S. 80P Deduction Denied for Delay: Madras HC Directs to Seek Condonation u/s 119(2)(b) alongside Filing Appeals [Read Order]

The Madurai Bench of the Madras High Court has granted one more opportunity to the cooperative society which was denied the Section 80P deduction due to late filing of the Income Tax Returns ( ITR ). It allowed to to seek condonation under Section 119(2) of the income tax act, 1961 alongwith filing appeals.

As per the Ramarajapuram Primary Agricultural Co-Operative Credit Society, the petitioner’s returns for Assessment Years 2019-20 and 2023-24 were processed under Section 143(1). However, the society was denied deduction under Section 80P due to late filing.

The petitioner explained that, under the Tamil Nadu Co-operative Societies framework, returns could only be filed after completion of statutory audit, which led to delays. Additionally, lack of technical expertise contributed to the failure to file returns within the prescribed timeline, thereby forfeiting the deduction.

The petitioner, challenging the orders, argued that the communications were cryptic and did not provide adequate reasoning, thus impairing its ability to effectively exercise appellate remedies.

However, the Revenue contended that an appeal under Section 246A(1)(a) is maintainable even against intimations under Section 143(1), and that the petitioner had failed to avail the appropriate statutory remedies, including seeking condonation of delay from the competent authority.

While the High Court understood the practical issues co-operative societies face, it said that tax deadlines under Section 80AC are mandatory and cannot be ignored.

With regards to the practical issues, the court commented that “Insofar as Co-operative Societies are concerned, this Court has, in earlier instances, issued directions to the Registrar of Co-operative Societies to ensure that such societies have adequate expert guidance in matters relating to taxation, both direct and indirect. Issuance of Circulars alone would not suffice.”

“Qualified personnel with requisite expertise must be engaged for each Co-operative Society, and a proper supervisory mechanism must be put in place to ensure periodic compliance, including timely filing of returns. The said directions are reiterated herein” added the bench.

Justice D. Bharatha Chakravarthy held that the appropriate course of action for the petitioner was to file detailed applications before the competent authority seeking condonation of delay, clearly explaining the reasons for delay, including audit timelines and procedural constraints.

The authority was directed to consider such applications on merits, taking into account the nature of the petitioner as a co-operative credit society.

Simultaneously, the Court also directed the petitioner to file statutory appeals against the impugned intimations along with applications for condonation of delay.

The Appellate Authority was instructed to keep the appeals pending until the decision on condonation under Section 119(2)(b) is rendered, and thereafter proceed in accordance with law. The petition was disposed accordingly.

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