The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the deduction under section 80P cannot be claimed in Income Tax Return (ITR) filing beyond the due date specified under section 139(1) of the Income Tax Act.
Dared Seva Sahkari Mandali Ltd. (Assessee) deposited cash of Rs. 5,31,61,730 and a time deposit of Rs. 21,81,997. The assessing officer found that the assessee had not filed the income tax return. The AO issued a notice under section 148 of the Income Tax Act, 1961. After receiving the notice, the assessee filed his income tax return, declaring nil income.
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The assessee was engaged in credit cooperative society activities, including accepting deposits from members, taking loans from cooperative banks, and selling agricultural inputs like fertilizers, pesticides, and seeds. The AO completed the assessment disallowing deduction under section 80P of the Income Tax Act.
The assessee appealed before the Commissioner of Income Tax (Appeals) against the order of the assessing officer. The CIT(A) dismissed the assessee’s claim of 80P deduction and held that as amended by the Finance Act of 2018, section 80AC and section 80A(5) of the Income Tax Act require returns to be filed within the due date to claim deductions under Section 80P. Since the assessee filed an income tax return beyond the specific date mentioned under section 139(1), the deduction was disallowed.
Aggrieved by the CIT(A) order, the assessee appealed before the ITAT, Ahmedabad where the assessee’s counsel argued that the deduction under Section 80P should be allowed despite the late filing of the return. They relied on the Kerala High Court ruling in Chirakkal Service Co-operative Bank Ltd. vs. CIT, which allowed a similar deduction for belated returns.
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The revenue counsel relied on the decision of ITAT, Rajkot Bench in the case of Lunidhar Seva Sahkari Mandali Ltd. v. The Assessing Officer which disallowed deduction under section 80P due to income tax return filed beyond the date specified under section 134(1) of the Act.
The two-member bench comprising T.R. Senthil Kumar (Judicial Member) and Ramit Kochar (Accountant Member) observed that there was no specific mention in the body of the assessment order about the disallowance which could be an irregularity on the part of the assessing officer. However, the computation of income and demand notice attached to the order confirmed the denial of deductions.
The tribunal highlighted that the amendment of section 80AC which mandates deduction under section 80P could be claimed only if the income tax return was filed within the due date under section 139(1) from 1st April 2018. The tribunal referenced similar rulings, such as the Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana Sangham case, supporting the revenue’s stance on the amended Section 80AC. Thus, the tribunal dismissed the appeal of the assessee.
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