2022 (9) TMI 474 - AT - Income Tax

Deduction u/s. 80P - hardship to file e-return of income before the due date as per provisions of section 139(1) - delay in filing the return was on account of two reasons, firstly, assessee s accountant left midway without informing and handover of pending duties and secondly, it took long time to reset login password, which was necessary to file e-return - HELD THAT - Assessee is dissatisfied with the denial of deduction u/s. 80P by CIT(A) by applying the provisions of section 80AC - The undisputed facts remains that the assessee filed belated e-return on 18-07-2020 for the AY 2019-20, which was beyond the due date prescribed u/s.139(1). As per amendment brought in by Finance Act, 2018 w.e.f 1-4-2018 in section 80AC of the Act, as per clause (ii) of the said section on or after first day of April, 2018, no deduction is admissible under any provisions of Chapter VIA of the Act unless the assessee furnishes return of income for such assessment year on or before the due date specified under sub-section (1) of section 139. The assessee in order to claim deduction u/s. 80P was required to file the return before the due date as specified in sub-section (1) of section 139 of the Act. Assessee has stated to have faced genuine hardship, which prevented it to file the return of income before the due date. In the instant case the assessee faced genuine hardship, which mainly arised on account of resetting of login password, which is necessary for e-filing the return - As observe that the genuineness of claim of the assessee regarding deduction u/s. 80P of the Act has not been examined and the claim was denied merely for delay in filing e-return. It will certainly create hardship to the assessee if such claim which may be a genuine claim is denied for this technical error. In the interest of justice restore the issue to the file of the AO and direct him to place the application of assessee of having faced genuine hardship to file e-return of income before the due date as per provisions of section 139(1) before the Board(Central Board of Direct Taxes(CBDT) for considering the same and in case the Board decides in favour of the assessee, then the claim of assessee u/s. 80P may be examined on merits in accordance with law. We direct the assessee to file necessary documents and application as referred above before the AO. Appeal of the assessee is allowed for statistical purpose.

Summary

Issues:
1. Condonation of delay in filing appeal.
2. Denial of deduction u/s 80P of the Income Tax Act.
3. Power to condone delay in filing return of income.

Condonation of Delay in Filing Appeal:
The appeal was found to be time-barred by 3 days, but the delay was condoned due to valid reasons related to consecutive holidays. The Tribunal admitted the appeal for adjudication despite the delay.

Denial of Deduction u/s 80P of the Income Tax Act:
The assessee, an agricultural marketing society, filed a belated e-return claiming a deduction u/s 80P of Rs. 9,48,435. However, the claim was denied as the return was filed after the due date. The CIT(A) upheld the denial citing section 80AC of the Act, which requires filing the return before the due date to claim deductions under Chapter VIA. The Tribunal noted the genuine hardship faced by the assessee, including an accountant leaving abruptly and difficulties in resetting the login password for e-filing. Despite the genuine reasons, the Tribunal found no provision to condone the delay under the Act but highlighted the CBDT's power under section 119(2)(c) to relax requirements in cases of genuine hardship. As the genuineness of the deduction claim was not examined, the Tribunal restored the issue to the AO for reconsideration, directing the assessee to submit necessary documents and the application to the CBDT for review.

Power to Condone Delay in Filing Return of Income:
The Tribunal acknowledged the CBDT's authority under section 119(2)(c) to relax requirements for genuine hardship cases. Considering the genuine hardship faced by the assessee in filing the return due to password issues, the Tribunal directed the AO to present the assessee's application of hardship to the CBDT for review. The Tribunal emphasized the need for a fair examination of the claim and granted the assessee an opportunity to be heard. Ultimately, the Tribunal allowed the appeal for statistical purposes, emphasizing the importance of considering genuine hardships in tax matters.

This detailed analysis of the judgment covers the issues of delay condonation, denial of deduction u/s 80P, and the power to condone delay in filing the return of income, providing a comprehensive overview of the legal reasoning and outcomes in each aspect of the case.