The Ahmedabad Income Tax Appellate Tribunal (ITAT) allowed the income tax deduction to the co-operative society.
The bench of Suchitra Kamble (Judicial Member) noted that the assessee is entitled for deduction under Section 80P of the Act and the circumstances under which the assessee filed the belated return were beyond the control of the assessee. The Government Auditor has given its report belatedly and, therefore, the filing of the return of income was delayed due to the genuine reasons.
The assessee is a Co-operative Society and filed its return of income on 31.03.2021 wherein the assessee claimed deduction under Section 80P of the Income Tax Act, 1961 of Rs.4,18,340/-. The CPC denied the claim under Section 80P thereby raising demand of Rs.1,61,860/-.
The assessee submitted that the CIT(A) as well as the Assessing Officer denied the deduction claimed by the assessee under Section 80P(2)(b) on the ground of belated filing of the returns. The return of income was filed on 31.03.2021 as against extended due date of 15.02.2021 resulting into delay of about one and half month.
As per return of income, there was gross total income of Rs.4,18,038/- which included dividend of interest of Rs.1,82,675/- and thus the assessee was entitled to deduction under Section 80P in respect of dividend of Rs.1,50,000/-, interest of Rs.1,82,675/- and upto Rs.1,00,000/- under Section 80P(2)(c) of the Act and, therefore, entire income of Rs.4,18,338/- was claimed as exempt and column of income was nil.
While passing the intimation on 27.12.20221, exemption has not been allowed and the amount of Rs.4,18,340/- has been treated as taxable and demand of Rs.1,61,860/- has been determined.
There was reasonable cause for not filing return of income on or before 15.02.2021 as the Auditor appointed furnished return of income on 31.03.2021 and there was pandemic guidelines from the Apex Court which should have been taken into account. The Amendment of mandatory filing of return on the due date will be applicable for A.Y. 2021-22 onwards and not with the present A.Y. 2020-21. The Government Auditor has not given the Audit Report on time and, therefore, the CIT(A) as well as the Assessing Officer was not justified in denying the right to claim of deduction under Section 80P of the Act to the assessee.
The departmnet submitted that there were two extensions granted during that period and despite those two extensions, the assessee has filed the same belatedly by more than a month.
The tribunal held that the mandate of filing the return of income on due date will be applicable from A.Y. 2021-22 appears to be correct. Hence, the Assessing Officer as well as the CIT(A) was not right in disallowing the claim of deduction under Section 80P of the Act to the assessee only on the ground of delay in filing the return.
Case Title: Uttam Dairy Staff Co-operative Credit & Supply Society Limited V/s AO
Citation: ITA No.454/Ahd/2023