Top Stories Deduction u/s 80P of Income Tax Act cannot be allowed without filing Return of Income: ITAT By Aparna. M – On March 1, 2024 3:33 pm – 2 mins read Bangalore bench of Income Tax Appellate Tribunal ( ITAT ),held that deduction under section 80P of the Income Tax Act could not be allowed without filing return of income. The assessee Madhu Souharda Pathina Sahakari Niyamitha, is a cooperative society mainly involved in the business of providing credit facilities to its members and it  is in the status of AOP and did not file return of income within the time prescribed u/s. 139(1) & 139(4) of the Act. As per the information, the assessee had income above the taxable limit, accordingly notice u/s. 142(1) was issued on 09.03.2018 which was served to the assessee requiring it to file return for the AY 2017-18 within 08.04.2018, but the assessee failed to furnish the return.

Thereafter the AO issued another notice for calling the documents .in response assessee submitted the details . accordingly the AO concluded that Since the assessee did not file the return of income the assessee is not eligible for deduction u/s. 80P of the Act. Aggrieved, the assessee filed an appeal before the CIT(A) and the CIT(A) relied upon the decision of Kerala High Court in the case of Nileshwar Range Kallu Chethu Vyavasaya Thozhilali Sahakarana Sangham v. CIT held that without a valid return of income, deduction u/s. 80P cannot be allowed.Aggrieved, the assessee is in appeal before the Tribunal.

During the proceedings Assesee representative ,Sandeep Chalapathy argued that since it is a cooperative society, a liberal view should be applied as per the judgment of Hon’ble Supreme Court. Ganesh R. Ghale , the Department representative, relied on the orders of lower authorities and submitted that the AO noticed that in spite of having taxable income, the assessee did not file return of income and various opportunities were granted by the AO It was observed that for claiming deduction under Chapter VIA under the head, “Deductions to be made in computing total income”, which covers section 80P also, the assessee has to file return of income.

However, the assessee did not file return of income at all and therefore the assessee is not eligible for deduction u/s. 80P of the Act. After observing the submissions of both parties the two-member bench Of Laxmi Prasad Sahu, ( Accountant member ) and George George K, Vice President held that the assessee is not eligible for deduction u/s. 80P of the Act.