Provisions of section 80AC do note apply to section 80P if the return of income is not filed

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Provisions of section 80AC do note apply to section 80P if the return of income is not filed

 

Here is a landmark order wherein it has been held that section 80A(5) was applicable only when a return of income was filed by an assessee and a deduction under chapter VIA was not claimed in such return and it would not apply to a case where no return of income was filed.

One may note that the provisions 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

The case detail is as under:

Prathamika Krishi Pattina, Sahakara Sangha Ltd.

[2022] 142 , 405 (Bangalore – Trib.)

Let us have a short overview of the case:

The issue was with regard to the deduction Under Section 80P read with sections 80A and 80A, of the Income-tax Act, 1961.

It was a claim of deductions by the co-operative societies for the Assessment year 2017-18.

 Assessee, a primarily agricultural cooperative society, had not filed return of income for relevant assessment year

 – Assessing Officer on basis of income and expenditure account, balance sheet and cash book produced by assessee determined business income of assessee at certain amount

 – He further did not entertain claim of assessee for deduction under section 80P and denied benefit of deduction under section 80P for reason that as assessee had not filed return of income making a claim for deduction under section 80P, no deduction shall be allowed as per section 80A(5)

The issue before ITAT was whether section 80A(5) was applicable only when a return of income was filed by an assessee and a deduction under chapter VIA was not claimed in such return of income and it would not apply to a case where no return of income was filed?

ITAT answered it in affirmative. On the issue as to whether, since provisions of sections 80A(5) and 80AC were not applicable in case of assessee, revenue authorities were not justified in not entertaining claim of assessee for deduction under section 80P as made by assessee, ITAT answered it as yes.

Another issue was whether issue of assessee’s eligibility to claim deduction under section 80P was to be remanded to Assessing Officer for examining afresh? ITAT again held it as yes

Conclusion:

  1. Provisions 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.
  2. Sec. 80P deduction can’t be denied to the assessee merely on reason that it didn’t file return of income.

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