IN INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Chandra Poojari, AM & Shri George George K, JM ITA No.215/Coch/2019 : Asst.Year 2010-2011 Mannur Service Co- Income Tax Officer operative Bank Limited Vs. (TDS), Thrissur. Mannur P.O. Palakkad 678 642. PAN : AAALT1212B. (Appellant) (Respondent) Appellant by : Sri.Sivadas Chittoor Respondent by : Smt.A.S.Bindhu, Sr.DR Date of Date of Hearing : 26.08.2019 Pronouncement : 04.09.2019 ORDER Per George George K, JM : This appeal at instance of assessee is directed against order of CIT(A) dated 02.01.2019. relevant assessment year is 2010-2011. 2. Though several issues are raised in grounds, only issue that was argued by learned AR was that assessee is entitled to deduction u/s 80P of I.T.Act inspite of assessee having not filed return of income. 3. brief facts of case are as follow: assessee is Co-operative Society registered under Kerala Co-operative Societies Act, 1969. For assessment year 2010-2011, assessee did not file any return of income, inspite of notices issued u/s 148 and u/s 142(1) of I.T.Act. Assessing Officer obtained audit report from Joint Director of Co-operative Societies (Audit) 2 ITA No.215/Coch/2019. M/s.The Mannur SCB Limited. and proposed to complete assessment u/s 144 of I.T.Act. Assessing Officer also proposed to deny deduction u/s 80P of I.T.Act for reason that primary object of assessee was not fulfilled since disbursement of agricultural loans for year under consideration was only minuscule compared to total loan disbursement. assessee during course of assessment proceedings had filed letter stating that it was eligible for deduction u/s 80P of I.T.Act as it was classified as Primary Agricultural Credit Society under Kerala Co-operative Societies Act, 1969. 4. Assessing Officer completed assessment u/s 144 r.w.s. 147 of I.T.Act vide order dated 12.12.2018. In said assessment order, deduction u/s 80P was not granted for reason that assessee did not file any return of income u/s 139(1) or u/s 139(4) nor in response to notices issued u/s 148 and 142(1) of I.T.Act. Assessing Officer concluded that as per section 80A(5) of I.T.Act, assessee is not entitled to any deduction on account of non-filing of return. 5. Aggrieved by order of Assessing Officer denying benefit of deduction u/s 80P of I.T.Act, assessee preferred appeal to first appellate authority. CIT(A) by following judgment of Hon ble Kerala High Court in case of Chirakkal Service Co-operative Bank Ltd. & Others (389 ITR 490) and M/s.Kuthuparamba Range Kalluchethu Vyavasaya Thozhilali Sangham Ltd. (ITA No.273 3 ITA No.215/Coch/2019. M/s.The Mannur SCB Limited. of 2015 dated 20.06.2018), decided issue against assessee. relevant finding of CIT(A) reads as follow:- 9. It is seen that in cases under appeal, no return has every been filed by appellant-assessee either voluntarily under provisions of section 139 or in response to Notice u/s 148 and 142(1) issued by Assessing Officer at any stage. There is no evidence of filing of return by appellant till date. In case cited supra (Chirakkal Service Co- operative Bank Ltd. & Others [(2016) 68 Taxmann.com 298 (Kerala)], Hon ble High Court has decided issue in favour of assessee subject to condition that return of income has been filed even if it is filed belatedly. It is not case of appellant here that return of income making such claim has been filed even belatedly. Since no return has been filed by appellant, it cannot claim benefit of deduction u/s 80P of I.T.Act by relying on decision cited supra. facts of appellant are similar to case cited in para 8 in so far as entitlement of claim u/s 80P for non-filing of return is concerned. 6. Aggrieved by order of CIT(A), assessee has filed this appeal before Tribunal. learned Counsel for assessee has filed elaborate written submission. essence of written submission is that judgment of Hon ble jurisdictional High Court in case of M/s.Kuthuparamba Range Kalluchethu Vyavasaya Thozhilali Sangham Ltd. (supra) is sub silentio since Hon ble High Court did not take notice of amendment to section 80AC of I.T.Act. 7. learned Departmental Representative supported orders of Income-tax authorities. 8. We have heard rival submissions and perused material on record. Hon ble jurisdictional High Court in 4 ITA No.215/Coch/2019. M/s.The Mannur SCB Limited. case of Chirakkal Service Co-operative Bank Ltd. & Others (supra) had considered following question of law:- (B) Whether Tribunal is justified in denying exemption under section 80P of Income-tax Act, 1961, on mere ground of belated filing of return by assessee ? (C) Whether return filed by assessee beyond period stipu lated under section 139(1)/(4) or section 142(1)/148 can be held as non est in law and invalid for purpose of deciding exemption under section 80P of Income-tax Act, 1961 ? 8.1 In adjudicating above grounds, Hon ble High Court has rendered following findings:- 18. Questions B and C relate to denial of exemption on ground referable to belated filing of return, that is to say, returns filed beyond period stipulated under section 139(1) or section 139(4), as case may be, as well as section 142(1) or section 148, as case may be. There are no cases among these appeals where returns were not filed. There are cases where claims have been made along with returns and returns were filed within time. Still further, there are cases where returns were filed belatedly, that is to say, beyond period stipulated under sub-section (1) or (4) of section 139 ; and, there are also returns filed after period with reference to sections 142(1) and 148 of Income-tax Act. 19. Section 80A(5) provides that where assessee fails to make claim in his return of income for any