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TMI Blog2022 (7) TMI 1385X X X X Extracts X X X X X X X X Extracts X X X X ..... to claim deduction u/s 80P even if he has filed the return of income belatedly. Respectfully following the case THE CHIRAKKAL SERVICE CO-OPERATIVE BANK LTD. [ 2016 (4) TMI 826 - KERALA HIGH COURT] we hold that the assessee is eligible for deduction u/s 80P of the Act. - ITA No. 188/Coch/2021 - - - Dated:- 28-7-2022 - Shri George George K., Judicial Member And Shri Laxmi Prasad Sahu, Accountant Member For the Appellant : Shri V.S. Narayanan, CA. For the Respondent : Smt. J.M. Jamuna Devi, Sr. D.R. ORDER PER: L.P. SAHU, A.M. This is an appeal filed by the assessee against the order of the learned CIT(A), NFAC, DELHI dated 11.10.2021 for AY 2016-17 on the following grounds of appeal: - 1. The order of the learned Commissioner of Income Tax (Appeals) National Faceless Appeal Center dated 11-10- 2021for the assessment year2016-17 dismissing the appeal is against the law and contrary to the facts and circumstances of the case. 2. The amended Sec 80AC from 2018-19 is not applicable for AY 2016-17, the assessment year of your appellant. 3. The learned Commissioner of Income Tax (Appeals) NFAC went wrong in his view that Sec 80AC is applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d) The submissions of the Appellant on this issue in brief are as under:- Income from business is only Rs.4,21, 117/-. Provisions made in earlier years is reversed in P L account and taken credit. Provisions made. during the year is debited in P L account. This is the way in which Cooperative Societies in Kerala finalise their accounts. Provisions and reserves made during the year are added to Profit and Provisions and reserves of earlier year credited to P L account is deducted. Thus, Provisions and reserves made during the year of Rs.13,53,853/- are added back and Provisions and reserves of earlier year of Rs 11,36,164/- is deducted . Thus, the addition /adjustment of Rs.11,36,164/- mad by the AO is not correct and deserves to be deleted. e) The Appellant has claimed Exempt Income of Rs.11,36,064/- in computation of Income. This by no stretch of imagination is 'Exempt Income' as it consists of Reserve to remove bad and doubtful debts - Rs.95,588/- and Reserve for Interest arrears - Rs.10,40,476/-. The Appellant's contention stated that this is the way followed by the Cooperative Societies of that area is not sustainable and the action of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reserve for bad and doubtful debts 162673 6 Reserve for bad and doubtful assets 95588 7 Depreciation 235285 8 Reserve for deposit list difference 200 9 Provision for leave salary 44108 10 Reserve for furniture list difference 574 11 Provision for gratuity 213545 Total 11243799 Total 11356603 Profit of current year 107804 Loss for current year - Grand total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f computation) in determining the total income. (Copy of the statement of computation attached-Annexure 1 ).This method of accounting is followed in determining the total income every year. The learned assessing authority has considered only the deduction made for reversing the earlier years reserves and provisions and ignored the addition made for determining the total income in the statement of computation of total income.( Copy of the Profit and loss account of Cooperative societies Audit report attachedAnnexure 2). In computing the total income Rs. 11,36,064 ( Please refer schedule 3 in statement of computation) is deducted and Rs.13,53,853 is added to the profit as per profit and loss account. The addition of Rs.11,36,064 is not correct and is to be deleted. Without prejudice to the above it is submitted that in the intimation serialnumber 2 is the head of Income from business or profession ( Copy of the Intimation u/s 143(1) attached-Annexure -3). It can be seen that the addition of Rs.11,36,064 is made under the head Income from business or profession. Your appellant has income from banking and financial services to its members. Your appellant is entitled for deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn was processed under Section 143(1)(a) of the Act by observing that in schedule Chapter VI-A, under Part-C deduction in respect of certain incomes, in Sl.No. 2.1 deduction is claimed under Section 80P however return is not filed within due date . Against this observation the assessee filed writ petition before the Hon ble Madras High Court and the writ petition has been dismissed by observing as under: - 7. The scope of an 'intimation' under section 143(1)(a) of the Act, extends to the making of adjustments based upon errors apparent from the return of income and patent from the record, Thus to say that the scope of 'incorrect claim' should be circumscribed and restricted by the Explanation which employs the term 'entry' would, in my view, not be correct and the provision must be given full and unfettered play. The explanation cannot curtail or restrict the main thrust or scope of the provision and due weightage as well as meaning has to be attributed to the purposes of section 143(1)(a) of the Act. Respectfully following the order cited above we reject the contention raised by the assessee that the disallowance cannot be made under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich section 80A(5) is a provision inserted through the Finance Act 33/2009 with effect from 1.4.2013 after the insertion of section 80AC as per the Finance Act of 2006 with effect from 1.4.2006. This clearly evidences the legislative intendment that the inhibition contained in sub-section 5 of section 80A would operate by itself. In cases where returns have been filed, the question of exemptions or deductions referable to section 80P would 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reserve for current years interest arrears 697468 Reserve for bad and doubtful debts 162673 Depreciation 235285 Reserve for deposit list difference 200 Provision for leave salary 44108 Reserve for furniture list difference 574 Provision for gratuity 213545 Total 13,53,853 Similarly the reserve for previous years interest of Rs.140476/- and reserve for bad a doubtful debt of Rs.95,588/- which does not for the current year s income has also been reduced. The details are also given in the computation of income. Finally the assessee has computed income from business at Rs. 4,21,117/- to which the assessee has claimed deduction under Section 80P(2)(a) of the Act. We do not find any infirmity on the computation of income as computed by the assessee under the head business income . Since the assessee is eligible for deduction under Section 80P of the Act following the judgement of the Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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