2024 (8) TMI 1170 - AT - Income Tax

Deduction u/s 80P(2)(a)(i) - invocation of provisions of section 80A(5) for denial of captioned deduction - assessee has not filed a valid return of income as per the provisions of section 139, thus, claim denied - HELD THAT - Unable to appreciate the argument of the Ld. AR that the provisions of section 80AC are not applicable to the case of the assessee as the substitution came into effect from 01/04/2018 ie., for the AY 2018-19 onwards because even after the substitution by Finance Act, 2018, to claim the deduction u/s. 80P(2)(a)(i) of the Act, the assessee has to file a valid return of income within the stipulated time as per the provisions of section 139 of the Act which is missing in the instant case. Since the return of income has not been filed in accordance with the provisions of section 139 of the Act, it was rightly held by the Ld. Revenue Authorities that the claim made by the assessee for deduction u/s. 80P(2)(a)(i) cannot be held as an admissible deduction under the Act - Decided against assessee.

Summary

Issues:
1. Validity of deduction claim under section 80P of the Income Tax Act for AY 2017-18.
2. Applicability of section 80A(5) in denying the deduction claim.
3. Interpretation of section 80AC in relation to the deduction claim.
4. Compliance with the provisions of section 139 for filing a valid return of income.

Analysis:

Issue 1: Validity of deduction claim under section 80P
The case involved an appeal by a Primary Agricultural Cooperative Credit Society Limited against the denial of a deduction claim under section 80P of the Income Tax Act for AY 2017-18. The assessee had deposited cash during demonetization but failed to file a return of income within the prescribed time. The Assessing Officer (AO) disallowed the deduction claim, leading to the appeal.

Issue 2: Applicability of section 80A(5)
The AO invoked section 80A(5) of the Act, which mandates that no deduction shall be allowed if the assessee fails to make a claim in the return of income. The Commissioner of Income Tax (Appeals) upheld this decision, stating that the assessee's failure to file a return justified the denial of the deduction under section 80A(5).

Issue 3: Interpretation of section 80AC
The appellant argued that section 80AC did not apply to their case, as it came into effect from AY 2018-19 onwards. However, the Tribunal noted that even after the amendment, the requirement to file a valid return within the specified time remained for claiming the deduction under section 80P(2)(a)(i).

Issue 4: Compliance with section 139 provisions
The Tribunal emphasized the importance of complying with section 139 for filing a valid return of income. The failure to file a return within the prescribed time led to the denial of the deduction claim under section 80P(2)(a)(i). Citing a previous Tribunal decision, it was held that the claim could not be considered admissible due to the belated filing of the return.

In conclusion, the Tribunal upheld the orders of the Revenue Authorities, dismissing the appeal of the assessee on the grounds of non-compliance with the provisions of section 139 and the consequent denial of the deduction claim under section 80P.