Ambaradi Seva Sahkari Mandali Ltd. & Others

Case snapshot

Sections / provisions: 80P

Questions before the Court / Tribunal

• Section 80P exemption/deduction and effect of belated filing of return by co-operative society.
• What factual, statutory and procedural conditions control the relief?
• How does the operative order apply to the parties and the challenged proceeding?

Material facts and procedural background

Amrutpur Seva Sahakari Mandali Ltd., vs. The ADIT (CPC), Amrutpur, Dhari, Bengaluru. Amreli – 365 660. [PAN – AAGAA 4908 A] (Appellants) (Respondents)

Appellant by : Shri D.M. Rindani, AR Respondent by : Shri B.D. Gupta, Sr. DR & Shri Shramdeep Sinha, CIT(DR)

These four appeals are filed by the assessees against four separate orders dated 20.04.2022, 18.05.2022, 10.06.2022 & 15.06.2022 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Years 2019-20 for all the appeals.

2. The assessees have raised identical grounds in all the appeals and hence grounds raised in ITA No.186/RJT/2022 are being reproduced hereunder:

“1. The Learned Commissioner (Appeals), National Faceless Appeal Centre, Delhi erred in confirming action of CPC Bengaluru by holding that claim made by the Appellant was “Incorrect claim” as per Sec.143(1) of the Act.

Appellant / assessee submissions

Thereafter, the assessee was in receipt of communication under Section 143(1)(a) of the Act from CPC dated 08.12.2020 for proposed adjustment under Section 143(1)(a) of the Act in returned income for not granting deduction of Rs.18,20,276/- claimed in the return of income under Section 80P of the Act stating that of the assessee made incorrect claim under Section 143(1)(a)(ii) of the Act by way of deduction under Section 80P to the returned income is not filed within due date. The assessee filed response in reply to communication under Section 143(1)(c) of the Act by stating that the return of income was filed under Section 139(4) of the Act and provisions of Section 143(1)(a)(b) of the Act do not provide for denial of deduction under Section 80P of the Act. Even when the return of income is not filed within the time limit as per Section 139(1) of the Act and, therefore, denial of deduction under Section 80P vide intimation under Section 143(1) of the Act was not valid in law. The assessee also submitted that the said adjustment could not be called prima facie adjustment. Thereafter, intimation under Section 143(1) of the Act dated 22.12.2020 was received by the assessee thereby…

5. The Ld. AR submitted that the return was not filed as per Section 139(1) of the Act but within the time limit of due date under Section 139(4) of the Act. Therefore, the rejection of return cannot be the criteria. The Ld. AR further submitted that the debatable issue in respect of pima facie adjustment cannot be taken into account by disallowing the claim under Section 80P of the Act which is available to the assessee. The Ld. AR relied upon the decision of Hon’ble Madras High Court in the case of Veerappampalayam Primary Agricultural Co-operative Credit society Limited vs. DCIT and Others (2021) 110 CCH 0219, which was referred by the CIT(A) will not be applicable in the present case as the Hon’ble Kerala High Court in the case of Chirakkal Service Co-operative Bank Limited vs. CIT (2016) 95 CCH 0197 specifically stated that in cases where returns have been filed, the question of exemptions or deductions referable to Section 80P would definitely have to be considered and granted if eligible. The Hon’ble Kerala High Court most specifically observed that the

6. The Ld. DR submitted that the Hon’ble Madras High Court has given a categorical finding that it is Administrative order and the same was properly done by the Assessing Officer as the return was filed beyond the due date of Section 139(1) of the Act. The Ld. DR relied upon the decision of Hon’ble Supreme Court in the case of Prakash Khanna, 135 taxman 327 (SC). The Ld. DR relied upon the order of the CIT(A). The Ld. DR has filed the following submissions:-

Revenue / respondent submissions

The packaged judgment does not separately label the respondent's submissions in an independently extractable passage. No contention is inferred; read the full order.

