2018 (7) TMI 747 - AT - Income Tax

Deduction u/s 80P(2) - belated return filled - return filed beyond the period stipulated u/s 148 - Held that - 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 of the Hon ble High Court in Chirakkal Service Coop Bank Ltd vs CIT 2016 (4) TMI 826 - KERALA HIGH COURT we 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 Involved:
1. Deduction under section 80P of the Income Tax Act for assessment years 2012-2013 and 2013-2014.
2. Validity of belated returns for claiming deductions under section 80P.
3. Revenue's appeal concerning the assessment year 2014-2015 and the denial of deduction under section 80P.

Issue-wise Detailed Analysis:

1. Deduction under section 80P of the Income Tax Act for assessment years 2012-2013 and 2013-2014:
The assessee, a primary agricultural credit society, filed returns for the assessment years 2012-2013 and 2013-2014 disclosing losses and did not claim deductions under section 80P due to the absence of positive income. The assessments were completed with positive income, but the Assessing Officer did not consider the deduction under section 80P as it was not claimed in the original returns. The CIT(A) upheld this view, referencing the judgment in Chirakkal Service Co-op Bank Ltd vs CIT, which stated that returns filed during appellate proceedings should not be dismissed as invalid for deduction claims under section 80P. The Tribunal directed the Assessing Officer to consider the deduction claims under section 80P, emphasizing that the revised returns, although filed late, should be acted upon if assessment proceedings are ongoing.

2. Validity of belated returns for claiming deductions under section 80P:
The Tribunal referred to the Hon’ble High Court's judgment in Chirakkal Service Co-op Bank Ltd vs CIT, which clarified that even if returns are filed beyond the stipulated period under sections 139(1), 139(4), 142(1), or 148, they should be considered if further proceedings are pending. The judgment emphasized that the finality of assessment is not achieved until all appellate remedies are exhausted, and thus, claims for exemptions or deductions can be entertained at any stage of the appellate process. This ruling was pivotal in deciding that the assessee's belated returns claiming deductions under section 80P must be considered valid.

3. Revenue's appeal concerning the assessment year 2014-2015 and the denial of deduction under section 80P:
For the assessment year 2014-2015, the assessee filed a return claiming carried forward losses, which was later revised to claim deductions under section 80P. The Assessing Officer denied this claim as the revised return was filed late. The CIT(A), however, allowed the deduction, referencing the Chirakkal Service Co-op Bank Ltd vs CIT judgment, which mandated that belated returns should be considered if filed during ongoing assessment proceedings. The Tribunal upheld the CIT(A)'s decision, reiterating that the Assessing Officer must grant the deduction under section 80P, as the appellate process is a continuation of the assessment proceedings.

Conclusion:
The appeals filed by the assessee for the assessment years 2012-2013 and 2013-2014 were allowed for statistical purposes, directing the Assessing Officer to consider the deduction claims under section 80P. The Revenue's appeal for the assessment year 2014-2015 was dismissed, affirming the CIT(A)'s directive to grant the deduction under section 80P. The stay applications filed by the assessee were dismissed as infructuous. The judgment emphasized the validity of belated returns for claiming deductions if assessment proceedings are ongoing, adhering to the principles laid down in the Chirakkal Service Co-op Bank Ltd vs CIT case.