Extended due date for audited assessees can protect deduction claims when audit disclosures are properly made in the return.

An assessee required to be audited under another law may avail the extended due date under Section 139(1), and a return filed on 31 October can be treated as timely if the audit liability and audit report particulars are properly disclosed. On that basis, deduction under Section 80P(2)(a)(i) cannot be denied merely for alleged late filing. The Tribunal noted that compliance with the relevant disclosure requirements had to be verified from the return and remitted the matter to the Assessing Officer for fresh examination, setting aside the disallowance.

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Issues: Whether the assessee was entitled to deduction under Section 80P(2)(a)(i) when the return was filed on 31.10.2018, having regard to the extended due date applicable to assessees whose accounts are required to be audited under any other law.

Analysis: The return-filing due date under Section 139(1) depends upon the assessee's audit status. Explanation 2(ii) extends the due date to 31st October for an assessee whose accounts are required to be audited under the Income-tax Act or any other law in force. The assessee's society was required to be audited under Section 63 of the Karnataka Co-operative Societies Act, 1959. The Tribunal held that, if the assessee had disclosed the fact of audit liability and the audit report particulars in the return filed on 31.10.2018, the return would be within the extended time limit and the deduction could not be denied merely on the ground of delay. The matter required verification of those factual disclosures by the Assessing Officer.

Conclusion: The assessee was held to be entitled to consideration of the deduction claim on the basis of the extended due date, and the disallowance was set aside for fresh examination by the Assessing Officer.

Ratio Decidendi: Where an assessee is liable to audit under another law and files the return within the extended due date under Section 139(1), deduction under Chapter VI-A cannot be denied solely for alleged late filing if the relevant audit disclosure requirements are satisfied.

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