Tribunal Upholds Deduction Claim for Rs. 19,33,650; Section 80AC Filing Rule Not Applied for Assessment Year 2017-18.

The Tribunal allowed the assessee's appeal, granting the deduction claim of Rs. 19,33,650/- under section 80P(2)(a)(i) for the assessment year 2017-18. It determined that the amended provision under section 80AC, mandating timely return filing, was not applicable for this assessment year. The Tribunal emphasized substantial justice by condoning the filing delay and relied on a Supreme Court precedent to accept the deduction claim. The order was pronounced on 16.04.2024.

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Issues involved: Appeal against assessment u/s. 144 of the Income Tax Act, 1961 for the assessment year 2017-18 involving deduction u/s. 80P(2)(a)(i).

Assessee's Grounds:
1. Whether the addition made u/s. 80P(2)(a)(i) of Rs. 19,33,650/- was justified.
2. Request for the liberty to add or alter any other ground.

Assessee's Substantive Grievance:
The assessee sought to claim a deduction u/s. 80P(2)(a)(i) of Rs. 19,33,650/-. The Revenue contended that the deduction was not eligible due to the late filing of the return. The Revenue argued that filing a return u/s. 139(1) is a prerequisite for claiming the deduction. However, the CIT(A) confirmed that the return was filed belatedly in response to the notice u/s. 142(1). The Tribunal noted that the amended provision u/s. 80AC, which requires filing the return within the due date, was effective from 01.04.2018, while the assessment year in question was 2017-2018. Referring to a Supreme Court case, the Tribunal rejected the Revenue's argument based on a strict interpretation.

The Revenue's Arguments:
1. The Revenue contended that the assessee did not make the claim in the belated return.
2. The CIT(A) rejected the claim, but the assessee had indeed raised the claim in the return filed on 11.12.2019. The Tribunal held that u/s. 80AC was not applicable, and relying on sec. 80A(5), rejected the Revenue's argument.

Regarding Interest Income:
The Revenue argued that the assessee derived interest income from both nominal and regular members. Citing a recent Supreme Court decision, the Tribunal accepted the assessee's deduction claim u/s. 80P(2)(a)(i) based on the precedent set by the apex court.

Conclusion:
The Tribunal allowed the assessee's appeal, accepting the deduction claim u/s. 80P(2)(a)(i) of Rs. 19,33,650/-. The delay in filing was condoned, emphasizing substantial justice. The order was pronounced on 16.04.2024.

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