deduction, inter alia, under any provision of Chapter VI-A under heading "C. Deductions in respect of certain incomes", no deduction shall be allowed to him thereunder. Therefore, in cases where no returns have been filed for particular assessment year, no deductions shall be allowed. This embargo in section 80A(5) would apply, though section 80P is not included in section 80AC. This is so because, inhibition against allowing deduction is worded in quite similar terms in sections 80A(5) and 80AC, of which section 80A(5) is provision inserted through Finance Act 33 of 2009 with effect from April 1, 2013, after insertion of section 80AC as per Finance Act of 2006 with effect from April 1, 2006. This clearly evidences legislative intendment that inhibition contained in sub-section (5) of section 80A would operate by itself. In cases where returns have been filed, question of exemptions or deductions referable to section 80P would definitely have to be considered and granted if eligible. 20. Here, questions would arise as to whether belated returns filed beyond period stipulated under section 139(1) or section 139(4) as well as following sections 142(1) and 148 proceedings could be considered for exemption. If those returns are eligible to be accepted in terms of law, going by provisions of statute and governing binding precedents, it goes without saying that claim for exemption will also stand effectuated as claim duly made as part of returns so filed, for due consideration. 5 ITA No.215/Coch/2019. M/s.The Mannur SCB Limited. 21. When notice under section 142(1) is issued, person may furnish return and while doing so, could also make claim for deduction referable to section 80P. Not much different is situation when pre- assessment enquiry is carried forward by issuance of notice under section142(1) or when notice is issued on premise of escaped assessment referable to section 148 of Income-tax Act. This position notwithstanding, when assessment is subjected to first appeal or further appeals under Income-tax Act or all questions germane for concluding assessment would be relevant and claims which may result in modification of returns already filed could also be entertained, particularly when it relates to claims for exemptions. This is so because finality of assessment would not be achieved in all such cases, until termination of all such appellate remedies. Under such circumstances, Tribunal was not justified in denying exemption under section 80P of Income-tax Act on mere ground of belated filing of return by assessee concerned. return filed by assessee beyond period stipulated under section 139(1) or 139(4) or under section 142(1) or section 148 can also be accepted and acted upon provided further proceedings in relation to such assessments are pending in statutory hierarchy of adjudication in terms of provisions of Income-tax Act. In all such situations, it cannot be treated that return filed at any stage of such proceedings could be treated as non est in law and invalid for purpose of deciding exemption under section 80P of Income-tax Act. We thus answer substantial questions of law B and C formulated and enumerated above. (emphasis given by us) 8.2 above judgment of Hon ble High Court had clearly stated in para 19 that when no return of income has been filed, no deduction shall be allowed. Following above said judgment of Hon ble jurisdictional High Court in case Chirakkal Service Co-operative Bank Ltd. & Others (supra), recent judgment of Hon ble Kerala High Court in case of M/s.Kuthuparamba Range Kalluchethu Vyavasaya Thozhilali Sangham Ltd. (supra), had categorically held that filing of return is mandatory for claiming benefit u/s 80P(2) of I.T.Act. Hon ble High Court in case of M/s.Kuthuparamba Range Kalluchethu Vyavasaya Thozhilali Sangham Ltd. (supra) was considering following question of law :- Whether Tribunal was correct in having affirmed orders of lower authorities declining deduction under section 80P for mere reason that no return was filed; when 6 ITA No.215/Coch/2019. M/s.The Mannur SCB Limited. deduction as permissible under section 80A(1) if of total income? 8.3 In adjudicating above question of law, Hon ble High Court held as follows :- Only when return is filed claiming deduction under section 80P, AO will be enabled to first consider question of eligibility of assessee and then consider allowability of deduction from total income. We, hence, answer question of law framed in ITA No.273 of 2015 against assessee and in favour of Revenue. 8.4 In instant case, admittedly, no return of income was filed by assessee u/s 139 or in response to notices issued u/s 148 / 142 of I.T.Act. In cases considered by Hon ble jurisdictional High Court cited supra, it has been clearly held that assessee is entitled to claim deduction u/s 80P of I.T.Act only if return of income has been filed (irrespective whether it is filed belatedly). Since no return of income has been filed by assessee, assessee is not entitled to benefit of deduction u/s 80P of I.T.Act, going by dictum laid down by judgment of Hon ble jurisdictional High Court, cited supra. It is ordered accordingly. 9. In result, appeal filed by assessee is dismissed. Order pronounced on this 04th day of September, 2019. Sd/- Sd/- (Chandra Poojari) (George George K.) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin ; Dated : 04th September, 2019. Devdas* 7 ITA No.215/Coch/2019. M/s.The Mannur SCB Limited. Copy of Order forwarded to : 1. Appellant. 2. Respondent. 3. Pr.CIT, Thrissur. 4. CIT(A) Thrissur. 5. DR, ITAT, Cochin 6. Guard file. BY ORDER, (Asstt. Registrar) ITAT, Cochin Mannur Service Cooperative Bank Limited v. Income-tax Officer (TDS), Thrissur