Claim of Deduction u/s 80P of Income Tax Act is Conditional on filing Return within Due Date: Kerala HC [Read Order]

The Kerala High Court has held that the pre-condition for claiming the deduction under Section 80Pof the Income Tax Act has been made more stringent by reducing the time available to an assessee formaking the claim.

The appellant/assessee,M/S. Nileshwar Range kalluChethuVyavasayaThozhilaliSahakaranaSanghamis a Labour Co-operative Society and for the assessment year 2009-10, the appellant did not file any return of income. On belief that the appellant had income chargeable to tax that had escaped assessment, the Department issued a notice under Section 148 of the Income Tax Act to the appellant, requiring the appellant to furnish a return of income.

The appellant failed to file the return of income in response to the notice under Section 148 of the Income Tax Act. A returnwas, however, filed which was much beyond the date for filing a return interms of Section 139(4) of the Income Tax Act.

Since the return of income was filed after the expiration of the time allowed under Section 139(4) and much after the due date mentioned in the notice under Section 148 of the Income Tax Act, the Assessing Officer treated itas invalid and proceeded to complete the assessment.

While completing the assessment, the claim of the appellant for deduction under Section 80P of the Income Tax Act wasdisallowed on the ground that the claim for deduction had not been made in a valid return filed by theappellant.

ABench of Justice A.K. Jayasankaran Nambiar and Justice Mohammed Nias C.Pobservedthat the claim for deduction under Section 80P of the Income Tax Act is conditional on filing a return within the due dateprescribed under Section 139(1) of the Income Tax Act.

“The requirement of making the claim for deduction in a return of income filed bythe assessee can be seen as a statutory pre-condition for claiming the benefit of deduction under theIncome Tax Act. It is trite that a provision for deduction or exemption under a taxing statute has to bestrictly construed against the assessee and in favour of the revenue. Thus viewed, a failure on the partof an assessee to comply with the precondition for obtaining the deduction cannot be condonedeither by the statutory authorities or by the courts” the Court opined.

To Read the full text of the Order CLICK HERE

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