SRI KALABHAIRAVESHWARA MULTI CO-OPERATIVE SOCIETY LTD. v. THE COMMISSIONER OF INCOME TAX (APPEALS), TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE, D

CORAM: HON'BLE MR. JUSTICE S.G.PANDIT HON'BLE MR. JUSTICE K. V. ARAVIND ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE K.V. ARAVIND) Heard Sri Mahesh R. Uppin, learned counsel for the appellant.

2. This appeal under Section 260A of the Income Tax Act, 19611, is filed by the assessee, calling in question the order passed in ITA No.1344/Bang/2024 dated 17.10.2024, relating to the Assessment Year 2018–19.

2.1 The assessee is a Co-operative Society. It is not in dispute that the assessee failed to file its return of income for the Assessment Year 2018–19 within the time prescribed. The Assessing Officer, based on information relating to cash deposits amounting to ₹1,09,68,097/- in Chikkamagalur District Central Co-operative Bank Ltd., issued notice under Section 148 of the Act. 1 the Act - 3 - NC: 2026:KHC:332-DB ITA No. 57 of 2025 HC-KAR

2.2 In response to the notice issued under Section 148 of the Act, the assessee filed its return of income on

25.04.2022, admitting ‘Nil’ income and claiming deduction under Section 80P of the Act. The Assessing Officer disallowed the said deduction and raised a demand of ₹9,72,911/- towards tax.

2.3 Aggrieved thereby, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals)2. The CIT(A), having regard to the provisions of Section 80AC of the Act, held that since the assessee had not filed its return of income within the due date prescribed under Section 139(1) of the Act, it was not entitled to claim deduction under Section 80P of the Act. Accordingly, the appeal came to be dismissed by order dated 16.05.2024.

2.4 The assessee, being further aggrieved, preferred an appeal before the Income Tax Appellate Tribunal3. The Tribunal, by the impugned order dated 17.10.2024, following the judgment of the Kerala High Court in Nileshwar Range Kallu 2 CIT(A) 3 Tribunal - 4 - NC: 2026:KHC:332-DB ITA No. 57 of 2025 HC-KAR Chethu Vyavasaya Thozhilali Sahakarana Sangham v. CIT4, held that the assessee is not entitled to deduction under Section 80P of the Act, in view of the mandatory requirement under Section 80AC of the Act to file the return of income within the due date prescribed under Section 139(1) of the Act.

3. The assessee has raised the following substantial questions of law; "1. In the facts and circumstances of the case, whether the Tribunal is right in holding that, the Assessee is not entitled to claim benefit of deduction under Section 80P on the ground that Return was filed after the due date.

2. In the facts and circumstances of the case, whether the Tribunal was right in ignoring the fact that the Return was filed within the time prescribed after the receipt of notice under Section 148 of the Act.

3. Whether the Order passed by the CIT appeals without giving opportunity of hearing to the Assessee, is in violation of principles of Natural Justice and is liable to be set-aside."

4. Sri. Mahesh R. Uppin, learned counsel appearing for the appellant, submits that although the return of income was not filed within the due date prescribed under Section 139(1) of the Act, the same was filed in compliance with the notice issued under Section 148 of the Act and within the time stipulated 4 (2023) 459 ITR 730 - 5 - NC: 2026:KHC:332-DB ITA No. 57 of 2025 HC-KAR therein. It is therefore contended that the requirement of Section 80AC of the Act stands satisfied. Learned counsel further submits that the judgment of the Kerala High Court is not applicable to the facts of the present case.

5. Considered the submissions of learned counsel and perused the appeal papers.

6. Undisputedly, the assessee did not file the return of income within the due date prescribed under Section 139(1) of the Act. Based on information relating to cash deposits in Chikkamagalur District Central Co-operative Bank Ltd., the Assessing Officer issued a notice under Section 148 of the Act, since income had escaped assessment. Pursuant thereto, the assessee filed its return of income in compliance with the notice issued under Section 148 of the Act, claiming deduction under Section 80P of the Act.

6.1 The claim for deduction under Section 80P of the Act is governed by the provisions of Section 80AC of the Act, which reads as under: - 6 - NC: 2026:KHC:332-DB ITA No. 57 of 2025 HC-KAR "80AC. Where in computing the total income of an assessee of any previous year relevant assessment year commencing on or after— (i) (ii) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80- IE; the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading "C.—Deductions in respect of certain incomes", no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139."

7. In view of the amendment introduced by the Finance Act, 2018 with effect from 01.04.2018, no deduction under any provision of Chapter VI-A under the heading “C” shall be admissible unless the assessee furnishes a return of income for the relevant assessment year on or before the due date specified under sub-section (1) of Section 139 of the Act.

7.1 Section 80P of the Act falls under Chapter VI-A under the heading “C” — Deductions in respect of Certain Incomes. Consequently, any claim for deduction under Section 80P of the Act must necessarily satisfy the mandatory requirement prescribed under Section 80AC of the Act. - 7 - NC: 2026:KHC:332-DB ITA No. 57 of 2025 HC-KAR

8. Undisputedly, in the present case, the assessee did not file the return of income on or before the due date specified under sub-section (1) of Section 139 of the Act. After the expiry of the said due date, the income escaped assessment and the Assessing Officer reopened the assessment by issuing notice under Section 148 of the Act.

9. The assessee filed a return of income claiming deduction under Section 80P of the Act in compliance with the notice issued under Section 148 of the Act. By no stretch of imagination can a return of income filed pursuant to a notice under Section 148 of the Act be construed as a return filed within the due date specified under sub-section (1) of Section 139 of the Act. The due date prescribed under sub-section (1) of Section 139 had expired much prior to the issuance of notice under Section 148 of the Act and the same would not revive on issue of notice under Section 148 of the Act.

10. The CIT(A) and the Tribunal, having duly considered the aforesaid legal position, have rightly held that the assessee is not entitled to claim deduction under Section 80P of the Act, - 8 - NC: 2026:KHC:332-DB ITA No. 57 of 2025 HC-KAR having failed to file the return of income within the due date specified under sub-section (1) of Section 139 of the Act.

11. This Court, upon consideration of the provisions of Sections 80AC and 139 of the Act, is of the considered opinion that the findings and conclusions recorded by the CIT(A) and the Tribunal are fully justified. The order passed by the Tribunal does not warrant interference by this Court.

12. In the light of the above, no substantial question of law would arise for consideration of this Court. Accordingly, the appeal is dismissed. Sd/- (S.G.PANDIT) JUDGE Sd/- (K. V. ARAVIND) JUDGE VBS/List No.: 1 Sl No.: 41