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TMI Blog2024 (10) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... filed return of income, admittedly in response to notice u/s 142(1) of the Act. This is a valid return of income, since in terms of the provisions of Section 142(1) of the Act, the assessee can be directed to file a return of income where he has not otherwise made a return. Therefore, the fact of the matter is that the assessee had made a claim of deduction u/s 80P of the Act in a valid return filed u/s 142(1) of the Act. In terms of provisions of Section 80A(5) of the Act, as interpreted above by us, the assessee s claim having been made in a return of income, it is allowable. The above findings are supported by the decision of the Hon ble Kerala High Court in the case of Chirakkal Service Co-operative Bank Ltd., Kannur [ 2016 (4) TMI 826 - KERALA HIGH COURT ] where in the Hon ble High Court categorically noted that, for the purposes of Section 80A(5) of the Act, even a return filed in response to notice u/s 142(1) of the Act was a valid return and any claim made therein, therefore, was allowable. Assessee has been wrongly denied claim of deduction u/s 80P - Decided against revenue. - SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER For the Assessee: Shri M.K. Patel, Advocate For the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not file its return within the time stipulated u/s 139(1) and passed assessment order u/s 144 by disallowing the assessee s claim of Rs. 1797494/- made u/s. 80P of the Act. The assesse society, aggrieved by such order of AO Ward-3, Gandhinagar filed an appeal before Ld. CIT(A), (NFAC) who vide its order dated 22.11.2021 passed u/s 250 of the Act dismissed the appeal filed against the disallowance of deduction claimed u/s. 809 of the Act. Now the assessee society, in order to get proper justifications for the circumstances it had faced which were beyond its control under which it could not respond to the notices from AO by filing a further appeal before ITAT and to represent its case accordingly. Since, the time limit to file a appeal against the order passed u/s,250 of the Act by the CIT(A), NFAC could not be observed the asessee society humbly requests to condone the delay for filing an appeal before ITAT and also request to allow to file belated appeal before ITAT under the circumstances it was facing during the pandemic outburst of Corona as under : 1. The period of notices issued by A.O. Ward-3, Gandhinagar unfortunately falls under Pandemic outburst of Corona and the nation wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to controvert the petition. Accordingly, the Court is inclined to exercise discretion in favour of the petitioners, however with some exemplary cost. 5. The ld.DR opposed the condonation of the delay. 6. Heard both the parties and perused pleadings of the assessee supported by the affidavits of the assessee and their Chartered Accountant, Shri Nilesh Pandya. I am of the view that in view of the affidavit filed by the assessee and the CA of the society, it is undisputed fact that the impugned delay in filing appeal before the Tribunal by 581 days is attributable to their earlier Chartered Accountant, Shri Nilesh Pandya, who has stated to be suffering from COVID and office work had come to standstill during that period, and therefore was unable to inform the assessee regarding passing of the impugned order of the ld.CIT(A). Taking note of the decision of the Hon ble Gujarat High Court in the case of Nimesh Dilipbhai Brahmbhatt (supra), I therefore consider it as a fit case for condonation of delay since the assessee-society surely should not be penalized for the inaction of the professional engaged by the assessee. Therefore, I condone the impugned delay of 581 days in filing appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t entitled to claim deduction u/s 80P of the Act. The relevant finding of the ld.CIT(A) at para 5.3 of his order is as under: 10. Aggrieved by this confirmation of denial of deduction u/s 80P of the Act by the Ld.CIT(A), the assessee has come in appeal before us. The contention of ld. Counsel for the assessee was that this denial of deduction was against the provisions of law as interpreted by higher judicial authorities. He drew my attention first to the fact that the return of income was filed by the assessee in response to notice u/s 142(1) of the Act. He thereafter referred to the decision of Hon ble Kerala High Court in the case of Chirakkal Services Co-operative Bank Ltd. Vs. CIT, 68 taxmann.com 298 (Ker), wherein he pointed out that the Hon ble Court held that the claims for deduction made in the return filed beyond the period stipulated under section 139(1) or 139(4) and made in returns filed u/s 142(1) or even u/s 148 of the Act cannot be denied in terms of section 80A(5) of the Act. Copy of the decision was placed before us and my attention was drawn to the relevant finding of the Hon ble Court in this regard from para 18 onwards . Thereafter, reference was made to the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the assessee either by the due date of filing of return of income or a belated return or a revised return respectively. The fact noted in the orders of the authorities below is that the assessee filed return during the assessment proceedings in response to notice u/s 142(1) of the Act and claimed deduction u/s 80P in the same. 15. Having noted this fact, I have also noted that both the authorities below have invoked different sections for denying the claim of deduction, the Assessing Officer having invoked Section 80A(5) of the Act and the ld. CIT(A) having invoked Section 80AC of the Act. 16. I have gone through the provisions of both these sections, and I have noted that these sections operate in different scope and the correct section to be invoked in the present case for allowing or denying claim of deduction is Section 80A(5) of the Act, as done by the Assessing Officer. This is evident from a bare perusal of the provisions of Section 80A(5) and Section 80AC of the Act, which are being reproduced here under for clarity:- Section 80A(5) (5) Where the assessee fails to make a claim in his return of income for any deduction under section 10A or section 10AA or section 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 80A(5) of the Act of the claim to have been made in a return of income to be allowable, which is applicable. At the cost of repetition, I may state that what Section 80A(5) only stipulates is that, for the claim to be allowable, it has to be made in the return of income filed by the assessee. It does not specify that the return of income has to be filed u/s 139(1) or 139(4) or 139(5) of the Act. The only condition is that the claim has to be made in a return of income filed which means a valid return of income filed. In the facts of the present case, the assessee has filed return of income, admittedly in response to notice u/s 142(1) of the Act. This is a valid return of income, since in terms of the provisions of Section 142(1) of the Act, the assessee can be directed to file a return of income where he has not otherwise made a return. Sub-section (i) of Section 142(1) of the Act are reproduced hereunder for clarity:- S.142. (1) For the purpose of making an assessment under this Act, the [Assessing] Officer may serve on any person who has made a return [under section 115WD or section 139 [or in whose case the time allowed under sub-section (1) of section 139] for furnishing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year, no deductions shall be allowed. This embargo in section 80A(5) would apply, though section 80P is not included in section 80AC. This is so because, the inhibition against allowing deduction is worded in quite similar terms in sections 80A(5) and 80AC, of which 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 intendiment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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