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2025 (4) TMI 606 - AT - Income TaxDenial of deduction u/s 80P - return of income was field on after the due date for filing the return - HELD THAT - The audit report was made ready on 10/08/2018 but the same was not filed but filed before us whereas in the cited order the assessee had not filed the audit report and also not furnished any information about the audit in the appropriate column in the income tax return and therefore this Tribunal had not accepted the case of the assessee and dismissed the same. Therefore the order cited by the DR could not be cited as precedent on the facts and circumstances of the case and therefore we are not relying on the said order passed by this Tribunal. We are restoring the entire issue to the file of the AO with the direction to consider the audit report furnished by the assessee and if the same is found otherwise eligible grant the deduction u/s. 80P of the Act by suitably amending the intimation passed u/s. 143(1) -Appeal filed by the assessee is allowed for statistical purposes.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS Deduction under Section 80P and Filing Deadlines The relevant legal framework involves Section 80P of the Income Tax Act, which allows deductions for co-operative societies, and the procedural requirements under the Karnataka Co-operative Societies Act, 1959. The Court examined whether the assessee filed the return within the extended deadline of 31/10/2018, as opposed to the original deadline of 31/08/2018. Key evidence included the audit report and acknowledgment from the Deputy Director, Credit Co-operative Societies Audit, Mangaluru, indicating that the audit was completed by 10/08/2018 and filed on 01/09/2018. The Tribunal found that these documents supported the assessee's claim that the return was filed within the extended deadline. The Court concluded that the failure to mention the audit report details in the return was not fatal to the claim, given the evidence presented. The Tribunal restored the issue to the Assessing Officer to consider the audit report and, if eligible, grant the deduction. Opportunity to Present Case The appellant argued that they were not given sufficient opportunity to present their case, particularly regarding the audit conducted under the Karnataka Co-operative Societies Act. The Court noted that the documents proving the audit were not presented to the lower authorities, which limited their ability to consider the claim fully. The Tribunal directed the Assessing Officer to review the audit report and related documents, ensuring the assessee's claim is considered based on complete evidence. Failure to Mention Audit Details The Tribunal considered whether the omission of audit details in the return justified the denial of the deduction. The legal framework does not explicitly require the audit date to be mentioned in the return for the deduction to be valid, provided the audit was conducted as required. Based on the evidence, the Tribunal found that the audit was completed and filed timely, supporting the deduction claim. The Tribunal emphasized that procedural omissions should not override substantive compliance when evidence supports the claim. SIGNIFICANT HOLDINGS The Tribunal held that the failure to mention audit details in the return did not invalidate the deduction claim under Section 80P, provided the audit was conducted within the required timeframe. The Tribunal emphasized the importance of substantive compliance over procedural errors, stating, "The non-mentioning of the audit details in the column is not fatal since the facts establish that the books of accounts were audited well before the date of filing of the return of income." The Tribunal restored the matter to the Assessing Officer to reconsider the deduction claim based on the audit report and related documents, directing that if the audit is found compliant, the deduction should be granted. The appeal was allowed for statistical purposes, with the Tribunal underscoring the necessity for tax authorities to consider all relevant evidence before making determinations on deductions.
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