TMI Blog2023 (10) TMI 1378X X X X Extracts X X X X X X X X Extracts X X X X ..... d Sahakari Pat Sanstha Maryadit [ 2022 (10) TMI 348 - ITAT NAGPUR] also held that making of claim in return of income u/s 80A(5) is directory and the authorities below were not justified in rejecting the claim of assessee u/s 80P. Thus keeping in view that the nature of deduction and quantum was not disputed by AO, so direct the AO to allow deduction u/s 80P(2)(a)(i) and 80P(2)(d) as the case may be. Appeal of the assessee is allowed for statistical purposes. - SHRI PAWAN SINGH, JUDICIAL MEMBER For the Assessee : Shri Akshay Modi, CA For the Revenue : Shri Vinod Kumar, Sr-DR Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as Ld. NFAC/Ld.CIT(A) ] dated 15.05.2023 for assessment year 2017-18, which in turn arises from the addition made by the Income Tax Officer, Ward-2 Bardoli /Assessing Officer in assessment order passed under section 144 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) dated 06.12.2019. The assessee has raised the following ground of appeal:- 1. On the facts and in the circumstances of the case as well in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1009K and such PAN was issued by Department by treating the assessee as firm , in fact, the assessee is not a firm rather the assessee is a co-operative society. Since assessee is managed by agriculturist and due to lack of awareness about the law, new PAN was not obtained. When such fact came to assessee s notice assessee immediately applied for creation of PAN and new PAN: AAQAS3479N was allotted. Such fact was explained before Assessing Officer by filing an affidavit of Secretary, namely Mr. Tukaram Sambhubhai Patel of assessee, along with affidavit, the assessee also filed copy of application for cancellation of its old PAN, copy of such application and affidavit of Secretary are placed on record. Since notice under section 142(1) was issued against old PAN in the status of partnership firm , the ITBA portal of Department was not accepting its return of income as co-operative society . Thus assessee was unable to file its return of income and such fact was explained before Assessing Officer. However, before Assessing Officer, the assessee furnished profit and loss account, balance-sheet and computation of total income along with written submission dated 30.11.2019. In the compu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue to examine and verify the contention of assessee, instead of cancellation of old PAN. The Ld. AR for the assessee further submits that Bangalore Tribunal in the case of Prathamika Krishi Pattina, Sahakara Sangha Ltd. (supra) also held that provision of Section 80AC, which contemplates denial of deduction in respect of certain provisions of Chapter VI A of Act, if a return of income is not filed by an assessee, do not apply to claim for deduction under section 80P. Similarly, in case of Krushi Vibhag Karmachari Vrund Sahakari Pat Sanstha Maryadit Vs ITO (2023) 147 taxmann.com 449 (Nagpur-Trib.) also held that requirement of making a claim in the return of income under section 80A(5) is directly in nature and therefore lower authorities were not justified in rejecting assessee s claim of deduction under section 80P on the ground such claim was not made in a return but during the course of assessment proceedings. The Ld. AR for the assessee finally submits that claim of assessee under section 80P was not disputed and it was denial only on the ground that return of income was not filed. Thus, on the basis of aforesaid submissions, the assessee is eligible for full deduction under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s yet to be uploaded in their bank account. The Assessing Officer on the basis of contents of show cause notice, disallowed the deduction under section 80P and treated the same as income of assessee. I find that before Ld. CIT(A) assessee filed similar submission as argued before me. The Ld. CIT(A) confirmed the action of Assessing Office by taking view that claiming deduction under section 80P(2)(a)(i) and 80P(2((d) the assessee failed to file return of income and as per provision of Section 80A(P). The assessee is not eligible for claiming such deduction. The Ld. CIT(A) also held that assessee had optioned to file partition before jurisdictional Commissioner for condonation of delay in filing returned of income. 6. I find that in the present appeal, the dispute is very narrow as to whether the assessee is eligible for deduction under section 80P without filing returned of income. First I deal with the objection of ld Sr DR that in assessing officer has no power to entertain the claim, if not made in the return of income. I find that there is no dispute regarding such restrictions of power of assessing officer, however, being Appellate Authority, such claim of assessee which is em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CIT(A). 