2024 (7) TMI 1616 - AT - Income Tax

Deduction u/s.80P(2)(d) - Return of Income is not filed in time - HELD THAT - As concurring with the view taken by the Tribunal in the case Vishva Villa Co-op Housing Society 2024 (6) TMI 1395 - ITAT MUMBAI we hold that for the Assessment Year 2018-19 the deduction claimed by the Assessee under Section 80P(2)(d) of the Act could not have been disallowed on the ground that the return was filed after due date specified in Section 139(1) of the Act. We note that as per Section 80P(2)(d) of the Act for the purpose of claiming deduction under the aforesaid provision interest must be received from a co-operative society . A co-operative society is defined in Section 2(19) of the Act as being a co-operative society registered either under the Co-operative Societies Act 1912 or under any other law for the time being in force in any State for the registration of co-operative societies. We also find merit in the contention of the Appellant that return was in fact filed within time specified u/s 139(1). We observe that for the Assessment Year 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) of the Act the due date for filling of income tax return was 30th September of the relevant assessment year subsequently substituted with 31st October vide finance Act 2020 with effect from 01/04/2020 . The Appellant being a Co-Operative Society governed by Maharashtra Co-Operative Society Act 1960 was required to be audited under Maharashtra State Co-Operative Act and therefore was required to file its return of income upto 30/09/2018. As per Revenue the Appellant had filed return on 26/09/2018. Thus the return was filed before the due date as prescribed under Section 139 of the Act and therefore the Appellant is entitled for deduction under Section 80P(2)(d) of the Act as claimed. Order passed by the CIT(A) cannot be sustained. AO is directed to allow deduction u/s 80P(2)(d) of the Act - Decided in favour of assessee.

Summary

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

• Whether the deduction under Section 80P(2)(d) of the Income Tax Act, 1961, was correctly disallowed by the CIT(A) on the grounds that the interest was received from a cooperative bank and not a cooperative society.
• Whether the return of income was filed within the due date as specified under Section 139(1) of the Act, thereby affecting the eligibility for deduction under Section 80P(2)(d).
• Whether the fee charged under Section 234F was correctly levied given the claim that the return was filed on time.

ISSUE-WISE DETAILED ANALYSIS

Deduction under Section 80P(2)(d)

• Legal Framework and Precedents: Section 80P(2)(d) allows a deduction for interest received from a cooperative society. The definition of a cooperative society is provided in Section 2(19) of the Act. Relevant precedents include the Tribunal's decision in Vishva Villa Co-op Housing Society and the case of Kaliandas Udyog Bhavan Premises Co-operative Society Ltd., which interpreted the eligibility of interest received from cooperative banks.
• Court's Interpretation and Reasoning: The Tribunal concurred with previous decisions that a cooperative bank qualifies as a cooperative society under Section 80P(2)(d). Thus, interest from a cooperative bank is eligible for deduction.
• Key Evidence and Findings: The Tribunal examined the legislative amendments and judicial precedents to determine the eligibility of interest from cooperative banks.
• Application of Law to Facts: The Tribunal applied the interpretation that cooperative banks are cooperative societies, thus allowing the deduction claimed by the Assessee.
• Treatment of Competing Arguments: The Tribunal dismissed the CIT(A)'s view that interest from cooperative banks is ineligible, aligning with broader judicial interpretation.
• Conclusions: The Tribunal allowed the deduction under Section 80P(2)(d), reversing the CIT(A)'s decision.

Timeliness of Return Filing

• Legal Framework and Precedents: Section 139(1) specifies the due date for filing returns. The Tribunal considered the statutory timeline for cooperative societies requiring audits.
• Court's Interpretation and Reasoning: The Tribunal found that the return was filed within the due date, as the Assessee filed on 26/09/2018, before the deadline of 30/09/2018.
• Key Evidence and Findings: The Tribunal relied on the filing date and statutory due date to establish compliance.
• Application of Law to Facts: The Tribunal confirmed that the return was timely, thus qualifying the Assessee for the deduction under Section 80P(2)(d).
• Treatment of Competing Arguments: The Tribunal dismissed the Revenue's contention of late filing, as the evidence showed timely submission.
• Conclusions: The Tribunal ruled that the return was filed on time, supporting the Assessee's eligibility for the deduction.

Levy of Fee under Section 234F

• Legal Framework and Precedents: Section 234F imposes a fee for late filing of returns. The Tribunal noted the absence of this issue in the CIT(A)'s order.
• Court's Interpretation and Reasoning: The Tribunal found no basis for this fee in the CIT(A)'s order, suggesting the Assessee pursue alternative remedies.
• Key Evidence and Findings: The Tribunal observed the absence of a relevant order from the CIT(A) regarding this fee.
• Application of Law to Facts: The Tribunal did not address the merits of the fee due to procedural grounds.
• Treatment of Competing Arguments: The Tribunal dismissed this ground, allowing the Assessee to seek other legal avenues.
• Conclusions: The Tribunal dismissed the appeal regarding the Section 234F fee, as it was not part of the CIT(A)'s order.

SIGNIFICANT HOLDINGS

• Legal Reasoning: The Tribunal held that "for the Assessment Year 2018-19, the deduction claimed by the Assessee under Section 80P(2)(d) of the Act could not have been disallowed on the ground that the return was filed after due date specified in Section 139(1) of the Act."
• Core Principles Established: The Tribunal reinforced the principle that cooperative banks qualify as cooperative societies for the purpose of Section 80P(2)(d) deductions.
• Final Determinations: The Tribunal allowed the deduction under Section 80P(2)(d) and confirmed the timely filing of the return. The appeal concerning the Section 234F fee was dismissed.