Court / Tribunal analysis and reasoning

operative Bank Ltd. Vs CIT (68 taxmann.com 298] (copy enclosed) has held that the return filed beyond the period stipulated u/s 139(1) or 139(4) or u/s. 142(1) or section 148 can also be accepted and acted upon for allowing the claim u/s.80P. However, the Hon'ble Court has not considered the decision of the Hon'ble Supreme Court of India in the case of Prakash Nath Khanna Vs. CIT (135 taxmann 327] (copy enclosed) wherein the Hon'ble Supreme Court held that the time within which return is to be furnished is indicated only in sub-section 1 of section 139 and not in sub-section 4 of section 139 and therefore a return filed u/s.139(4) would not dilute the fact that the return was filed after the due date (para 12). Further in a recent decision, the Hon'ble Supreme Court in PCIT Vs. Wipro [140 taxmann.com 223 (SC)] has further held that for claiming benefit u/s. 10B, it was mandatory for the assessee to file the declaration as per the provisions of section 139(1), which is mandatory in nature and a direction as well. The decision of the Hon'ble Kerala High Court is sub-silentio on the ratio of the above decision of the Hon'ble Supreme Court in the case of Prakash Nath Khanna Vs. CIT…

Operative decision and relief

4. Being aggrieved by the intimation under section 143(1) of the Act, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal/not allowed the appeal of the assessee.

7. In the hearing in the above cases on 19.01.2023, the Ld. AR has made written submission in these cases relying upon the decision of the Hon'ble ITAT, Chandigarh in the case of Lanjani Co-operative Agri Service Society Ltd. and others Vs DCIT. The Hon'ble ITAT has allowed the appeal relying on the provision of section 143(1)(a)(v) which was amended by the Finance Act, 2021 which gave jurisdiction to the AO to make prima facie adjustments U/s.143(1)(a) if the return was filed beyond the due date, w.e.f. 01.04.2021 only. The Ld. AR has highlighted the fact that the Hon'ble Tribunal, Chandigarh Bench has clearly distinguished the issue of prima-facie adjustment u/s. 143(1)(a) r.w.s. 80P and 80AC viz-a-viz the decision of the Hon'ble Madras High Court in WP No.7038 of 2020 dated 07.04.2021 in the case of 'Veerappampalayam Primary Agricultural Co-operative Society Ltd. Vs. DCIT' [138 taxmann.com 571], The Hon'ble ITAT Chandigarh has allowed the appeal relying on the provision of section 143(1)(a)(v) which was amended by the Finance Act, 2021 which gave jurisdiction to the AO to make disallowance on the grounds of return being filed beyond the due date whereas the Hon'ble Madras High…

8. In view of the above legal and administrative provisions, the appeals of the assessees may be dismissed as non-maintainable as they can seek remedy U/s.119(2)(b) of the Act, it is emphasized that the authority u/s. 119(2)(b) has not been delegated to appellate authorities.

8. In respect of the decision of Hon’ble Madras High Court, the same will not be applicable in the present case as in the said case whether the assessee therein has filed the return of income beyond the due date of Section 139(4) or not has not been taken into account. Thus, the issue contested by the assessee herein is squarely covered by the Hon’ble Kerala High Court decision and hence appeal being ITA No.186/RJT/2022 is allowed. 9. ITA No.197/RJT/2022, ITA No.204/RJT/2022 & ITA No.203/RJT/2020 are identical in nature and, therefore, the same reasoning will be applicable as given by us hereinabove. Hence, these appeals are also allowed 10. In the result, all the 4 appeals are allowed. Order pronounced in the open Court on this 10th February, 2023

Ratio and legal principle

• The packaged judgment addresses Section 80P exemption/deduction and effect of belated filing of return by co-operative society. The precise proposition must be read with the Court/Tribunal's reasoning and operative directions.
• Reliance depends on matching the statutory version, jurisdiction, procedural stage and material evidence recorded in the judgment.

Why this judgment matters

This decision is relevant to practitioners and affected parties dealing with section 80p exemption/deduction and effect of belated filing of return by co-operative society. Its value lies in showing how the adjudicating forum connected the applicable rule to the proved facts and procedural posture.

Practitioner action points

• Match the statutory version, jurisdiction, procedural stage and decisive evidence before relying on the result.
• Verify current appellate, review and SLP history and any later amendment or controlling authority.
• Attach the complete judgment to the working paper or filing and cite the paragraph/page supporting the proposition.

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Section / provision impact

• 80P - apply the exact version considered in the judgment.

Case network

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Different outcome / possible distinction

• Commissioner of Central Excise and Service Tax , Kanpur Vs AR Polymers Pvt ltd - Quashed / set aside
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Full judgment and source control

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