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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 ..... i.e. by April, 2022. But the assessee could file the appeal on 25.8.2023 resulting in delay in all of 581 days. The ld.counsel for the assessee further submitted that the delay is attributable to the Chartered Accountant of the assessee, Shri Nilesh Pandya who did not communicate the passing of the order by the ld.CIT(A) to the assessee for necessary action at their end, and it was only when a new professional was engaged by the Society in the financial year 2023-24 that the assessee-society became aware of the delay in filing of the appeal, and immediately engaged an Advocate for the same. The contents of the application seeking condonation of delay in the form of an affidavit by the Secretary of the Society is reproduced herein below: We have to bring to your kind attention that the assessee Randheja Dudh utpadak Sahakari Mandali Ltd.," (here in after referred to as Society) is co-operative society engaged in supplying milk collected from its members to Federal Co-operative Society as rightly noticed in the order referred to above. Assessee is a registered under, co-operative Act and therefore, by virtue of that every co-operative Act, it is required to get its accounts prepar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d email address appearing in the personal details are belongs to Advocate Nilesh R Pandya. Further the society has not received any notice form NFAC through post. As learn from CA that notices were issued by email. Society was not aware of the system. The Society only came to know that when from current FY 2023-24 has engaged a CA came to know about the delay in filling of Appeal at Your esteem office. No sooner the mistake was notice Society has immediately engaged the advocate for filling the appeal. The Society prays to your Honour that for natural justice and fair play please condone the delay and oblige. Thanking You 3. The affidavit of the CA of the assessee-society on whose delay is attributable was also filed before us, which reads as under: 4. The ld.counsel for the assessee referred to the decision of the Hon'ble Gujarat High Court in the case of Nimesh Dilipbhai Brahmbhatt Vs. Hitesh Jayantilal Patel in SCA No.6547 of 2020 dated 2.5.2022 for the proposition that the delay attributable to the professionals or the CA of the assessee needs to be condoned. My attention has drawn to para-14 of the said judgment of the Hon'ble High Court, which reads as under: "14. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " 8. Solitary issue in the present appeal is against denial of deduction under section 80P(2) of the Act. The assessee is a cooperative society providing certain services to its members, such as, supply of milk, ghee, kapas etc. No return of income was filed by the assessee either under section 139(1) or even belatedly in terms of section 139(4) of the Act. It was only subsequently through a letter dated 22.11.2019 that a return of income was filed claiming deduction under section 80P of the Act amounting to Rs.17,97,494/- . The same was denied by the Assessing Officer invoking section 80A(5) of the Act , which requires such claims to be made in the returns of income to be allowable. The AO finding no return of income having been filed by the assessee, he accordingly denied the claim of deduction u/s 80P of the Act. 9. The matter was carried in appeal before the ld.CIT(A). The ld.CIT(A) confirmed the disallowance noting that there was no valid return of income was filed by the assessee. The Ld.CIT(A) applied and interpreted the provisions of section 80AC of the Act while denying the claim and held that in the impugned year, i.e A.Y 2017-18, the claim would have been allowable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requirement of claim of deduction in return of income under section 80A(5) of the Act was directory in nature. 12. On the other hand, the ld.DR relied on the order of the ld.CIT(A) and stated that the provisions of law are plain and clear, and there is no scope for any such interpretation that even without claiming any deduction in the return of income, the assessee is still entitled to the same, in terms of provisions of section 80A(5) of the Act. 13. I have heard both the parties. The issue to be adjudicated is relating to denial of deduction claimed by the assessee u/s 80P of the Act. The Assessing Officer denied the same noting no return of income being filed by the assessee and therefore invoking Section 80A(5) of the Act which requires such claims to be made in the returns of income filed to be allowable. The ld. CIT(A) upholding the disallowance made by the Assessing Officer invoking Section 80AC of the Act, noting that in terms of the said section the claim would have been allowable to the assessee even if the same is claimed in a belated or revised return, however, since the assessee having not filed a valid return of income in the instant case, such deduction was not al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year on or before the due date specified under sub- section (1) of section 139.] 17. As is evident from a bare reading of the sections, while section 80A(5) of the Act allows claims of deduction in respect of incomes, which includes deduction claimed under section 80P of the Act, only if claimed in a return of income, Section 80AC of the Act stipulates a further condition that certain claims of deductions will be allowed only if the returns of income are filed within the due dates specified u/s 139(1) of the Act. Thus, while the mandatory requirement for claiming any deduction under Chapter VI of the Act or the other sections specified u/s 80A(5) of the Act is that the claim has to be made in the return of income, Section 80AC further imposes a condition in relation to certain deductions that the returns of income in which the claims are so made have to be filed within the due dates specified u/s 139(1) of the Act. 18. Having said so, in the facts of the present case, the ld. CIT(A) has noted that Section 80P of the Act has been included in the purview of Section 80AC of the Act only with effect from the subsequent assessment year, i.e. AY 2018-19; the impugned assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in a return of income, it is allowable. 21. 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 Vs. CIT, reported in [2016] 68 taxmann.com 298 (Kerala), 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. Paragraph No. 18 to 21 of the said order are reproduced here under:- "18. Questions B and C relate to denial of exemption on ground referable to belated filing of return, that is to say, returns filed beyond the period stipulated under section 139(1) or section 139 (4), as the case may be, as well as section 142 (1) or section 148, as the case may be. There are no cases among these appeals where returns were not filed. There are cases where claims have been made along with the returns and the returns were filed within time. Still further, there are cases where returns were filed belatedly, that is to say, beyond the period stipulated under sub-section 1 or 4 of section 139; and, there are also ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 treated as non est in law and invalid for the purpose of deciding exemption under section 80P of the IT Act. We thus answer substantial questions of law B and C formulated and enumerated above." 22. In view of the above, I hold that the assessee has been wrongly denied claim of deduction u/s 80P of the Act. The Assessing Officer is directed to allow the said clai ..... 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