2022 (11) TMI 1174 - AT - Income Tax

Deduction u/s. 80P(2)(a)(i) and 80P(2)(d) - Failure to file its returns for the impugned assessment years before the prescribed due date u/s.139(1) of the Act as on 31.08.2018 and 31.08.2019 assessment year wise, respectively - HELD THAT - No merit in Revenue s arguments seeking to invoke section 139(1) Explanation-2 (c) of the Act. A perusal thereof makes it clear that it is in the nature of residuary clause dealing with any other assessee whereas this taxpayer is found to be covered u/s. 139(1) Explanation-2(a)(ii) thereof as applicable in case of a person other than company whose accounts are required to be audited under this Act or under any other law for the time being in force since it is liable to be audited under the state cooperative law. Faced with the situation, reverse both the lower authorities action applying section 80AC of the Act in assessee s cases in principle and restore this sole substantive grievance back to the Assessing Officer for his afresh adjudication as per law on merits.

Summary

Issues:
Appeals against disallowed deductions under sections 80P(2)(a)(i) and 80P(2)(d) due to late filing of returns under section 139(1).

Analysis:
The appeals in question pertain to the disallowance of deductions under sections 80P(2)(a)(i) and 80P(2)(d) for the assessment years 2018-19 and 2019-20 due to the late filing of returns by the assessee. The National Faceless Appeal Centre's orders dated 03.03.2021 were challenged before the Appellate Tribunal ITAT PANAJI. Both parties were heard, and it was noted that the core issue revolved around the assessee's failure to file returns before the prescribed due dates under section 139(1) of the Income Tax Act, 1961. The returns were filed after the due dates, i.e., on 27.09.2018 and 24.09.2019, for the respective assessment years.

The Revenue contended that the assessee's claims were rightly disallowed as per the CIT(A)'s detailed discussion, emphasizing that the returns were filed after the extended due dates. However, the Judicial Member analyzed the provisions of section 139(1) Explanation-2 and determined that the assessee fell under Explanation-2(a)(ii) as a person liable to be audited under the state cooperative law. Consequently, the lower authorities' actions were reversed, invoking section 80AC of the Act, and the matter was remanded back to the Assessing Officer for fresh adjudication on merits.

It was observed that no other grounds or arguments were raised during the hearing. Ultimately, the twin appeals by the assessee were allowed for statistical purposes, and a copy of the order was directed to be placed in the respective files. The judgment was pronounced on 24.11.2022 by the Judicial Member, Shri Satbeer Singh Godara, at the Appellate Tribunal ITAT PANAJI.