ITAT allows Credit Co-op Society's appeal, grants deduction under Section 80P for A.Y. 2018-19

The ITAT allowed the appeal of a Credit Co-operative Society, setting aside the CIT(Appeals) decision to disallow a deduction of Rs.16,40,116 under Section 80P of the Income Tax Act for A.Y. 2018-19. The ITAT held that the CPC exceeded its jurisdiction by disallowing the deduction due to belated filing, as the relevant amendment requiring timely filing was not in effect at the time of the return filing. Consequently, the disallowance was deemed unjustified, leading to the allowance of the assessee's appeal.

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Issues:
1. Disallowance of deduction u/s.80P of the Income Tax Act, 1961 due to belated filing of return of income.

Analysis:
1. The controversy in the appeal revolves around the disallowance of the assessee's claim for deduction of Rs.16,40,116/- u/s.80P of the Act because the return of income was filed beyond the due date specified under Sec. 139(1) of the Act.

2. The assessee, a Credit Co-operative Society, filed its return for A.Y. 2018-19 on 30.03.2019, declaring Nil income after claiming deduction u/s.80P. However, the Centralized Processing Center (CPC) disallowed the deduction in an intimation issued under Sec. 143(1) on 25.06.2019 due to the belated filing of the return.

3. The CIT(Appeals) upheld the disallowance, citing the mandatory nature of filing the return before the due date under Sec. 139(1). The appellant's argument for the delay was dismissed based on legal provisions.

4. The ITAT observed that the amendment to Section 80AC of the Act, effective from 01.04.2018, required timely filing for deduction under Chapter VIA. However, the corresponding amendment in Section 143(1)(a) was only introduced in the Finance Act, 2021, effective from 01.04.2021.

5. The ITAT concluded that the CPC exceeded its jurisdiction by disallowing the deduction u/s.80P in the intimation dated 25.06.2019 for A.Y. 2018-19. As the relevant amendment was not in place at that time, the disallowance was deemed unjustified, leading to the allowance of the assessee's appeal.

6. The ITAT set aside the CIT(Appeals) order and vacated the disallowance of the deduction u/s.80P of Rs.16,40,116/- made by the Assessing Officer, ultimately allowing the appeal of the assessee based on the legal analysis and jurisdictional issues.

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