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TMI Blog2025 (4) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... s not filed the income-tax returns for the A.Yrs. 2015-16 and 2016-17. Based on the information available with the Assessing Officer that the assessee society deposited cash to the tune of Rs. 1.37 crore and Rs. 74.13 lakh respectively, statutory notices u/s.148/143(2) and 142(1) were issued to which the assessee made partial compliance. Pursuant to the filing of returns by the assessee society in response to notice u/s.148 and based on the details furnished by the assessee, the Assessing Officer culminated the proceedings disallowing the deduction claimed by the assessee u/s.80P of the Act at Rs. 16,72,077/- and Rs. 18,01,924/- respectively for the assessment years under consideration. 4. Aggrieved assessee preferred appeals but failed to get any relief. Now the assessee is in appeal before the Tribunal raising the following common grounds : "On facts and in law, without prejudice to each other : 1. The Ld. AO erred in (CIT-A erred in confirming) making the disallowance of claim of Rs. 16,72,077/- u/s 80P(2)(a) (i)/ 80(2)(d) of the IT Act. 2. The L.d. CIT(A) ought to have appreciated the fact that claim u/s 80P(2)(a)(i) was claimed by filing return of income in response t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -ID or section 80-IE], no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.]" 9. Perusal of section 80AC of the Act shows that there is no mention about section 80P of the Act. Subsequently, after the amendment brought in w.e.f. 01.04.2018 the amended section 80AC reads as under : "Deduction not to be allowed unless return furnished. 80AC. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after- (i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE; (ii) the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading "C.-Deductions in respect of certain incomes", no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139." 10. From perusal of the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction 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 section 10B or section 10BA or under any provision of this Chapter under the heading "C.-Deductions in respect of certain incomes", no deduction shall be allowed to him thereunder.' 8. This section provides that where an as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 vs. G.M. Knitting Industries (P.) Ltd. (2015) 376 ITR 456 (SC) 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 was required to be statutorily filed along with the return of income. The view of the AO was reversed by the Tribunal as well as the Hon'ble High Court by holding that even if the Form was filed during the course of assessment proceedings, it amounted to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt 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 Limited (supra) was dealing with section 10B, falling under Chapter III of the Act, it held qua G.M. Knitting Industries (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 behalf of the assessee on interpretation of Chapter VI-A shall be applicable while considering the claim under Section 10B (8) of the IT Act.' 13. On going through the judgments in G.M. Knitting Industries (supra) in juxtaposition to Wipro Limited (supra), the principle which emerges is that the fulfillment of requirement of making a claim for exemption un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest income is concerned, my attention was drawn to pages 10 and 36 of the paper book where the assessee has provided the details of interest income. In both these sheets, I notice that the assessee has provided the details of interest income of Rs. 57,05,656/- and Rs. 64,95,412/- for the A.Yrs. 2015-16 and 2016-17 respectively. These details also contain the detail of interest received from the members, penal interest on loan given to members, interest on Fixed Deposit and bank balance held with Cooperative Banks - PDCC (claimed to be a Cooperative Bank), Sharad Sahakari Bank, Bank of Baroda and HDFC Insurance Scheme. The ld. Authorized Representative was fair enough to accept that the interest received from Scheduled Bank and from HDFC Insurance Scheme is not eligible for deduction u/s.80P of the Act. So far as the interest income received from Cooperative Banks, he referred to the catena of decisions of this Tribunal wherein in the interest received from Cooperative Banks have been held to be eligible for deduction u/s.80P of the Act. 15. With the above discussion, observations and considering the submissions of Ld. Counsel for the assessee, I deem it fit to restore the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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