Case Law Details
Madhu Souharda Pathina Vs ITO (ITAT Bangalore)
Introduction: In a significant ruling by the Income Tax Appellate Tribunal (ITAT) Bangalore, the case of Madhu Souharda Pathina Vs ITO has brought to light the crucial requirement of filing a return of income for claiming deductions under Section 80P of the Income Tax Act. This decision underscores the adherence to procedural norms for availing tax benefits, setting a precedent for cooperative societies and Associations of Persons (AOPs).
Detailed Analysis: The crux of the matter revolved around the appellant, Madhu Souharda Pathina, a cooperative society, which failed to file its return of income within the timeframe prescribed under sections 139(1) & 139(4) of the Income Tax Act for the Assessment Year (AY) 2017-18. Despite earning income above the taxable limit, the appellant did not furnish the return in response to notices under Section 142(1), leading to the denial of deduction under Section 80P by the Assessing Officer (AO) as per Sections 80A(5) and 80AC.
The AO’s action was based on the premise that for claiming deduction under Section 80P, which pertains to income of cooperative societies, the filing of a valid return of income is indispensable. The appeal to the CIT(Appeals) resulted in a dismissal, reinforcing the necessity of a valid return for the deduction claim under Section 80P.
The ITAT Bangalore, after deliberation, upheld the decisions of the lower authorities, aligning with the judgment of the Hon’ble Kerala High Court in the case of Nageshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana Sangham v. CIT. The tribunal emphasized that the statutory scheme of the Income Tax Act mandates the filing of a return of income as a precondition for availing deductions under Chapter VIA, including Section 80P.
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