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TMI Blog2025 (3) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... SINGH, JUDICIAL MEMBER For the Appellant : Shri Akshay M Modi, C.A. For the Respondent : Shri Mukesh Jain, Sr. DR ORDER Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of the learned Commissioner of Income Tax, Appeals, ADDL/JCIT(A)-9, Mumbai, [in short, the ld. CIT(A)] dated 13/03/2024 for the Assessment Year (AY) 2017-18. The assessee has raised following grounds of appeal: "1. On the facts and in the circumstances of the case as well as in law, the CIT(Appeals), NFAC, New Delhi erred in upholding the order of the ITO, Ward- 2, Bardoli (for the sake of brevity "The AO") passed u/s 144 of the Act, without appreciating the past assessment "records" of the appellant co-op society is purely on misleading, misconceptual, arbitrary and perverse observations and hence, being without jurisdiction, bad in law, invalid, illegal, unwarranted of facts is liable to be quashed. 2. On the facts and in the circumstances of the case as well as in law, both the lower authorities have erred in not allowing deduction u/s 80P of the Act to the extent of Rs. 8,43,700/- and hence, the order passed und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enerating DIN number, against actual PAN of assessee treated the entire receipt as income of assessee and not allowed deduction under Section 80P of the Act eligible for cooperative societies. The ld.CIT(A) also confirmed the action of Assessing Officer without taking any corrective step. The ld. CIT(A) also held that the assessee failed to file return of income as required in the notice under Section 142(1) of the Act dated 20/12/2017. The ld. AR of the assessee submits that on similar set of fact, the Surat Bench in the case of Wanka Vividh Karyakari Seva Sahkari Mandali Ltd. Vs ITO reported viz; (2023) 156 taxmann.com 68 (Surat-Trib) by following the other decision of Bangalore and Nagpur Bench, allowed relief to that assessee. The ld. AR of the assessee submits that copy of decision of Surat Bench is already placed on record while filing this appeal. 3. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue after going through the contents of orders of lower authorities, submits that no return of income was filed by assessee so the Assessing Officer was well within his jurisdiction to disallow the claim under Section 80P of the Act. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in absence of such returned income, why income should not be determined without allowing deduction under section 80P. The assessee filed its reply on 26.08.2011 and explained that the PAN issued by Department is issued under the status of farm and that they have applied for new PAN in favour of Co-operative Society and new PAN was yet to be uploaded in their bank account. The Assessing Officer on the basis of contents of show cause notice, disallowed the deduction under section 80P and treated the same as income of assessee. I find that before Ld. CIT(A) assessee filed similar submission as argued before me. The Ld. CIT(A) confirmed the action of Assessing Office by taking view that claiming deduction under section 80P(2)(a)(i) and 80P(2((d) the assessee failed to file return of income and as per provision of Section 80A(P). The assessee is not eligible for claiming such deduction. The Ld. CIT(A) also held that assessee had optioned to file partition before jurisdictional Commissioner for condonation of delay in filing returned of income. 6. I find that in the present appeal, the dispute is very narrow as to whether the assessee is eligible for deduction under section 80P with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of Chapter VI "A" of the Act and 80P is not one of the section which is mentioned in section 80AC of the Act. Ahe therefore submitted that the deduction under section 80P of the Act cannot be denied to the assessee for non filing of return of income. Learned DR, on the other hand, reiterated the stand of the Revenue as reflected in the order of the CIT(A). 8. I have given a careful consideration to the rival submissions. I agree with the submissions of the learned Counsel for the assessee that section 80A(5) of the Act is applicable only when a return of income is filed by an assessee and a deduction under Chapter VI "A" of the Act, is not claimed in such return of income. It will not apply to a case where no return of income is filed. The provisions of section80AC of the Act as we have already seen, contemplates denial of deduction in respect of certain provisions of Chapter VI "A" of the Act, if a return of income is not filed by an assessee. Those provisions, as rightly contended by the learned Counsel for the assessee, do not apply to the claim for deduction under section 80P of the Act. Therefore, the Revenue authorities were not justified in not entertaining the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the due date specified under sub-section (1) of section 139." 6. On going through the above provision, it is crystallized that the requirement of filing return before the time u/s 139(1) is sine qua non for claiming deduction under the six sections (80-IA or 80-IAB or 80-IB or 80-IC or 80-ID or 80-IE). In other words, if a return is filed belatedly u/s 139(4) or under any other section, claiming deduction under any of the six sections, the writ of the section 80AC will operate to prevent its granting. This section does not deal with granting or non-granting of deduction under any other sections of Part C of Chapter VI-A, including section 80P. Thus, to infer that since section 80AC does not cover section 80P, the latter section is immune from any other statutory requirement, is wholly incorrect. In fact, section 80AC is alien to deduction under any section except the specified six sections. 7. Now, I turn to section 80A(5), which has been pressed into service by the AO for denying the benefit of deduction u/s 80P of the Act, which runs as under: 'Where the assessee fails to make a claim in his return of income for any deduction under section 10A or section 10AA or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roversy revolves around the second condition, which says that the claim should be made in the return of income. The assessee in the extant case did not file any return of income, but made a claim of the deduction in computation of income filed during the course of the assessment proceedings. The moot question is whether the requirement of making a claim in the return of income is a mandatory or a directory requirement. If it is held as mandatory, then the claim must be made in the return of income, failing which the benefit of deduction would be lost. Au contraire, if it is held as directory, then the claim made either in the return of income or in any manner before the conclusion of assessment proceedings, as is the case under consideration, would validate the entitlement. 11. The Hon'ble Supreme Court in CIT v. G.M. Knitting Industries (P.) Ltd. [2016] 71 taxmann.com 35/[2015] 376 ITR 456/279 CTR 534 came across a situation in which the assessee claimed additional depreciation in Form 3AA but the Form was not furnished along with the return of income. Such Form was submitted during the course of assessment proceedings. The AO denied the claim on the ground that the Form 3AA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of deduction u/s 10B was not a directory but a mandatory requirement. It further held that both the conditions of - filing the declaration and filing it before the time limit u/s 139(1) - were mandatory and had to be cumulatively satisfied. Rejecting the reliance on G.M. Knitting Industries (P.) Ltd. (supra), the Hon'ble Supreme Court held that that decision was relevant in the context of deduction provisions and not the exemption provisions as given under Chapter III of the Act. As the Hon'ble Summit Court in Wipro Ltd. (supra) was dealing with section 10B, falling under Chapter III of the Act, it held qua G.M. Knitting Industries (P.) Ltd. (supra) that: 'Therefore, the said decision shall not be applicable to the facts of the case on hand, while considering the exemption provisions. Even otherwise, Chapter III and Chapter VI-A of the Act operate in different realms and principles of Chapter III, which deals with "incomes which do not form a part of total income", cannot be equated with mechanism provided for deductions in Chapter VI-A, which deals with "deductions to be made in computing total income". Therefore, none of the decisions which are relied upon on beh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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