Audit-linked due date under income tax law saved the return, allowing deduction under section 80P(2)(d).

Where a co-operative society was required to have its accounts audited under the Punjab State Co-operative Societies Act, 1961, Explanation 2(a)(ii) to section 139(1) of the Income-tax Act fixed 31 October as the due date for filing the return. The assessee filed its return on 31-10-2019 after obtaining a special audit report pending the statutory audit, so the return was within time. The earlier disallowance of deduction under section 80P(2)(d) on the ground of delay was therefore unsustainable, and the deduction was allowed.

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Issues: Whether the assessee was entitled to deduction under section 80P(2)(d) despite the return of income being filed on 31-10-2019, and whether the applicable due date was 31-10-2019 in view of the audit requirement under the Punjab State Co-operative Societies Act, 1961.

Analysis: The assessee was required to get its accounts audited under section 48(1-A) of the Punjab State Co-operative Societies Act, 1961. Pending the statutory audit, a special audit report had been obtained before the return was filed. Explanation-2(a)(ii) to section 139(1) of the Income-tax Act, 1961 applies where accounts are required to be audited under the Act or any other law in force, and in such a case the due date is 31st October. Since the return was filed on 31-10-2019, it was within the prescribed due date. The earlier denial of deduction on the premise of delay was therefore unsustainable.

Conclusion: The assessee was entitled to the deduction under section 80P(2)(d), and the disallowance was aside in favour of the assessee.

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