2023 (6) TMI 264 - AT - Income Tax

Co-op Milk Society denied tax deduction for late return filing: Tribunal decision

The Tribunal upheld the decision that the Assessee, a Co-operative Milk Producers Society, was not entitled to the deduction under Section 80P for the ... Deduction under Section 80P - Part C of Chapter VI-A and Section 80AC(ii) - belated return - intimation under Section 143(1) - mechanical adjustment by CPCDeduction under Section 80P - Part C of Chapter VI-A and Section 80AC(ii) - belated return - intimation under Section 143(1) - mechanical adjustment by CPC - Whether deduction claimed under Section 80P is admissible where the return for AY 2019-20 was filed belatedly and was disallowed by CPC in intimation under Section 143(1). - HELD THAT: - The Tribunal recorded that the assessee admitted filing the return after the due date for AY 2019-20. Section 80AC(ii) (Part C of Chapter VI-A) provides that claims under that Part are admissible only if the return is filed within the time prescribed under section 139(1). The intimation under section 143(1) showed on its face that the return was belated, and the CPC therefore adjusted and disallowed the deduction claimed under section 80P. The Tribunal examined the decisions relied upon and the CIT(A)'s reasoning, noting that the Madras High Court's observations that the date of filing is apparent on the face of the return supports treating such disallowance as a mechanical exercise undertaken under section 143(1). Applying these principles to the admitted facts, the Tribunal held that the claim for deduction under section 80P was not admissible in respect of the belated return for AY 2019-20 and that the CIT(A) was correct in upholding the disallowance. [Paras 7, 8, 9]Deduction under Section 80P denied for AY 2019-20 because the return was belated and thus the claim was not admissible under Section 80AC(ii); the CIT(A)'s upholding of the CPC's adjustment in the intimation under Section 143(1) is affirmed.Final Conclusion: Appeal dismissed; the assessee's claim of deduction under Section 80P for AY 2019-20 is not admissible because the return was filed belatedly in terms of Section 80AC(ii), and the disallowance made in the intimation under Section 143(1) was rightly upheld. Issues Involved:1. Deduction under Section 80P and its denial due to late filing of return.2. Applicability of Section 143(1)(a) for adjustments in belated returns.3. Interpretation of Section 80AC(ii) in the context of belated returns.Summary:Issue 1: Deduction under Section 80P and its denial due to late filing of returnThe Assessee, a Co-operative Milk Producers Society, filed its return of income for the Assessment Year 2019-20 on 05.11.2019, beyond the extended due date of 31.10.2019. The CPC, Bangalore, disallowed the entire deduction claim of Rs. 4,61,664/- under Section 80P in the intimation under Section 143(1) on the ground that the return was filed late. The Assessee appealed to the CIT(A), who dismissed the appeal, citing Section 80AC, which mandates that deductions under Part-C of Chapter VI-A are admissible only if the return is filed within the due date.Issue 2: Applicability of Section 143(1)(a) for adjustments in belated returnsThe Assessee argued that the adjustment made under Section 143(1)(a) was not applicable for A.Y. 2019-20 as the relevant provisions came into effect from 01.04.2021. The CIT(A) and the Tribunal noted that Section 143(1)(a)(ii) allows for mechanical adjustments if the return is belated, and this provision was applicable for the relevant assessment year. The Tribunal upheld the CIT(A)'s decision, stating that the CPC was within its rights to disallow the deduction under Section 80P due to the late filing of the return.Issue 3: Interpretation of Section 80AC(ii) in the context of belated returnsThe Tribunal referred to the decision of the Hon'ble Madras High Court in the case of Veerappampalayam Primary Agricultural Cooperative Credit Society Limited, which clarified that no deduction under Part C of Chapter VIA is admissible for belated returns. The Tribunal found that this decision was directly applicable and supported the denial of the deduction under Section 80P. The Tribunal distinguished other cases cited by the Assessee and concluded that the CIT(A) correctly applied the law.Conclusion:The Tribunal dismissed the appeal, affirming the CIT(A)'s decision that the Assessee was not entitled to the deduction under Section 80P due to the late filing of the return, in accordance with Section 80AC(ii) and the mechanical adjustments permissible under Section 143(1)(a).