Section 80P deduction cannot be denied for belated return filing once delay is condoned and eligibility is otherwise satisfied.

A co-operative society's claim for deduction under Section 80P was not to be rejected merely because the return was filed late, where the delay had already been condoned under Section 119(2)(b). The only basis for disallowance was belated filing under Section 139(1); once the defect was regularised, and the assessee was otherwise eligible for the deduction, there was no remaining ground to refuse the claim. The note states that the disallowance was set aside and the deduction was allowed for both assessment years.

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Issues: Whether deduction under Section 80P of the Income-tax Act, 1961 could be denied solely because the return of income was filed belatedly, when the delay in filing the return had been condoned under Section 119(2)(b) of the Income-tax Act, 1961.

Analysis: The reassessment proceedings were initiated on account of cash deposits, but the nature and source of the deposits were accepted by the assessing authority. The only reason for disallowing the claim under Section 80P was the belated filing of the return under Section 139(1). The assessee had, however, obtained condonation of delay from the Chief Commissioner under Section 119(2)(b), and the delay in filing the return stood regularised. Once the procedural defect causing the disallowance ceased to exist, and the assessee was otherwise found eligible for deduction as a co-operative society, there remained no basis to refuse the claim.

Conclusion: Deduction under Section 80P could not be denied on the ground of belated filing after condonation of delay, and the claim was allowable in favour of the assessee.

Final Conclusion: The disallowance of deduction was set aside and the assessee's claim under Section 80P was allowed for both assessment years.

Ratio Decidendi: Where the only impediment to a statutory deduction is the late filing of the return and the delay has been validly condoned under Section 119(2)(b), the deduction cannot be denied on the ground of belated filing alone if the assessee is otherwise eligible.

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