CBDT issues Circular Condoning Delay for Claiming Deduction u/s 80P for A.Y. 2018-19 to A.Y. 2022-23 [Read Circular]

The Central Board of Direct Taxes (CBDT) vide circular number 13/2023 issued on 26th July 2023 condemned the delay for claiming the deduction under Section 80P for the Assessment years 2018-19 to 2022-2023.

Section 80P of the Income-tax Act, 1961 provides for deduction in respect of income of co-operative societies under Chapter VIA-Part-C (“Deductions in respect of certain incomes”) of the Income Tax Act Act.

CBDT has received applications from co-operative societies seeking deduction under Section 80P of the Income Tax Act for different assessment years ranging from AY 2018-19 to AY 2022-23. These applications pertain to condoning the delay in filing income tax returns and treating them as if they were filed within the due date specified in sub-section (1) of section 139 of the Act. The reason cited for the delay in submitting the income tax return is the delay in getting the accounts audited under the respective State Laws.

To address legitimate hardships in cases mentioned in paragraph 3, the Board, utilizing its authority under section 119 of the Income Tax Act, instructed that the Chief Commissioners of Income Tax (CCsIT) / Directors General of Income Tax (DGsIT) have the authorization to handle applications for condonation of delay that are currently pending before the Board. Upon transfer of these applications by the Board, the CCsIT/DGsIT can evaluate and decide on such applications based on their merits, adhering to the applicable laws.

The Board issued a directive stating that the CCsIT/DGsIT must now accept and process all pending and new applications for condonation of delay in filing income tax returns claiming deduction under Section 80P of the Income Tax Act.

These applications should pertain to the assessment years 2018-19 to 2022-23, whether submitted at the Board level or in the field formation. The authorities should assess these applications on their merits, following the relevant laws, especially when the concerned individual is obligated to get their accounts audited under the respective State Laws.

Regarding paragraph 5 mentioned earlier, the CCsIT/DGsIT, when reviewing applications for condonation of delay in filing income tax returns, must ensure that the applicant’s case qualifies for condonation according to the current provisions of the Act. In deciding such applications, the CCsIT/DGsIT should carefully assess the following factors:

1. the delay in furnishing the return of income within the due date under sub-section (l) of section 139 of the Act was caused due to circumstances beyond the control of the assessee with appropriate documentary evidence/s;
2. where delay in furnishing return of income was caused due to delay in getting the accounts audited by statutory auditors appointed under the respective State Law under which such person is required to get his accounts audited, the date of completion of audit vis-å-vis the due date of furnishing the return of income under sub-section (l) of section 139 of the Act; and
3. any other issue indicating towards tax avoidance or tax evasion specific to the case, which comes into the light in the course of verification and having bearing either in the relevant assessment year or establishing connection of relevant assessment year with other assessment year/s.

The cases falling under the abovementioned 3rd point, would require further necessary action as per the law.

The CCsIT/DGsIT should aim to resolve the application within three months from the end of the month in which it is received from the applicant or transferred by the Board. In case of rejecting the application under section 119(2)(b) of the Income Tax Act, the applicant must be given an opportunity to be heard before any such decision is made.

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