TaxTMI 
TaxTMI 
2024 (9) TMI 1823
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....around one and half year. Ld. AR for assessee submitted that the assessee has filed a condonation application supported by an affidavit of the President of assessee-society in this regard. Referring to contents of these documents, Ld. AR submitted that the assessee is a registered co-operative society of employees of local body (municipal corporation, Ujjain). The registered email id in the profile of assessee in income-tax portal was of previous accountant who resigned from society and the order of CIT(A), if any served upon such registered email, never came to the knowledge of assessee. It is only when the assessee contacted its authorized representative on 01.02.2024 that the income-tax portal was checked and the assessee came to know that the impugned order had already been passed by CIT(A). After being aware, the assessee arranged to pay appeal fee and file present appeal on 12.03.2024 without further delay. Ld. AR submitted that there was no physical service of impugned order upon assessee. Ld. AR very humbly submitted that the assessee is a society of employees of local body and there is no deliberate lethargy, negligence, mala fide intention or ulterior motive of assessee i....
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....efore the deduction was not allowable by virtue of restrictive provision of section 80AC. Aggrieved, the assessee carried matter in first-appeal but did not get any success. Now, the assessee has come in next appeal before us challenging the orders of lower-authorities. 4. The precise and short issue before us is whether or not the disallowance made by AO and upheld by CIT(A) by rejecting assessee's claim of deduction of Rs. 5,52,757/- u/s 80P was in order? Basically, the case relates to AY 2019-20 and the due date for filing of return u/s 139(1) was 31.08.2019 but the assessee filed return belatedly u/s 139(4) on 30.09.2020. Therefore, the AO made impugned disallowance while processing assessee's return u/s 143(1) on the strength of section 80AC. 5. Ld. Representatives of both sides made their respective contentions against and for the action of lower-authorities. We have heard them at length and considered the facts of case in the light of relevant provisions of law and the judicial rulings quoted before us. 6. We first refer section 80AC, which is the basis of impugned disallowance, as applicable to relevant AY 2019-10 reading as under: "80AC - Deduction not to....
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....rd. In the instant facts, admittedly the assessee did not file return of income within the time permissible under section 139(1) of the Act. However, the assessee filed its return of income belatedly on 28-11-2020 and claimed deduction of 5,58,494/- under section 80P of the Act. The issue for consideration before us is that whether once the return of income is filed beyond the prescribed date under section 139(1) of the Act, can the deduction under section 80P of the Act be denied to the assessee, by way of adjustment under section 143(1) of the Act. On going through the statutory provisions, we observe that 80AC of the Act provides that no such deduction under section 80P of the Act shall be allowed to an assessee unless he furnishes a return of his income on or before the due date specified under section 139(1) w.e.f. assessment year 2018-19 onwards. However, section 143(1)(a)(v) of the Act provides that disallowance of deduction claimed under any of the provisions of Chapter VI-A under the heading "C.- Deductions in respect of certain incomes" (which includes deduction under section 80P of the Act), can be made if the return is furnished beyond the due date specified under sub-s....
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....ny information in the return). In our view, the scope of the adjustments that can be made under the said provision has been elaborated in the Explanation to the aforesaid section, which does not include denial of deduction claimed by the assessee in case the assessee does not furnish its return of income within the date stipulated under section 139(1) of the Act. The Explanation to the said section specifically provides for cases/instances when the claim made by the assessee could be said to be "incorrect". Therefore, in our considered view, the case of the assessee would also not fall within the purview of prima facie adjustment under section 143(1)(a)(ii) (an incorrect claim, if such incorrect claim is apparent from any information in the return)." 9. Thus, the case of assessee is squarely covered by order of ITAT, Rajkot. Respectfully following the same, we too hold that the impugned disallowance made by AO in intimation u/s 143(1) for AY 2019-20 on the basis that return was not filed upto due date u/s 139(1), is not tenable. Accordingly, we direct the AO to allow deduction. The asessee's appeal is allowed. 10. Resultantly, this appeal is allowed. Order pronounced in op....