TaxTMI 
TaxTMI 
2022 (7) TMI 1385
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....in the profit and loss account is to be excluded from the income computation since reserves and provisions created during the year is added back to the profit as per profit and loss account determining the total income in the return submitted. 5. Without prejudice to the above it is submitted that the deduction under Section 80P is on the gross total income and deduction is to be enhanced to the addition made to the income. 6. For the above and other grounds that may be submitted at the time of hearing it is prayed to the Honorable Tribunal to allow the appeal." 2. The brief facts of the case are that the assessee filed the return of income on 14.02.2017 whereas the due date for filing of the return was 17.10.2016, declaring Nil income. The CPC processed the return under Section 143(1)(a) of the Income Tax Act, 1961 (hereinafter "the Act") assessing the total income at Rs.11,36,060/-. The order has been received by the assessee on 13.04.2018 by e-mail. The assessee challenged the order of the AO before the learned CIT(A) stating that such type of addition cannot be made under Section 143(1)(a) of the Act. The CIT(A) decided the appeal against the assessee. The ....
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.... Appellant itself in its written submissions have stated that business income for AY under consideration is Rs.4,21,117/- for which claim u/s 80P has been made and this claim was allowed by the AO. Deduction u/s 80P can only be allowed to the extent of business income only and cannot be allowed on Reserve to remove bad and doubtful debts and Reserve for interest arrears. Even otherwise" Section 80AC has been amended from AY. 2018-19 and deduction u/s 80P can be allowed only if the ITR is filed within the due date. g) In view of the above facts, the action of AO in making addition/adjustment of Rs.11,36,060/- is upheld. Grounds of Appeal Nos. 1 to 3 are dismissed. h) Ground of Appeal No.4 is routine and general in nature and does not require any separate adjudication. 9. As a result, appeal is dismissed." Against the above order the assessee is in appeal before the Tribunal. 3. The learned A.R. reiterated the submissions made before the lower authorities and he also submitted that the assessee can make claim of deduction under Chapter VIA of the Act even after filing the return belatedly as decided by the Hon'ble jurisdictional High Court in the cas....
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....10AA; 80-IA,80-IAB,80IB,80-IC,80ID &80IE if return is filed beyond the due date prescribed by section 139(1). Disallowance of deduction claimed u/s 80P of the Act is not included in the said sub clause. The amended section 80AC also shows that if the appellant fails to file return on time for the previous year relating to 2018-19, then no deduction is admissible under any provisions of chapter VIA. However there is no corresponding amendment in section 143(1)(a). Hence the claim for deduction under section 80P cannot be denied under 143(1)(a) `proceedings. There is nothing in the law that would justify an adjustment on account of claim under section 80P u/s 143(1)(a). The Reserves and provisions created earlier year which was disallowed in the computation of total income in that year reversed and credited to Profit and loss account during the year deducted in the statement of computation during the year should not be added to the total income. It may please be noted that during the year Rs.13,53,853 reserves and provisions created are added back to the profit as per profit and loss account (Please refer schedule 2 statement of computation) in determining the total income. ....
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....rd, firstly we have to decide as to whether the adjustment/disallowance can be made under Section 143(1)(a) or not. We observe that the assessee has filed the return of income belatedly after the due date for filing of return of income and claimed deduction on the entire income earned during the year as per Chapter VIA of the Act. He filed his return of income on 14.02.2017 whereas the due date was 17.10.2016. The return of income filed by the assessee was processed by the Central Processing Center on 16.03.2018 by raising demand of Rs.4,61,720/- by disallowing the claim of deduction under Chapter VIA of Rs.11,36,060/-. We also observe that Section 80AC of the Act has been amended by Finance Act 2018 w.e.f. 01.04.2018 and issue before us is related to AY 2016-17. Considering to the submission of the learned D.R. we observe that similar issue has been decided by the Hon'ble High Court of Madras in the case of AA520 Veerappampalayam Primary Agricultural Cooperative Credit Society Ltd. Vs. Deputy Commissioner of Income-tax reported in (2022) 138 taxmann.co m 571 (Madras). In this case the assessee filed his return of income belatedly and return was processed under Section 143(1)(a) of....
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.... be held as non est in law and invalid for the purpose of deciding exemption under section 80P of the Income Tax Act, 1961? (D) Whether the Tribunal is correct in law or is justified in restricting the provisions for bad and doubtful debt at the 7.5% of the gross total income, on the reason that the assessee is not entitled for the status of rural branch to claim 10% of the aggregate average advances as bad and doubtful debt, under section 36(1)(viia) of the Income Tax Act, 1961? ................... .................. 19. Section 80A(5) provides that where the assessee fails to make a claim in his return of income for any deduction, inter alia, under any provision of Chapter VIA under the heading "C.-Deductions in respect of certain incomes", no deduction shall be allowed to him thereunder. Therefore, in cases where no returns have been filed for a particular assessment year, no deductions shall be allowed. This embargo in section 80A(5) would apply, though section 80P is not included in section 80AC. This is so because, the inhibition against allowing deduction is worded in quite similar terms in sections 80A(5) and 80AC, of which section 80A(5)....
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.... the IT Act. In all such situations, it cannot be treated that a return filed at any stage of such proceedings could be treated as non est in law and invalid for the purpose of deciding exemption under section 80P of the IT Act. We thus answer substantial questions of law B and C formulated and enumerated above. 7. The issue before us is similar to the issue decided by the jurisdictional High Court. Therefore the assessee is eligible to claim deduction under Section 80P of the Act even if he has filed the return of income belatedly. Respectfully following the above judgement we hold that the assessee is eligible for deduction under Section 80P of the Act. 8. Further on perusal of the orders of the lower authorities we observe that the lower authority has disallowed the provisions made by the assessee. During the course of arguments the learned A.R. drew our attention on the financial statements and computation of income filed by the assessee. On perusal of the computation of income the assessee has itself disallowed to the extent of Rs. 13,53,853/- and the details has been given on the bottom side of computation of income which is as under: - Reserve for current years' int....