric Bachat Sahakari Mandali Ltd Vs ITO (ITAT Ahmedabad)
Amendment to 80AC Prospective – ITAT Ahmedabad Grants Relief to Co-op Society
Assessee, a co-operative credit society registered under the Gujarat Co-operative Societies Act, is engaged in providing credit facilities to members & accepting deposits. For AY 2017-18, it did not file its return within the due date u/s 139(1). Later, during assessment proceedings, AO issued notices u/s 142(1) & show-cause notices, to which Assessee responded that since its income after deduction u/s 80P was below taxable limit, it was under a bona fide belief that filing return was not mandatory.
AO, however, applied the sixth proviso to s.139(1) & held that when gross total income before deduction u/s 80P exceeds the taxable threshold, return filing is mandatory. Consequently, AO denied deduction u/s 80P(2)(a)(i) of ₹7,21,430 & taxed the income accordingly. CIT(A) confirmed the disallowance, passing an ex parte order due to non-compliance by Assessee.
Arguments before ITAT
Assessee contended that the amendment to s.80AC, making timely filing of return a precondition for deductions under Chapter VIA, was introduced by Finance Act, 2018, effective from AY 2018-19 onwards. Hence, it could not be applied to AY 2017-18. It further argued that being a small-town co-operative society, its office bearers were under a genuine belief that exemption applied automatically.
