Belated ITR Not a Bar: ITAT allows 80P Deduction Claim, Remands Matter to AO for Fresh Adjudication [Read Order]

The Nagpur bench of Income Tax Appellate Tribunal (ITAT) held that the deduction under Section 80P cannot be denied solely for belated filing and directed the AO to examine the claim and determine the tax liability accordingly.

The assessee Somalwar Academy Education Societies Employees Co-op. Credit Society Mar filed its return of income for the assessment year under consideration on 26/03/2019 and claimed a deduction of Rs. 7,46,340/- under Section 80P of the Act. The CPC disallowed this. The Assessee

challenged the said disallowance by filing an appeal before the Commissioner.

The Commissioner confirmed the disallowance by dismissing the appeal of the assessee mainly on the reason that the return of income was not filed within the prescribed due date.

The assessee, being aggrieved, challenged the order by filing an appeal and claimed that prior to 01/04/2021, there was no enabling provision to make the adjustment, and the authorities would not have disallowed the deduction claimed by the Assessee.

On the contrary, the revenue refused the claim of the Assessee by relying on the judgment passed by the Hon'ble Jurisdictional High Court in the case of EBR Enterprises vs. Union of India & another, wherein the applicability of the provision of section 80A(5) of the Act and claiming the deduction u/sec. 80-IB(10) of the Act, in filing of return of income later on but not before filing of original return of income, were under challenge.

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The Hon'ble High Court refused to entertain the writ petition of the Assessee by holding that our duty would be to enforce the provision contained in sub-section (5) of section 80A of the Act, as it stands in the statute book.

The Tribunal observed that the due date for filing the original return of income was 30/05/2018; however, the Assessee filed the return of income on 26/03/2019, and, therefore, the return filed by the Assessee can be treated as a belated return u/sec. 139(4) of the Act.

The Tribunal quoted the Hon'ble Kerala High Court in the case of Chirakkal Service Co-op. Bank Ltd. vs. CIT [2016] has held as under:

“That the return filed by the Assessee beyond the period stipulated u/sec. 139(1) or 139(4) or 142(1) or 148 can also be accepted and acted upon provided further proceedings in relation to such assessments are pending in the statutory hierarchy of adjudication in terms of the provisions of Income Tax Act. In all such situations, it cannot be treated that a return filed at any stage of such proceedings could not be treated as non-est in law and invalid for the purpose of deciding exemption u/sec. 80P of the Act.”

The single bench of Narender Kumar Choudhry (Judicial Member), in view of the judgment of the Hon'ble Kerala High Court, directed the AO to examine the claim of the assessee and to determine the tax liability accordingly.

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