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 Assessment Year 2019-20 due to the late filing of the return. The denial was based on Section 80AC(ii) and the mechanical adjustments allowed under Section 143(1)(a), following the precedent set by the Hon'ble Madras High Court regarding deductions for belated returns. The appeal was dismissed, affirming the denial of the deduction.

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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 return

The 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 returns

The 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 returns

The 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).

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