Case Law Details
Shantadurga Multi Purpose Souharda Sahakari Niyamit Vs National e-Assessment Centre (ITAT Panaji)
ITAT Panaji: Deduction u/s 80P Allowed – Sec.80AC Not Applicable to Co-op Societies Prior to AY 2018-19
Panaji Tribunal has held that provisions of section 80AC, which mandate timely filing of return u/s 139(1) as a precondition for claiming deduction, are applicable to cooperative societies only from AY 2018-19 onwards. Therefore, deduction u/s 80P cannot be denied to a society for earlier years merely on the ground of belated filing.
Assessee, a cooperative society providing credit facilities to members, had not filed return of income u/s 139(1). Based on data analytics, AO noticed substantial cash deposits & reopened assessment u/s 147. In response, Assessee filed return declaring nil income after claiming deduction of ₹1,96,851 u/s 80P. AO, however, denied deduction applying section 80AC & assessed the income. CIT(A) confirmed the denial.
On further appeal, Tribunal noted that section 80AC was extended to cover deductions u/s 80P only with effect from AY 2018-19. For AYs 2015-16 & 2016-17, the assessee could validly claim deduction even if the return was filed after due date but in response to notice u/s 142(1) or 148. Reliance was placed on coordinate bench decisions in Prathamika Krishi Patina Sahakara Sangha Ltd. (Bangalore ITAT, 2022) & Omkar Urban Cooperative Credit Society Ltd. Vs. ITO (Panaji ITAT, 2022), where similar claims were allowed.
Accordingly, Tribunal set aside the orders of the CIT(A) & directed AO to allow deduction u/s 80P to the assessee for both assessment years.
For assessment years prior to AY 2018-19, cooperative societies cannot be denied deduction u/s 80P merely for filing returns beyond the due date u/s 139(1). The restrictive condition under section 80AC applies prospectively from AY 2018-19.
FULL TEXT OF THE ORDER OF ITAT PANAJI
These two appeals are filed by the assesse against the separate orders of National Faceless Appeal Centre (NFAC) Delhi / CIT(A) passed u/sec 250 of the Act. The assesse has raised the grounds of appeal challenging the order of the NFAC/ CIT(A) sustaining the denial of claim of deduction under section 80P of the Act applying the provisions of section 80AC of the Act.
2. Since issues involved in these appeals are common and identical, hence they are clubbed, heard and a consolidated order is passed. For the sake of convenience, ITA No.203/PAN/2025, A.Y 2015-16 is taken as a lead case and facts narrated.
3. The brief facts of the case are that, the assessee is a cooperative society engaged in providing the credit facilities to members. The Assessing Officer (AO) based on the information and data analytics/ cash transactions data found that the assesse has made cash deposits in the three bank accounts and the assesse has not filed the return of income. The A.O has reason to believe that the income has escaped assessment and issued notice u/sec148 and U/sec 142(1) of the Act . Further notice u/sec 143(2) of the Act was also issued. In compliance, the assesse has filed the return of income disclosing Rs.Nil total income after claiming deduction u/sec80P of the Act of Rs. 1,96,851/-.Whereas the A.O found that the assessee has made the cash deposits in the F.Y.2014-15 and explanations were called to substantiate the cash deposits and the assesse has furnished the clarifications and details on the cash deposits on 26.02.2024 and were duly verified by the A.O. Further the A.O found that for the A.Y.2015-16 the assessee has not filed the return of income u/sec139(1) of the Act and the conditions stipulated under section 80AC of the Act are not complied by the assessee and the A.O has denied the claim of deduction u/sec80P of the Act and assessed the total income of Rs.1,96,851/- and passed the order u/sec147r.w.s 144B of the Act dated 15.03.2024.
4. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and has issued notices of hearing and the assessee has filed the details and submissions. But the CIT(A) has confirmed the action of the A.O and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon’ble Tribunal.
5. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer overlooking the information of the assessment proceedings. The provisions of section 80AC of the Act are applicable to the cooperative societies from A.Y.2018-19 to claim deduction u/sec80P of the Act provided the return of income is filed within the due date u/sec 139(1) of the Act and whereas the impugned assessment year is A.Y.2015-16. The Ld.AR supported the submissions with the factual paper book and judicial decisions. Per Contra, the Ld.DR supported the order of the CIT(A) and submissions.
6. Heard the rival submissions and perused the material on record. The Ld.AR submitted that the CIT(A) has erred in sustaining the disallowance of deduction under section 80P of the Act overlooking the submissions and factual aspects.. The sole contentions of the Ld.AR that the revenue authorities have wrongly applied the provisions of section 80 AC of the Act. The A.O has issued notice in the assessment proceedings and in compliance to notice, the assessee has filed the return of income disclosing a total income Rs.Nil income after claiming deduction u/sec80P of the Act for A.Y.2015-16. Whereas the provisions of section 80A(5) of the Act are not applicable as the deduction under section 80P of the Act was not included in the proviso till A.Y.2017-18 and therefore deduction u/sec80P of the Act can be claimed even after the due date u/sec139(1) of the Act. The Ld.AR relied on the decision of the Honble Tribunal Bangalore Bench – Prathamika krishi patina sahakara sangha ltd(2022)142 taxmann.com405. Similarly the Ld.AR relied on the decision of Honble Tribunal Panaji bench-ITA. .No.84/PAN/2022 -The omkar urban cooperative credit society Ltd Vs ITO Belagavi.A.Y.2017-18 were the Honble Tribunal in Para 5.4 of the order had dealt on the similar issue were the assessee has filed the return of income disclosing total income Rs.Nil after claiming the deduction u/sec80P of the Act in pursuance to notice issued u/sec142(1) of the Act in the assessment proceedings and the Honble Tribunal concluded that the provisions of section 80AC of the Act shall not be applicable and the assessee is entitled deduction u/sec80P of the Act. Hence considering, the facts, circumstances and follow the judicial precedence and set aside the order of the CIT (A) and direct the Assessing officer to allow the claim of deduction u/sec80P of the Act. And the grounds of appeal of the assessee are allowed in favour of the asssessee.
ITA No.204/PAN/2025.A.Y.2016-17.
7. As the facts and circumstances in this appeal is identical to ITA No 203/PAN/2025 for the A.Y 2015-16 (except variance in figures) and the decision rendered in above paragraphs 5&6 would apply mutatis mutandis for this appeal also. Accordingly, the grounds of appeal of the assessee are allowed.
8. In the result, the two appeals filed by the assessee are allowed.
Order pronounced in the open court on 15.09.2025.
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