2022 (10) TMI 1147 - AT - Income Tax

Deduction u/s 80P(2)(d) - claim denied as assessee had not filed return of income within due date as specified u/s. 139(1) of the Act - HELD THAT - A bare perusal of the un-amended provision would show that there was no restriction for claiming deduction u/s 80P of the Act even if the return was filed beyond due date as specified u/s. 139(1) - The restriction was applicable only to the specified sections mentioned in section 80AC of the Act. The scope of section was enlarged by the Finance Act 2018 to include all deductions admissible under Chapter-VIA under the heading C-Deduction in respect of certain incomes The substituted section w.e.f. 01/04/2018 would be applicable to assessment year 2018-19 and in respect of deductions claimed u/s. 80P of the Act, as well. Since, in the impugned assessment year substituted provisions of section 80AC would be applicable, the CIT(A) has rightly rejected the appeal of assessee.

Summary

Issues:
Disallowance of deduction u/s 80P(2)(d) due to late filing of return of income.

Analysis:
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) disallowing the assessee's claim of deduction u/s 80P(2)(d) of the Income Tax Act, 1961, citing late filing of the return of income. The assessee, a Co-operative housing Society, earned interest income from deposits with Co-operative Banks and claimed deduction under section 80P(2)(d) of the Act. The CIT(A) dismissed the appeal on the grounds that the return was filed after the due date specified under section 139(1) of the Act for the relevant assessment year. The assessee argued that section 80AC, as applicable to the assessment year, did not restrict the deduction u/s 80P based on the due date of filing the return. The provisions of section 80AC were amended by the Finance Act, 2018, to include all deductions under Chapter-VIA, but the assessee contended that this amendment did not apply to section 80P deductions.

The Department, represented by Ms. Beena Santosh, supported the decision to disallow the deduction, emphasizing that the late filing of the return made the assessee ineligible for deduction u/s 80P as per section 80AC of the Act. The Tribunal examined both arguments and noted that the return was indeed filed after the due date. The assessee highlighted that the un-amended provision of section 80AC did not impose restrictions on claiming deduction u/s 80P for late filing of the return, and the amendment by the Finance Act, 2018, did not affect section 80P deductions. The Tribunal agreed that the amended section 80AC would apply to the assessment year in question, and therefore, the CIT(A) correctly dismissed the appeal.

In conclusion, the Tribunal upheld the impugned order, dismissing the appeal by the assessee. The decision was based on the application of the amended section 80AC to the assessment year and the ineligibility of the assessee for deduction u/s 80P due to the late filing of the return of income.