2023 (2) TMI 159 - AT - Income Tax

Deduction u/s 80P - CPC did not accept the claim of the assessee and observed that return was filed beyond due date for filing of return - fresh claim of deduction in the revised return of income - AO rejected the rectification application filed by the assessee under section 154 and CIT(A) also dismissed the appeal of the assessee - HELD THAT - Assessee revised its return of income to withdraw the claim and subsequently claiming the carried forward or set-off of any loss but the ratio decided in respect of revising the return with the objective is squarely applicable in the case on hand. On perusal of the income tax return filed by the assessee in which it has itself accepted that its books of accounts are not required to be audited under section 44AB of the Act and is also not required for audit under any other law as time being force. Even during the course of hearing, the assessee did not submit the audit report as per section 63 of the Karnataka State Co-operative Society Act, 1959. The Trading, Proft Loss Account and Balance Sheet submitted by the assessee has been certified signed by a Chartered Account Shri. S. G. Kulkarni but not Tax Audit Report. As found substance on the submission of the learned DR. and relying on the judgment of Hon ble Supreme Court of India Wipro Ltd 2022 (7) TMI 560 - SUPREME COURT cited by the learned DR, the assessee cannot make fresh claim in the revised return which was not claimed in the original return of income, only the omission or wrong statement may be revised as stated in section 139(5) The omission or wrong statement has not been defined in the Income Tax Act. The assessee was well aware about the business carried on by it and is also aware about the filing of return of income and he has made provision for income tax in its books for preceding assessment years. The assessee will not get the benefit of extended due date for filling return of income as notified by the Ministry of Finance, thus observed that it was applicable to those assessees whose books of accounts are required to be audited and filed Tax Audit Report in the specified Form but in the assessee s case he did not submit audit report as required by the relevant law for the time being in force. On perusal of the Income Tax Return filed observed that the assessee has not given any information about the Audit in the appropriate coloumn. CIT (A) has rightly dismissed the appeal of the assessee.

Issues Involved:
1. Error in the manner of passing the order by CIT(A).
2. Disallowance of the claim under section 80P(2)(a)(i) of the Income Tax Act.
3. Timeliness of the original and revised return filings.
4. Consideration of the revised return as the original return.
5. Due date for filing the return for cooperative societies.
6. Excessive disallowances and interest levied.

Detailed Analysis:

1. Error in the Manner of Passing the Order by CIT(A):
The assessee contended that the CIT(A) erred in the manner of passing the order. However, the Tribunal upheld the decision of CIT(A), noting that the CIT(A) had followed due process and provided adequate reasoning for the disallowance of the deduction claimed under section 80P.

2. Disallowance of the Claim under Section 80P(2)(a)(i) of the Income Tax Act:
The primary issue revolved around the disallowance of the deduction under section 80P(2)(a)(i). The assessee claimed this deduction in the revised return filed on 16.11.2018. However, the Tribunal observed that the original return was filed on 08.09.2018 without claiming the deduction. The Tribunal referenced section 80AC, which mandates that deductions under Chapter VI-A are only permissible if the return is filed within the due date specified under section 139(1). The Tribunal upheld the disallowance, noting that the revised return was filed beyond the due date and thus did not qualify for the deduction.

3. Timeliness of the Original and Revised Return Filings:
The assessee argued that the original return filed on 08.09.2018 was within the due date since the books of accounts were audited under the Karnataka State Co-operative Societies Act. However, the Tribunal noted that the due date for filing the return was 31.08.2018, and the original return was filed late. Furthermore, the Tribunal emphasized that the revised return filed on 16.11.2018 could not rectify the lateness of the original return.

4. Consideration of the Revised Return as the Original Return:
The assessee contended that the CPC erred in considering the revised return as the original return while adopting the income from the revised return. The Tribunal, referencing the Supreme Court judgment in PCIT vs. Wipro Ltd., held that a revised return substitutes the original return but cannot be used to make new claims not included in the original return. Thus, the Tribunal upheld the CPC's consideration of the revised return.

5. Due Date for Filing the Return for Cooperative Societies:
The assessee argued that the due date for filing the return should be 31.10.2018, as their books of accounts were audited under the Co-operative Societies Act. The Tribunal noted that the assessee did not submit the audit report as required under section 63 of the Karnataka State Co-operative Society Act. The Tribunal concluded that the extended due date was not applicable since the audit report was not furnished, and the original return was filed late.

6. Excessive Disallowances and Interest Levied:
The assessee claimed that the disallowances confirmed by CIT(A) were arbitrary and excessive. The Tribunal reviewed the facts and upheld the disallowances, noting that the assessee did not provide sufficient evidence to justify the deductions claimed. The Tribunal also upheld the interest levied, finding no grounds to delete it.

Conclusion:
The Tribunal dismissed the appeal of the assessee, upholding the CIT(A)'s order that disallowed the deduction under section 80P and confirmed the interest levied. The Tribunal emphasized the importance of filing returns within the due date and the limitations on making new claims in revised returns.

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