2023 (1) TMI 606 - AT - Income Tax

Deduction u/s 80P(2)(a) - return of income filed belatedly u/s 139(4) - adjustment u/s 143(1) - assessee is a co-operative society and it filed return of income after the due date, accordingly, as per section 80AC(ii) of the Act, the assessee is not eligible to claim deduction as per the amended provisions - HELD THAT - On going through the inserted clause (ii) in section 80AC assessee has to comply the section 80AC of the Act, if it wants to claim deduction under Chapter VIA under the heading C-Deductions in respect of certain incomes . The assessee has claimed deduction U/s 80P(2)(a)(i) on profits earned during the year and filed return of income on 31.12.2018, which is beyond the due date as prescribed as per section 139(1) of the Act, accordingly the assessee is not complying with the condition which are prescribed by section 80AC(ii) of the Act. The Hon'ble Apex Court in the recent decision , settled the law in case of an exemption / deduction clause in a tax statute in the case of Checkmate Services (P.) Ltd 2022 (10) TMI 617 - SUPREME COURT The assessee was required to file its return of income for claiming the deduction u/s 80P(2)(a)(i) of the Act within the due date as per amendment made in the section 80AC of the Act., whereas the assessee has filed return of income on 31.12.2018, which is beyond the due date, therefore the assessee is not eligible for claiming benefit of deduction u/s 80P(2)(a)(i) - The assessee has relied on judgments, which have been quoted in its grounds of appeal, which are not applicable in the present facts of the case. Our view is supported by the judgment of Veerappampalayam Primary Agricultural Cooperative Credit Society Ltd. 2021 (4) TMI 1169 - MADRAS HIGH COURT in which it has been observed that the adjustment can be made u/s 143(1) of the Act. while processing the return of income and the provisions of section 80AC(ii) make it clear that any deduction that is claimed under Part C of Chapter VI-A would be admissible only if the return of income in that case were filed within the prescribed due date. Thus, no claim under any of the provisions of Part C of Chapter VIA would be admissible in the case of a belated return . Thus we hold that the assessee is not eligible to claim deduction as per section 80P(2)(a)(i) of the Act. Accordingly, the grounds raised by the assessee in this regard is dismissed.

Issues Involved:
1. Validity of the Appellate Commissioner's order.
2. Disallowance of deduction claimed under Section 80P(2)(a)(i) of the Income Tax Act.
3. Application of Section 80AC regarding filing of returns.
4. Interpretation of Section 80P as a benevolent provision.
5. Jurisdictional High Court precedents.
6. Levy of fee under Section 234F.
7. Levy of interest under Sections 234A, 234B, and 234C.

Detailed Analysis:

1. Validity of the Appellate Commissioner's Order:
The appellant challenged the order passed by the CIT(A) on the grounds that it was incorrect, irregular, improper, unlawful, and opposed to the law and facts of the case. However, the tribunal found no merit in these claims and upheld the CIT(A)'s decision.

2. Disallowance of Deduction Claimed under Section 80P(2)(a)(i):
The appellant filed the return of income on 31.12.2018, claiming a deduction of Rs. 7,64,063 under Section 80P(2)(a)(i). The due date for filing the return was 31.08.2018. The return was processed under Section 143(1) on 31.05.2019, denying the deduction and raising a demand of Rs. 2,90,710. The CIT(A) upheld this disallowance, citing that the return was not filed within the stipulated time under Section 139(1).

3. Application of Section 80AC:
Section 80AC was amended effective from 01.04.2018, stating that deductions under Chapter VI-A, including Section 80P, would not be allowed unless the return was filed on or before the due date specified under Section 139(1). The tribunal upheld this provision, emphasizing that the appellant did not comply with the amended Section 80AC, thereby disqualifying the claim for deduction.

4. Interpretation of Section 80P as a Benevolent Provision:
The appellant argued that Section 80P should be liberally construed as a benevolent provision, citing the Supreme Court's judgment in Mavilayi Service Cooperative Bank Ltd. & Others v. CIT. However, the tribunal noted that this judgment was before the amendment to Section 80AC and thus was not applicable to the current case. The tribunal emphasized the need for strict compliance with the amended provisions.

5. Jurisdictional High Court Precedents:
The appellant cited the Karnataka High Court's decision in FATHIMA BAI v. ITO to support the claim for deduction. However, the tribunal found that the cited case laws did not apply to the present facts and upheld the CIT(A)'s decision.

6. Levy of Fee under Section 234F:
The tribunal upheld the levy of a fee of Rs. 5,000 under Section 234F, as the appellant's total income exceeded Rs. 5 lakhs and the return was filed beyond the due date specified under Section 139(1). The tribunal referred to the provisions of Section 234F, which mandate a fee for delayed filing of returns.

7. Levy of Interest under Sections 234A, 234B, and 234C:
The tribunal found that the levy of interest under Sections 234A, 234B, and 234C was consequential in nature, arising from the delayed filing of the return and the disallowance of the deduction claimed under Section 80P(2)(a)(i).

Conclusion:
The tribunal dismissed the appeal, upholding the CIT(A)'s order that denied the deduction under Section 80P(2)(a)(i) due to the late filing of the return, as mandated by the amended Section 80AC. The tribunal also upheld the levy of fees and interest under Sections 234F, 234A, 234B, and 234C. The judgment emphasized strict compliance with statutory provisions and dismissed the appellant's reliance on earlier case laws that did not consider the amended provisions.

← Previous Next →