Syndicate Bank Employees Co-Operative Thrift & Credit Society Limited vs Income Tax Officer

PER VIKAS AWASTHY, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 27.02.2026, for Assessment Year 2018-19.

The assessee in appeal has assailed the order of CIT(A) in not allowing the benefit of deduction u/s.80P of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

Shri Nitin Gulati, appearing on behalf of the assessee submits that the assessee is a Cooperative Society. The assessee during the period relevant to assessment year under appeal had earned interest income from a Cooperative Society engaged in banking business. On the said interest income, the assessee is eligible to claim deduction u/s.80P(2)(a)(i) of the Act. The due date for filing return u/s.139(1) of the Act was 30.09.2018, the assessee filed its return of income on 07.02.2019. The Assessing Officer (AO) completed the assessment u/s.143(3) of the Act disallowing assessee’s claim of deduction u/s.80P of the Act by invoking provisions of section u/s.80AC of the Act, as the assessee had filed return of income beyond the statutory due date of 30.09.2018. The ld. Counsel pointed that the CBDT had issued Circular No.13/2023 dated 26.07.2023 empowering the Principal Chief Commissioner of Income Tax/Chief Commissioner of Income Tax to condone delay in filing of returns of Cooperative Society u/s.119(2)(b) of the Act. The assessee had filed an application u/s.119(2)(b) of the Act read with CBDT Circular No.13/2023 (supra) before the Competent Authority on 02.06.2026 for condoning delay in filing of return of income. The ld. Counsel submits that the matter can been remitted back to the AO to await the decision of Competent Authority on the aforesaid application of the assessee.

Per contra, Shri Manoj Kumar, representing the Department vehemently defended the impugned order prayed for dismissing assessee’s appeal. The ld. DR submits that the assessee was required to file return of income before the due date i.e. 30.09.2018 for claiming the benefit of section 80P(2) of the Act. The said period was prior to Covid-19 pandemic, hence, the assessee cannot take the benefit of CBDT Circular No.13/2023 (supra).

Both sides heard, orders of the lower authorities examined. The assessee in its return of income has claimed the benefit of section 80P(2) of the Act on the interest income earned during the relevant period. The AO disallowed assessee’s claim of deduction in light of provisions of section 80AC of the Act, Admittedly, the assessee filed its return of income for AY 2018-19 beyond the due date for filing return of income u/s.139(1) of the Act. The assessee has filed an application dated 02.06.2026 u/s.119(2)(b) of the Act before the Competent Authority for condonation of delay in filing of return of income. The said application is stated to be pending before the Competent Authority. Considering entire facts, I deem it appropriate to restore this issue back to the AO to await the decision of Competent Authority on the application of the assessee u/s.119(2)(b) of the Act. The AO shall pass the order giving effect in accordance with law after the decision on the aforesaid application of the assessee.

In the result, appeal of the assessee is allowed for statistical purposes.