2023 (7) TMI 1435 - AT - Income Tax

Deduction u/s. 80P(2)(c) and 80P (2)(d) - interest on fixed deposit kept with Co- Operative Banks and savings bank interest from Co-Operative Bank - ITR filed by the Assessee beyond the due date as prescribed u/s 139(1), therefore claim made u/s. 80P was not found permissible. Department claimed that the last date for filing of ITR in this case was 31st Aug, 2018, whereas the Assessee has claimed the same was 31st Oct, 2018 u/s. 139(1) of the Act - HELD THAT - As the provisions of section 139 of the Act and observe that in the AY 2018-19, in case of person (other than a company) whose accounts were required to the audited under this Act or under any other law for the time being in force, as per Explanation-2 (a)(ii) of section 139(1) the due date for filling of ITR was 30th September, however the said due date of 30th September, has subsequently been substituted with 31st October vide finance Act 2020 with effect from 1st April, 2020. Assessee being a Co-Operative Housing Society governed by Maharashtra Co-Operative Society Act 1960 required to be audited under Maharashtra State Co-Operative Act and therefore was liable to file its return of income upto 30-09- 2018 and hence the Assessee filed on 18-09-2018, which goes to show that the Assessee has filed its return of income before the due date as prescribed u/s. 139 of the Act and therefore the Assessee is entitled for the deduction as claimed for. We are inclined to accept the claim of the Assessee and consequently delete the addition made by the AO and affirmed by the Commissioner. Appeal filed by the Assessee stands allowed.

Summary

Issues:
1. Disallowance of deductions under sections 80P(2)(c) and 80P(2)(d) of the Income Tax Act, 1961 due to late filing of income tax return.
2. Controversy over the due date for filing the income tax return by the Assessee.

Analysis:
1. The Assessee declared income and claimed deductions under sections 80P(2)(c) and 80P(2)(d) of the Income Tax Act, 1961. The Assessing Officer (AO) disallowed the deductions as the income tax return was filed after the due date, citing non-compliance with section 139(1) of the Act. The AO added the disallowed amount to the Assessee's income for penalty proceedings under section 270A of the Act.

2. The Assessee challenged the addition before the Ld. Commissioner, who upheld the AO's decision. The Ld. Commissioner emphasized the importance of adhering to the due dates prescribed in the Income Tax Act and Rules, regardless of audits conducted under other laws. The Ld. Commissioner affirmed that the Assessee failed to comply with the Act's provisions, rendering them ineligible for deductions under section 80P.

3. The Appellate Tribunal analyzed the due date controversy, noting that the Assessee, a Co-Operative Housing Society audited under the Maharashtra State Co-Operative Act, was required to file the return by September 30. The due date was extended to October 31, effective from April 1, 2020. As the Assessee filed the return on September 18, 2018, within the prescribed due date, the Tribunal accepted the Assessee's claim for deductions under sections 80P(2)(c) and 80P(2)(d). Consequently, the Tribunal allowed the appeal, deleting the addition made by the AO and upheld by the Ld. Commissioner.

4. The Tribunal's decision was based on the Assessee's timely filing of the return as per the extended due date, in alignment with the provisions of section 139 of the Act. The Tribunal emphasized the significance of meeting statutory deadlines for filing returns and audit reports under the Income Tax Act, ultimately ruling in favor of the Assessee's entitlement to the claimed deductions.

5. In conclusion, the Appellate Tribunal allowed the Assessee's appeal, overturning the disallowance of deductions under sections 80P(2)(c) and 80P(2)(d) due to the timely filing of the income tax return within the prescribed due date, as per the provisions of the Income Tax Act, 1961.

Orders pronounced in the open court on 27.07.2023.