2024 (9) TMI 203

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..../s. 147 r.w.s. 144B of the Income-tax Act 1961 for assessment year 2019-20. Since both these appeals raises similar issues, they were heard together and are disposed off by this common order. 2. The grounds of appeals raised by assessee in Memo of Appeal filed with the Income Tax Appellate Tribunal, Ahmedabad Bench, Ahmedabad for assessment year: 2018-19, & 2019-20 reads as under:- ITA No. 884/Ahd/2024 A.Y. 2018-19 "1. The Assessment Unit, Income Tax Department erred in issuing an assessment order at NIL and falling to allow deduction u/s 80P in the computation sheet." 2. The Assessment Unit, Income Tax Department erred in issuing a notice of demand of Rs. 2,58,357/- when the assessment order has been passed at Nil variation." ITA No. 885/Ahd/2024 A.Y. 2019-20 "1. The Assessment Unit, Income Tax Department erred disallowing deduction u/s 80P to the tune of Rs. 3,99,833/-" 3. First, we will take up assessee appeal for assessment year 2018-19. From the NMS information, the Assessing Officer observed that the assessee has deposited cash of Rs. 5,31,61,730/- and has time deposit of Rs. 21,81,997/. The Assessing Officer observed that assessee has not filed return of income f....

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....n the latter provision was amended by Finance Act 2018, would reveal that the statutory scheme under the IT Act was to admit only such claims for deduction under Section 80P of the IT Act as were made by the assessee in a return of income filed by him. That return can be under Sections 139(1), 139(4), 142(1) or Section 148 and to be valid, had to be filed within the due date contemplated under those provisions. Under Section 80A(5), the claim for deduction under Section 80P could be made by an assessee in a return filed within the time prescribed for filing such returns under any of the above provisions. The amendment to Section 80AC with effect from 1.4.2018, however mandated that for an assessee to get a deduction under Section 80P of the IT Act, he had to furnish a return of his income for such assessment year on or before the due date specified in Section 139(1) of the IT Act In other words, after 1.4.2018, even if the assessee makes his claim for deduction under Section 80P in a return filed within time under Sections 139(4), 142(1) or Section 148, he will not be allowed the deduction, unless the return in question was filed within the due date prescribed under Section 139(1).....

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....e assessee relied upon the judgment and order dated 15th February, 2016 of Hon'ble Kerala High Court in the case of The Chirakkal Service Co-operative Bank Ltd. vs. v. CIT vide ITA No. 212 of 2013,, wherein Hon'ble Kerala High Court has allowed the deduction even in the case of belated return of income, by holding as under:- "20. Here, questions would arise as belated returns filed beyond to the whether period stipulated under section 139(1) or section 139(4) as well as following sections 142 (1) and 148 proceedings could be considered for exemption. If those returns are eligible to be accepted in terms of law, going by the provisions of the statute and the governing binding precedents, it goes without saying that the claim for exemption will also stand effectuated as a claim duly made as part of the returns so filed, for due consideration." 5.2 The ld. counsel has also relied upon the decision of ITAT, Rajkot Bench in the case of Lunidhar Seva Sahkari Mandali Ltd. v. The Assessing Officer, in ITA No. 202/Rjt/2022 has decided the issue vide order dated 22.02.2023, by holding as under:- "We note that the instant case, there was a delay in filing the return of income by the asse....

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....u/s 156 were part of the reassessment order, as could be seen from the assessment order at para 6 of the reassessment order:- "6. Assessed u/s 147 read with section 144B of the Income Tax Act, 1961. Computation of income and demand notice u/s 156 of the Act is attached." It is an admitted fact that the assessee never filed its return of income u/s 139(1) of the 1961 Act, and the only return of income filed by the assessee was return of income filed in pursuance to notice issued by the AO u/s 148 of the 1961 Act. The assessee never claimed deduction u/s 80P in the return of income to be filed u/s 139(1) as the assessee never filed such return of income. It is equally true that computation of income and notice of demand u/s 156 are part of the assessment order, and the AO has not expressly stated in the body of the assessment as to disallowing of the deduction u/s 80P, but the claim of assessee for deduction u/s 80P in the return of income filed in pursuance to notice issued by the AO u/s 148 was ex-facie incorrect claim filed by the assessee keeping in view substituted provision 80AC which was substituted by Finance Act, 2018 w.e.f. 01.04.2018, as the said return of income filed ....

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....on 80AC w.r.t. deduction falling under Chapter-VIA under the heading "C-Deductions in respect of certain incomes", it is mandatory that return of income is to be filed on or before the due date prescribed u/s 139(1). Deduction u/s 80P falls within Chapter VIA-C, and is covered by 80AC(ii). The assessee did not filed return of income on or before the due date as prescribed u/s 139(1), and it is only in the return of income filed in pursuance to notice u/s 148 which is filed beyond the due date prescribed u/s 139(1), the assessee filed said claim of deduction u/s 80P, which clearly is not admissible keeping in view substituted provisions of Section 80AC effective from assessment year 2018-19. The language of amended section 80AC is plain, clear and unambiguous, and literal reading of Section 80AC make it very clear that claim of deduction u/s 80P is admissible only when the claim of deduction u/s 80P is made in the return of income filed on or before the due date prescribed u/s 139(1). Our above view is strengthened by the order of Hon'ble Madras High Court in the case of Veerappampalayan Primary Agricultural Co-operative Credit Society in W.P. No. 7038 of 2020, order dated 07.04.202....