While a bench of appeal filed by the assessee the Rajkot bench of Income Tax Appellate Tribunal (ITAT) has held that Denying exemption under section 80P Income Tax Act 1961 merely on ground of belated filing of return is not justifiable.
Section 80P of Income Tax Act 1961, states that if the assessee is a co-operative society and earn income as per sub clause 2 of the section such income shall be deducted as per this section for computing total income of the assessee
The assessee is a Co-operative Society registered under the Mumbai Co-operative Societies Act, 1925 with object and activities of providing credit facilities to its members as well as it provides facilities to members for purchase of agricultural implements, seeds, livestock or other articles intended for agricultural activities.
After filing the return assessee claimed deduction as per section 80P of Income Tax Act 1961.
When the assessee received the information from CPC that proposed adjustment in returned income for not granting deduction in the return of income under Section 80P of Income Tax Act 1961 assessee made incorrect claim of deduction under Section 80P to the returned income is not filed within the due date.
While giving the response assessee states that the return of income was filed under Section 139(4) of the Income Tax Act 1961 and provisions of Section 143(1)(a)(b) of the Income Tax Act 1961 do not provide for denial of deduction under Section 80P of the Income Tax Act 1961. Assessing officer did not accept the contentions and made an assessment order. Against the order assessee filed an appeal before the ITAT.
D.M. Rindani, counsel for the assessee submits that return was not filed as per Section 139(1) of the Income Tax Act 1961, but within the time limit of due date under Section 139(4) of the Income Tax Act 1961. Therefore, the rejection of return cannot be the criteria.
Shramdeep Sinha,counsel for the revenue submits that it is an Administrative order and the same was properly done by the Assessing Officer as the return was filed beyond the due date of Section 139(1) of the Act.
After considering the contentions of the both parties the division bench of the ITAT comprising Suchitra Kamble, (Judicial Member) and Waseem Ahmed, (Accountant Member) allowed the appeal filed by the assessee and observed that, “It is pertinent to note that the assessee though filed return of income not as per Section 139(1) of the Income Tax Act 1961 due date, but prior to due date of Section 139(4) of the Income Tax Act 1961”.
Also in case of Chirakkal Service Co-operative Bank Limited the High Court has observed that denying the exemption under Section 80P of the Income Tax Act 1961 merely on the ground of belated filing of return by the assessee is not justifiable.
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