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2024 (3) TMI 612 - AT - Income TaxDeduction u/s 80P - assessee had never claimed it before the AO during the assessment proceedings - HELD THAT - Before us, the Assessee had not filed a single document to demonstrate that the Assessee had made claim for Deduction u/s 80P of the Act. It means the assessee had never claimed any deduction u/s80P of the Act. It is a fact that the Assessee had not filed Return of Income. Hence, the AO has rightly not allowed the deduction u/s 80P of the Act as the assessee had never claimed it before the AO during the assessment proceedings as it appears from the assessment order. As per Section 80A(5) assessee has to make a claim for deduction u/s 80P of the Act in the Return of Income. In this case it is an admitted position that No Return of Income had been filed by the assessee. Also we have mentioned in earlier paragraph that no document has been filed by the assessee to prove that Assessee had made a claim for deduction u/s 80P of the Act before the AO. Hon ble Gujarat High Court in the case of Rachna Infrastructure Pvt. Ltd 2022 (3) TMI 256 - GUJARAT HIGH COURT held that assessee was not eligible for deduction u/s 80IA as per Section 80A (5) of the Act as Assessee had not claimed the deduction in the Return of Income. Decided against assessee.
Issues Involved:
1. Non-filing of Income Tax Return by the Assessee. 2. Denial of Deduction under Section 80P of the Income Tax Act. 3. Interpretation and Application of Section 80A(5) and 80AC of the Income Tax Act. Summary: Non-filing of Income Tax Return by the Assessee: The assessee did not file a return of income for A.Y. 2017-18, which led the Assessing Officer (AO) to issue a notice under section 142(1) of the Income Tax Act. Despite multiple notices, the assessee failed to file the return within the stipulated time. The AO assessed the total income based on the net profit shown in the Profit and Loss account. Denial of Deduction under Section 80P: The main grievance of the assessee was the denial of deduction under section 80P. The assessee argued that the provisions of Section 80A(5) are directory and not mandatory, relying on various ITAT decisions. However, both the AO and the Commissioner of Income Tax (Appeals) upheld that since the return was not filed, the deduction under section 80P could not be allowed. Interpretation and Application of Section 80A(5) and 80AC: The Tribunal noted that Section 80A(5) mandates that a claim for deduction must be made in the return of income. As the assessee did not file any return, the claim for deduction under section 80P was not admissible. The Tribunal cited several judgments from the Hon'ble Supreme Court, Bombay High Court, Kerala High Court, and Gujarat High Court, which emphasized that deductions under Chapter VIA must be claimed in a valid return of income. The Tribunal also noted that the decisions relied upon by the assessee were from ITAT and did not consider the higher court rulings. Conclusion: The Tribunal upheld the assessment order, denying the deduction under section 80P due to the non-filing of the return. All grounds raised by the assessee were dismissed, and the appeal was rejected. The Tribunal emphasized the necessity of filing a return to claim deductions under the Income Tax Act. Order: The appeal of the assessee is dismissed. Order pronounced in the open Court on 8th March, 2024.
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