2018 (7) TMI 369 - AT - Income Tax

Denying the exemption u/s 80P - belated filing of return by the assessee - Held that - Hon ble High Court in the case of Chirakkal Service Co-op Bank Ltd vs CIT (2016 (4) TMI 826 - KERALA HIGH COURT) had held at para 21 that appeals are continuation of assessment proceedings and even if the return of income was filed before the appellate authority claiming deduction u/s 80P(2), the same has to be acted upon Return filed beyond the period stipulated u/s 148 can also be accepted and acted upon provided further proceedings in relation to such assessments are pending in the statutory hierarchy of adjudication in terms of the provisions of the I. T. Act. We direct the Assessing Officer to consider the claim of deduction u/s 80P of the I. T. Act as expeditiously as possible. - Appeals filed by the assessee are allowed for statistical purposes.

Summary

Issues Involved:
Assessment based on non-filing of returns under section 139 of the Income Tax Act, justification of notices u/s 148, denial of deduction u/s 80P(2) of the Income Tax Act, belated filing of returns, consideration of deductions during appellate proceedings.

Analysis:
1. The appeals were filed against two orders of the CIT(A) for the assessment years 2012-2013 and 2013-2014. The Assessing Officer completed the assessments under section 144 r. w. s. 147 due to non-filing of returns by the assessee. The primary contentions before the CIT(A) were the justification of notices u/s 148 and the denial of deduction u/s 80P(2) of the Income Tax Act. The CIT(A) upheld the assessments and denied the deduction based on non-filing of returns by the assessee.

2. The assessee appealed to the Tribunal, claiming that returns were filed during the pendency of the appeals, and deduction u/s 80P(2) should be allowed. The Departmental Representative supported the orders of the Assessing Officer and CIT(A). The Tribunal noted that the High Court had held that appeals are a continuation of assessment proceedings, and even belatedly filed returns can be considered for deductions.

3. The High Court's judgment clarified that if returns are filed beyond the stipulated period, they can still be accepted for consideration of exemptions or deductions under section 80P. The Tribunal directed the Assessing Officer to consider the deduction u/s 80P expeditiously. Consequently, the appeals by the assessee were allowed for statistical purposes, and the stay applications were dismissed as infructuous.

4. The Tribunal emphasized that a return filed beyond the period stipulated under section 148 can be accepted if further proceedings are pending. Therefore, the Assessing Officer was directed to consider the deduction u/s 80P promptly. As a result, the appeals were allowed for statistical purposes, and the stay applications were dismissed.