2020 (10) TMI 1010 - AT - Income Tax

Tribunal grants deductions under Section 80P for Co-op Society aiding farmers

Indur Intideepam MACS Federation Limited, Nizamabad. Versus Income Tax Officer, Ward-2, Nizamabad.

The Tribunal overturned the decisions of the Ld. AO and Ld. CIT (A) and directed the Ld. AO to grant deductions U/s. 80P for the relevant assessment years ... Deduction claimed u/s. 80P invoking his powers u/s. 154 - deduction in the return of income which the assessee had complied while responding to notice issued u/s. 148 - HELD THAT:- Section 80A(5) does not stipulate that the return of income should be filed within the due date prescribed u/s.139(1) & (4) of the Act. No other provisions of the Act which bars the claim of deduction u/s. 80P of the Act if the return of income is not filed within the due date as provided u/s. 139(1) & (4). DR also could not successfully controvert to the submission of the ld. AR. Therefore, we do not find any merit in the order passed by the Ld. AO invoking his powers U/s. 154 of the Act, withdrawing the claim of deduction U/s. 80P of the Act in the case of the assessee for both the AYs. Since the ld. CIT (A) has also agreed with the same view of the ld. AO, his orders are also devoid of merits. For the aforestated reasons, we hereby set aside the orders of the Ld. CIT (A) and direct the ld. AO to grant deduction u/s. 80P of the Act to the assessee for both the AYs. Accordingly, both the appeals of the assessee are held in its favour. Issues:- Erroneous order by Ld. CIT (A)- Disallowance of deductions by Ld. AO- Interpretation of Section 80A(5) of the IT Act- Compliance with provisions of deduction U/s. 80P- Validity of invoking powers U/s. 154 of the IT ActAnalysis:1. The appeals were filed against the orders of Ld. CIT (A) for AYs 2006-07 and 2008-09. The assessee raised five grounds challenging the orders, including errors in fact and law, disallowance of deductions, and failure to consider the allowance of deduction U/s. 80P.2. The case involved a Co-operative Society providing small scale loans to farmers. The assessments were completed by Ld. AO under sections 143(3) and 147 of the Act. Ld. AO withdrew the deduction U/s. 80P due to the assessee's failure to file returns within the specified time, invoking powers U/s. 154 of the Act.3. Ld. CIT (A) upheld Ld. AO's decision citing non-filing of returns within the specified time limits and potential penal consequences. The main contention was the withdrawal of deduction U/s. 80P based on the delayed filing of returns by the assessee.4. The crux of the issue was the correctness of withdrawing the deduction claimed under Section 80P by the assessee. The Ld. CIT (A) confirmed Ld. AO's decision, leading to the appeal challenging the withdrawal of deductions invoking powers under Section 154 of the Act.5. The argument centered on the assessee's compliance with Section 80A(5) by filing returns in response to notices under Section 148 and claiming deductions U/s. 80P. The Ld. AR contended that there was no provision barring the deduction claim based on delayed filing.6. After considering arguments, the Tribunal found merit in the assessee's position. Compliance with Section 80A(5) was established by filing returns in response to notices. The Tribunal held that there was no provision precluding deduction claims under Section 80P due to delayed filing, overturning Ld. AO and Ld. CIT (A) decisions.7. Consequently, the Tribunal set aside Ld. CIT (A)'s orders and directed Ld. AO to grant deductions U/s. 80P for both AYs in favor of the assessee, allowing the appeals. The decision was pronounced on 28th September 2020.