Benefits of 80P Deduction denied due to Non-filing of Income Tax Returns on Prescribed Time: Kerala HC directs to File ITR [Read Order]

In a recent case, the Kerala High Court has held that benefits of Income Tax,1961 deduction under Section 80 (P) were denied due to non-filing of Income Tax Return ( ITR ) on prescribed time.

The Muvattupuzha Agricultural Co-Operative Bank Ltd, the petitioner filed the writ petition challenging the assessment order under Section 148A(d) of the Income Tax Act and notice Section 148, directing the petitioner to file Income Tax Returns for the AY 2020 -2021.

According to the petitioner, the petitioner is eligible for deduction under Section 80P(2)(a)(i) and 80P(2)(d) of the Income Tax Act and if the deduction under Section 80 P of the Income Tax Act is denied, the petitioner will face huge financial liability.

One of the deductions available with respect to the income or gains of co-operative societies, is provided under Section 80P of the Income Tax Act. A deduction is allowed to the extent of the actual profit earned by the assessee from the specified activities of the co-operative society.

Adv. Jose Joseph,  the Standing Counsel for the Income Tax Department submitted that the period to file Returns will expire only on 29.06.2024, and that, if the petitioner files a return of their income before the said period, the assessing authority will consider the same under law.

Section 80P is made not applicable to any co-operative bank (including Regional Rural Banks) other than a primary agricultural credit society (as defined in the Banking Regulation Act) or a primary co-operative agricultural and rural development bank (a society having its area of operation confined to a taluk and the principal object of which is to provide long-term credit for agricultural and rural development activities).

A single bench of Justice Murali Purushothaman disposed of the Writ Petition with direction to the petitioner to file the return of their income before 29.06.2024.If the petitioner files their return of income within the said period, the assessing authority shall consider the same under the law.

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