2018 (7) TMI 656 - AT - Income Tax

Assessment u/s 147 r. w. s. 144 denying the claim of deduction u/s 80P(2) - delayed filing or returns - Held that - It is now submitted that the assessee has filed the returns of income for assessment years 2012-2013 and 2013-2014 when the appeals were pending before the Tribunal. The Hon ble High Court in the case of Chirakkal Service Co-op Bank Ltd vs CIT (2016 (4) TMI 826 - KERALA HIGH COURT) had held that appeals are continuation of assessment proceedings and even if the return of income was filed before the appellate authority claiming deduction u/s 80P(2), the same has to be acted upon. Return filed beyond the period stipulated u/s 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 the I. T. Act. In view of the above conclusions - direct the Assessing Officer to consider the claim of deduction u/s 80P of the I. T. Act as expeditiously as possible. Therefore, the appeals filed by the assessee are allowed for statistical purposes

Summary

Issues:
- Assessment completed without filed returns of income
- Denial of deduction u/s 80P(2) of the I. T. Act
- Filing returns during pendency of appeals
- Interpretation of relevant legal provisions

Analysis:
1. The appellant, a co-operative society, did not file returns of income for the assessment years 2012-2013 and 2013-2014 as per section 139 of the I.T. Act. Consequently, the Assessing Officer completed assessments u/s 144 r.w. s. 147 estimating total income for both years.

2. The appellant appealed to the CIT(A) questioning the validity of the notice u/s 148 and the denial of deduction u/s 80P(2) of the I.T. Act. The CIT(A) upheld the assessments and denied the deduction based on the non-filing of returns.

3. Subsequently, the appellant filed returns during the pendency of appeals before the Tribunal, claiming deduction u/s 80P(2) based on a judgment. The Tribunal considered the legislative intent and legal precedents, including the judgment cited, which emphasized that belatedly filed returns can be accepted for consideration of deductions.

4. The Tribunal referred to the High Court's ruling that returns filed beyond the stipulated period can be valid for deduction consideration if related proceedings are pending. The Tribunal directed the Assessing Officer to expedite the consideration of the deduction claim u/s 80P of the I.T. Act, allowing the appeals for statistical purposes.

5. Consequently, the appeals were allowed, and the stay applications were dismissed as they became irrelevant. The Tribunal's decision was based on the legal interpretation that returns filed during pending appeals can be considered for deductions, aligning with the legislative intent and judicial precedents.

6. The Tribunal's detailed analysis and reliance on legal provisions and judgments ensured a fair consideration of the appellant's claim for deduction u/s 80P(2) of the I.T. Act, emphasizing the importance of procedural fairness and adherence to legal principles in tax assessments and appeals.