TaxTMI 
TaxTMI 
2025 (7) TMI 1224
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.... However, there were transactions aggregating to Rs. 1,12,75,000/- in the saving bank account of the assessee. 4. Accordingly, a notice under section 148 of the Act was issued as on 24th March 2018 requiring the assessee to file return of income but the assessee failed to file return within the prescribed time limit. Thereafter, a notice under section 142(1) of the Act was issued calling for certain information which also remained unanswered. Hence, the final show cause notice was issued to which the assessee replied along with return of income dated 05th December 2018 disclosing income at NIL after claiming deduction under section 80P(2)(a)(i) of the Act for Rs. 20,65,491/- only. 5. On the verification of details furnished by the assessee, the AO observed that the profit and loss account of the assessee includes interest income from FD with cooperative and other bank at Rs. 23,10,146/- and a sum of Rs. 3,32,481/- respectively. These receipts were included in the profit claimed as deduction under section 80P(2)(a)(i) of the Act. The AO held that interest income from the deposit with bank does not amount profit earned from the business activity of providing credit facility to ....
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....O also made additional addition of Rs. 14,56,187/- on account of provision for interest. Hence, assessed the total income at Rs. 36,51,779/- was assessed. 12. The aggrieved assessee preferred an appeal to the learned CIT(A) against both the assessment orders passed by the AO under section 143(3) r.w.s. 147 of the Act and under section 144 r.w.s. 263 of the Act respectively of the Act. However, the learned CIT(A) rejected both the appeals filed by the assessee vide order dated 1st March 2024. The findings of the learned CIT(A) in both the appeals are identically worded except for the appeal numbers. Thus, we are reproducing the finding of the learned CIT(A) in the appeal number CIT(A), Mangalore/10348/2018-19 which will also be applicable for the other appeal number being NFAC/2012-13/10169899. The relevant finding of the learned CIT(A) extracted as under: "7.7 I have gone through the Assessment Orders, statement of facts. grounds of appeal and submissions filed by the appellant during appellate stage and material facts of the case as on record. The fact is that the appellant had not filed ROI u/s 139 of the Act. Even after the case was reopened u/s 147 of the Act and th....
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....P(2)(d) of the Act for detailed reasons mentioned in the Order. 7.12 As observed by th3 ' 0, since the interest was not earned from credit facilities advanced to members and was not earned from business operations, it had to be taxed under the head income from other sources (Section 56 of the Act). Section 80P(2)(d) of the Act would also not be applicable on this income as the section dealt with income received by way of interest or dividend, derived by the Society from investments with any other Co-operative Society did not banks whereas in the instant case the appellant had derived interest from Bank. Reliance was placed on the decision of the Hon'ble Karnataka High Court in the case of Pr. CIT, Hubbali v. Totagars Co-operative Sale Society (2017) 83 taxmann.com 140 (Karnataka)." XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX "7.22 The interest income earned from deposits with banks could not qualify for deduction u/s 80P(2)(d) of the Act for the express reason that deduction can be claimed under this section only in respect of income by way of interest or dividends earned by a Co-operative society / from its investments with an....
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....amitha vs. ITO in ITA No. 969/Bang/2023. The relevant observation of Hon'ble Kerala High Court is extracted as under: 11. On a consideration of the rival submissions and on a perusal of the statutory provisions, we find that a reading of section 80A(5) and Section 80AC of the IT Act as they stood prior to 1-4-2018, when 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 secti....
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....ncuriam. We also find that the subsequent amendments to section 80AC by the Finance Act 2018 fortifies the view that we have taken for, it makes the claim for deduction under section 80P conditional on filing a return within the due date prescribed under section 139(1) of the IT Act. In other words, the pre-condition for claiming the deduction under section 80P of the IT Act has now been made more stringent by reducing the time available to an assessee for making the claim. 16.1 It is pertinent to deal with the case law relied on by the assessee through the learned AR of the assessee, i.e., M/s Prathamika Krishi Pattina Sahakara Sangha vs. ITO (supra) dated 13th June 2022. In this regard, we note that the coordinate bench of this Tribunal in the said order has followed the judgment of Hon'ble Kerala High Court in the case of Chirakkal Service Co-operative Bank Ltd. v. CIT dated 15th February 2016 reported in [2016] 68 taxmann.com 298/384 ITR 490. However, we find that ratio of laid down in Chirakkal Service Cooperative Bank Ltd (supra) has been reversed in the subsequent judgment of Hon'ble Kerala High Court in case of Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana ....