Navaikulam Farmers Welfare Co-Operative Society Ltd. NO.1731, v. Union of India

Kerala HC4 Oct 2023WP(C)/14224/2023

Case brief

AI extract

What is this about?

The Kerala High Court disposed of a writ petition challenging the disqualification for tax deductions under Section 80P due to belated return filing. The court directed the petitioner to seek condonation of delay from the Board of Direct Taxes.

What did the court decide?

Petitioner permitted to apply for condonation; enforcement of demand stayed for two months.

Navaikulam Farmers Welfare Co-Operative Society Ltd. NO.1731, Vs… — Income Tax | Kerala HC (2023)

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W.P.(C) No. 14224/2023 : 1 :

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH

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WEDNESDAY, THE 4^TH DAY OF OCTOBER 2023 / 12TH ASWINA, 1945

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WP(C) NO. 14224 OF 2023

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PETITIONER/S:

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NAVAIKULAM FARMERS WELFARE CO-OPERATIVE SOCIETY LTD NO.1731, NP1-835 KIZHAKKE NADA, NAVAIKULAM P.O, THIRUVANANTHAPURAM – 695 603, REPRESENTED BY ITS SECRETARY JAYASREE B.S. BY ADVS. K.P.PRADEEP HAREESH M.R. SANAND RAMAKRISHNAN T.T.BIJU T.THASMI M.J.ANOOPA SANU S MALAKEEL

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RESPONDENTS:

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1 UNION OF INDIA , REPRESENTED BY ITS SECRETARY, MINISTRY OF FINANCE, SANSAD MARG, NEW DELHI- 110 001.

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2 THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE, MINISTRY OF FINANCE GOVERNMENT OF INDIA, NORTH BLOCK NEW DELHI- 110 001, REPRESENTED BY ITS CHAIRMAN.

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3 DEPUTY COMMISSIONER OF INCOME TAX, CENTRALIZED PROCESSING CENTRE, INCOME TAX DEPARTMENT, BENGALURU, KARNATAKA- 560 500.

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4 ADDITIONAL COMMISSIONER OF INCOME TAX, INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110 003.

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5 COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110 003.

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6 STATE OF KERALA, REPRESENTED BY ITS PRINCIPAL SECRETARY DEPARTMENT OF CO-OPERATION GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM- 695 001.

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BY ADV. SRI. CHRISTOPHER ABRAHAM, SC

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04.10.2023, THE

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COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.P.(C) No. 14224/2023 : 2 :

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DINESH KUMAR SINGH, J.

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--------------------------------------------------------W.P.(C). No. 14224 of 2023

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Dated this the 4^th day of October, 2023.

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JUDGMENT

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The present writ petition has been filed by the petitioner impugning the provisions of Section 80AC of the Income Tax Axt, 1961 (‘Act, 1961’ for short) as substituted by the Finance Act, 2018, to the extent of requiring the filing of return within the due date as stipulated under Section 139(1) of the Act, 1961 for the purpose of claiming deduction under Section 80P of the Act, 1961.

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The petitioner has also challenged Exhibit P5 appellate order issued by the 5^th respondent, whereby the deduction claimed by the petitioner under Section 80P of the Act, 1961 has been denied on the ground that the petitioner did not file its return under Section 139(1) of the Act, 1961 in time. Section 80AC as substituted by the Finance Act, 2018, reads thus:

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'80AC. Deduction not to be allowed unless return furnished . —

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Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after—

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i. 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 80ID or section 80-IE;

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ii. the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading " C. —

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W.P.(C) No. 14224/2023

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: 3 :

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Deductions in respect of certain incomes ",

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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.'

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Thus, a person who claims deduction is required to file its return under Section 139(1) within the time prescribed for filing the return of income. However, if he files the return with delay as provided under Section 139(4) of the Act, 1961, a person becomes dis-entitled to claim deduction under Section 80P of the Act, 1961. The petitioner has been denied the benefit of deduction under Section 80P only on the ground that the petitioner did not file return under Section 139(1) as mandated under the provisions of Section 80AC of the Act, 1961.

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The learned counsel for the petitioner submits that the law restricts for claiming deduction only in case of the returns filed under Section 139(1). The provision restricting the claim for deduction comes under Chapter VI-A under the head ‘C.-Deduction in respect of certain incomes’ is discriminatory and arbitrary, as there is no basis for restricting the deductions in respect of returns filed under Section 139(1) of the Act, 1961 and not in respect of returns which are filed under Section 139(4) of the Act, 1961. When the Department accepts returns under Section 139(4) of the Act, 1961 disallowing the deductions in respect of certain incomes in

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W.P.(C) No. 14224/2023 : 4 :

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such a return is not based on any intelligible criteria to differentiate the returns filed under Section 139(1) and Section 139(4) of the Act, 1961.

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The learned Standing Counsel for the Revenue, on the other hand, submits that since the petitioner has filed the return belatedly under Section 139(4) of the Act, 1961, the same is an irregular return and therefore, he has been disallowed the claim for deduction under Section 80P of the Act, 1961 from his income as provided under Section 80AC of the Act, 1961.

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The learned counsel for the Revenue, however, submits that the petitioner may file an application before the Central Board of Direct Taxes, respondent No.2, who is the authority to condone the delay in filing return and also to issue an order treating the return filed under Section 139(4) of the Act, 1961 as the one filed under Section 139(1) of the Act, 1961 for the purpose of claiming deductions under Section 119(2).

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Considering the said aspect, the petitioner is permitted to file an application before the second respondent within a period of fifteen days from today; in that event, the second respondent shall consider the same in its proper perspective and pass orders thereon within 45 days thereafter. If the delay is condoned, the assessing authority will revise the order in respect of the claim of the

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W.P.(C) No. 14224/2023

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: 5 :

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petitioner for deduction under Section 80P of the Act, 1961. It is made clear that the demand in pursuance to Exhibit P2 assessment

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order shall not be enforced for a period of two months.

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Writ petition stands finally disposed of.

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sd/-

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DINESH KUMAR SINGH, JUDGE.

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W.P.(C) No. 14224/2023

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: 6 :

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APPENDIX OF WP(C) 14224/2023

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PETITIONER’S EXHIBITS:

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Exhibit P1	TRUE COPY OF THE ACKNOWLEDGEMENT OF INCOME TAX RETURN DATED 25-2-2019 FILED UNDER SECTION 139 (4) OF THE INCOME TAX ACT, FOR THE ASSESSMENT YEAR 2018-19
Exhibit P2	TRUE COPY OF THE INTIMATION U/S 143(1) OF THE INCOME TAX ACT, 1961 WITH DIN NO CPC/1819/A5/1901973435 DATED 31-05-2019 ISSUED FOR THE YEAR 2018-19 BY THE 3RDRESPONDENT
Exhibit P2 (a)	TRUE COPY OF THE ASSESSMENT ORDER NO ITBA/AST/S/143(3)/2021-221032485542(1) ISSUED FOR THE YEAR 2018-19 BY THE 4TH RESPONDENT
Exhibit P3	TRUE COPY OF THE DEMAND NOTICE NO ITBA/AST/S/156/2021-221032485561(1) DATED 17-4- 2021ISSUED FOR THE YEAR 2018-19 BY THE 4TH RESPONDENT
Exhibit P4	TRUE COPY OF THE APPEAL IN EXT P2 ORDER DATED 12-07-2019 FILED FOR THE YEAR 2018-19 BEFORE THE 5TH RESPONDENT BY THE PETITIONER
Exhibit P4(a)	TRUE COPY OF THE APPEAL IN EXT P2 (A) ORDER DATED 17-5-2021 FILED FOR THE YEAR 2018-19 BEFORE THE 5TH RESPONDENT BY THE PETITIONER
Exhibit P5	TRUE COPY OF THE ORDER UNDER SECTION 250 OF THE INCOME TAX, ACT DATED 08-02-2023 ISSUED FOR THE YEAR 2018-19 BY THE 5TH RESPONDENT
Exhibit P6	TRUE COPY OF THE ORDER DATED 10-2-2023 OF THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH IN AMBARADI SEVA SAHKARI MANDALI LTD. VS DCIT (CPC)
Exhibit P7	TRUE COPY OF THE ORDER IN W.P(C) NO.13195 OF 2023 DATED 12-04-2023

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RESPONDENTS’ EXHIBITS: NIL

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True Copy

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PS To Judge.

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Navaikulam Farmers Welfare Co-Operative Society Ltd. NO.1731, v. Union of India

Case brief

What is this about?

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Navaikulam Farmers Welfare Co-Operative Society Ltd. NO.1731, v. Union of India

Case brief

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