8. I have given a careful consideration to the rival submissions. I agree with the submissions of the learned Counsel for the assessee that section 80A(5) of the Act is applicable only when a return of income is filed by an assessee and a deduction under Chapter VI A of the Act, is not claimed in such return of income. It will not apply to a case where no return of income is filed. The provisions of section80AC of the Act as we have already seen, contemplates denial of deduction in respect of certain provisions of Chapter VI A of the Act, if a return of income is not filed by an assessee. Those provisions, as rightly contended by the learned Counsel for the assessee, do not apply to the claim for deduction under section 80P of the Act. Therefore, the Revenue authorities were not justified in not entertaining the claim of the assessee for deduction under section 80P of the Act as made by the assessee. Since neither the AO nor the CIT(A) have examined the other conditions for allowing deduction under section 80P of the Act, I deem it fit and proper to remand the issue of the assessee s eligibility to claim deduction under section 80P of the Act, in the sense with rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or under any other section, claiming deduction under any of the six sections, the writ of the section 80AC will operate to prevent its granting. This section does not deal with granting or non-granting of deduction under any other sections of Part C of Chapter VI-A, including section 80P. Thus, to infer that since section 80AC does not cover section 80P, the latter section is immune from any other statutory requirement, is wholly incorrect. In fact, section 80AC is alien to deduction under any section except the specified six sections. 7. Now, I turn to section 80A(5), which has been pressed into service by the AO for denying the benefit of deduction u/s 80P of the Act, which runs as under: 'Where the assessee fails to make a claim in his return of income for any deduction under section 10A or section 10AA or section 10B or section 10BA or under any provision of this Chapter under the heading C. Deductions in respect of certain incomes , no deduction shall be allowed to him thereunder.' 8. This section provides that where an assessee fails to make a claim in his return of income for any deduction, amongst others, the sections enshrined in Part C to Chapter VI-A (including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mandatory or a directory requirement. If it is held as mandatory, then the claim must be made in the return of income, failing which the benefit of deduction would be lost. Au contraire, if it is held as directory, then the claim made either in the return of income or in any manner before the conclusion of assessment proceedings, as is the case under consideration, would validate the entitlement. 11. The Hon'ble Supreme Court in CIT v. G.M. Knitting Industries (P.) Ltd. [2016] 71 taxmann.com 35/[2015] 376 ITR 456/279 CTR 534 came across a situation in which the assessee claimed additional depreciation in Form 3AA but the Form was not furnished along with the return of income. Such Form was submitted during the course of assessment proceedings. The AO denied the claim on the ground that the Form 3AA was required to be statutorily filed along with the return of income. The view of the AO was reversed by the Tribunal as well as the Hon'ble High Court by holding that even if the Form was filed during the course of assessment proceedings, it amounted to sufficient compliance. The Hon'ble Supreme Court, taking note of the judgment in CIT v. Shivanand Electronics [1994] 75 Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... context of deduction provisions and not the exemption provisions as given under Chapter III of the Act. As the Hon'ble Summit Court in Wipro Ltd. (supra) was dealing with section 10B, falling under Chapter III of the Act, it held qua G.M. Knitting Industries (P.) Ltd. (supra) that: 'Therefore, the said decision shall not be applicable to the facts of the case on hand, while considering the exemption provisions. Even otherwise, Chapter III and Chapter VI-A of the Act operate in different realms and principles of Chapter III, which deals with incomes which do not form a part of total income , cannot be equated with mechanism provided for deductions in Chapter VI-A, which deals with deductions to be made in computing total income . Therefore, none of the decisions which are relied upon on behalf of the assessee on interpretation of Chapter VI-A shall be applicable while considering the claim under section 10B (8) of the IT Act.' 13. Ongoing through the judgments in G. M. Knitting Industries (P.) Ltd. (supra) in juxtaposition to Wipro Ltd. (supra), the principle which emerges is that the fulfilment of requirement of making a claim for exemption under the relevant sections ..... X X X X Extracts X X X X X X X X Extracts X X X X
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