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TMI Blog2018 (7) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee concerning assessment years 2012-2013 and 2013-2014 and one appeal at the instance of the Revenue concerning assessment year 2014-2015. The assessee had also filed stay petitions seeking to stay the recovery of outstanding tax arrears. Since common issue is raised in these appeals, they were heard together and are being disposed off by this consolidated order. 2. First we shall adjudicate the assessee s appeals and the stay applications: ITA No.200/Coch/2018 201/Coch/2018 3. Briefly stated facts of the case are as follows:- The assessee is a primary agricultural credit society registered under the Kerala Co-operative Societies Act, 1969. It is engaged in the business of providing loans and advances to its members as well as accepting deposits from them. For the assessment years 2012-2013 and 2013-2014, returns of income were filed disclosing loss of ₹ 1,94,61,920 and ₹ 3,01,57,865, respectively. In the returns of income filed, the assessee did not claim deduction u/s 80P of the I.T.Act. According to assessee, the deduction u/s 80P(2) of the I.T.Act could not be claimed since it was not having any positive income. The assessments were comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t claimed since the return was showing loss. The assessments were completed denying certain claims of deduction u/s 36(1)(viia) of the I.T.Act, therefore, the loss income was converted into positive income. The Assessing Officer was duty bound to consider whether the assessee was entitled to the claim of deduction u/s 80P(2) of the I.T.Act when assessments were completed on positive income. Moreover, subsequently the assessee had filed returns of income for both the assessment years 2012-2013 and 2013-2014 making the claim of deduction u/s 80P(2) of the I.T.Act. The revised returns claiming the deduction u/s.80P(2) of the I.T.Act was not acted upon since the same was filed beyond the time limit prescribed under the Act. The Hon ble High Court in the case of Chirakkal Service Coop Bank Ltd vs CIT (supra) 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. The Hon ble High Court was considering the following substantial questions of law:- ( B) Whether the Tribunal is justified in denying the exemption under section 80P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n notice is issued on the premise of escaped assessment referable to section 148 of the IT Act. This position notwithstanding, when an assessment is subjected to first appeal or further appeals under the IT Act or all questions germane for concluding the assessment would be relevant and claims which may result in modification of the returns already filed could also be entertained, particularly when it relates to claims for exemptions. This is so because the finality of assessment would not be achieved in all such cases, until the termination of all such appellate remedies. Under such circumstances, the Tribunal was not justified in denying exemption under section 80P of the IT Act on the mere ground of belated filing of return by the assessee concerned. A return filed by the assessee beyond the period stipulated under section 139(1) or 139(4) or under section 142(1) or section 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 IT Act. In all such situations, it cannot be treated that a return filed at any stage of such proceedings could be treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed belatedly. The relevant finding of the CIT(A) reads as follows:- 4.5 In the above decision, Hon ble High Court was dealing with the claims made under section 80P of the Act in the return of income filed belatedly and the Court held that claim made in the return of income filed belatedly also required to be considered and allowed. In this case, the assessee filed revised return of income during the course of assessment proceedings and claimed deduction under section 80P of the Act. Therefore, the claim made in the revised return even though belated is covered by the decision of the High Court, as above. Hence, it is held that the assessee is eligible for deduction under section 80P of the Act and the grounds raised by the assessee are allowed. 10. Aggrieved by the order of the CIT(A), the Revenue has preferred the present appeal before the Tribunal. The learned Departmental Representative relied on the grounds raised. The learned AR, on the other hand, submitted that the issue in question is squarely covered in favour of the assessee by the judgment of the Hon ble jurisdictional High Court in the case of Chirakkal Service Co-op Bank Ltd vs CIT (supra). 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d definitely have to be considered and granted if eligible. 20. Here, questions would arise as to whether belated returns filed beyond the period stipulated under section 139(1) or section 139(4) as well as following sections 142(1) and 148 proceedings could be considered for exemption. If those returns are eligible to be accepted in terms of law, going by the provisions of the statute and the governing binding precedents, it goes without saying that the claim for exemption will also stand effectuated as a claim duly made as part of the returns so filed, for due consideration. 21. When a notice under section 142(1) is issued, the person may furnish the return and while doing so, could also make claim for deduction referable to section 80P. Not much different is the situation when pre-assessment enquiry is carried forward by issuance of notice under section 142(1) or when notice is issued on the premise of escaped assessment referable to section 148 of the IT Act. This position notwithstanding, when an assessment is subjected to first appeal or further appeals under the IT Act or all questions germane for concluding the assessment would be relevant and claims which may r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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