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2023 (2) TMI 301 - AT - Income TaxDeduction u/s 80P(2) - assessee did not file its return of income within due date as prescribed under section 139(1) - HELD THAT - CIT (A) has examined the issue in details and observed that the assessee did not comply the mandatory requirement of section 80AC which is mandatory requirement for claiming deduction under chapter VI A of the I. T. Act. 1961 as decided in the case of Suolificio Linea Italia (India) (P.) Ltd 2018 (5) TMI 638 - CALCUTTA HIGH COURT DR also relied on the judgment of 2023 (1) TMI 606 - ITAT BANGALORE in which it has been held that the adjustment u/s 143(1) can be made and for getting deduction under Chapter VIA the assessee should have filed return of income within the due date as specified in sec.139(1) of the IT Act. In the above decision the coordinate bench also relied on the judgment of Checkmate Service Pvt. Ltd 2022 (10) TMI 617 - SUPREME COURT Further, the coordinate bench of the Tribunal has also decided the similar issue in favour of the Revenue in the case of M/s. Rushi Sanskruti Vividoddeshagal Souhard SahakariNiyamit 2023 (2) TMI 158 - ITAT BANGALORE the ratio decided in all these judgments are squarely applicable in the present facts of the case. Accordingly the assessee is not eligible to claim of deduction u/s 80P of the Act. Accordingly, the grounds raised by the assessee are dismissed.
Issues Involved:
1. Disallowance of deduction under section 80P(2) of the Income Tax Act. 2. Non-condonation of delay in filing appeal by the CIT(A). 3. Filing of return of income within the due date as per section 139(1) of the Act. 4. Ex-parte decision by CIT(A) due to non-response to hearing notices. 5. Impact of the faceless appeal scheme on the appellant's awareness and response. 6. The validity of the response filed by the assessee to the intimation under section 143(1) of the Act. 7. Eligibility of the appellant as a Co-operative Society under the Karnataka State Co-operative Societies Act, 1959. 8. Application of the extended due date for filing returns due to audit requirements. Detailed Analysis: 1. Disallowance of Deduction under Section 80P(2): The assessee claimed deductions under section 80P(2) for both assessment years 2018-19 and 2019-20. The CPC disallowed these claims on the grounds that the returns were not filed within the due date prescribed under section 139(1). The Tribunal noted that the CIT(A) had not decided on the merits of the case but dismissed the appeal due to the delay in filing. It was observed that the assessee's books were not audited by a Chartered Accountant, and thus, the extended due date did not apply. The Tribunal referred to the judgments of the Hon'ble High Court of Calcutta and the Supreme Court, which emphasized the mandatory nature of filing returns within the due date for claiming deductions under Chapter VI-A. 2. Non-condonation of Delay in Filing Appeal by the CIT(A): The CIT(A) did not condone the delay of 410 days for the assessment year 2018-19, citing negligence and deliberate inaction by the assessee. The Tribunal, however, condoned the delay, considering the Supreme Court's decision in the case of Collector, Land Acquisition Vs. MST. Katiji and Others, which provided relief due to the Covid-19 pandemic. The Tribunal found that there was a reasonable cause for the delay and sent the matter back to the CIT(A) for fresh consideration. 3. Filing of Return of Income within the Due Date: The Tribunal observed that the due date for filing the return of income was extended to 31.10.2018 for the assessment year 2018-19 and 31.10.2019 for the assessment year 2019-20 for those requiring audit. However, the assessee did not file the audit report along with the return, and the return itself declared that it was not liable for audit under any Act. Therefore, the extended due date benefit did not apply, and the returns were considered late. 4. Ex-parte Decision by CIT(A) Due to Non-response to Hearing Notices: The CIT(A) decided the appeal ex-parte, stating that the appellant did not respond to hearing notices. The assessee argued that it sought adjournments and was unaware that notices would be sent only to the registered email ID due to the new faceless appeal scheme. The Tribunal acknowledged these issues and emphasized the need for the CIT(A) to decide the appeal on merits. 5. Impact of the Faceless Appeal Scheme on the Appellant's Awareness and Response: The appellant claimed unawareness of the procedure under the new faceless appeal scheme, which led to non-response to notices. The Tribunal considered this a reasonable cause for the delay and emphasized the need for the CIT(A) to consider the appeal on merits. 6. Validity of the Response Filed by the Assessee to the Intimation under Section 143(1): The assessee responded to the intimation under section 143(1), but the CIT(A) did not consider this response. The Tribunal noted that the response was filed, and the CPC should have considered it before making adjustments. The Tribunal directed the CIT(A) to consider this aspect on remand. 7. Eligibility of the Appellant as a Co-operative Society under the Karnataka State Co-operative Societies Act, 1959: The appellant argued that it was a Co-operative Society registered under the Karnataka State Co-operative Societies Act, 1959, and thus eligible for audit under section 63 of the said Act. The Tribunal noted that the CIT(A) did not consider this argument and directed a fresh examination of this claim. 8. Application of the Extended Due Date for Filing Returns Due to Audit Requirements: The Tribunal observed that the extended due date for filing returns applied to entities requiring audit. However, since the assessee's return declared it was not liable for audit, the extended due date did not apply. The Tribunal directed the CIT(A) to re-examine this issue on remand. Conclusion: The Tribunal allowed the appeal for the assessment year 2018-19 for statistical purposes, directing the CIT(A) to re-examine the issues on merits. For the assessment year 2019-20, the Tribunal dismissed the appeal, upholding the disallowance of the deduction under section 80P(2) due to the late filing of the return. The Tribunal emphasized the need for compliance with statutory deadlines and proper consideration of responses and procedural changes due to the faceless appeal scheme.
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