In Case: M/s Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana Sangham V. The Commissioner of Income Tax.
It is held by the Kerela High Court that the pre-condition for claiming the deduction under Section 80 P of the IT Act has now been made more strict by reducing the time available to a petitioner for making the claim.
It has been noticed by the bench of Justice A.K Jayasankaran Nambiar and Justice Mohammad Nias C.P that the claim for deduction under Section 80 P is conditional to filing a return with the due date prescribed under Section 139(1) of the Income Tax Act.
The petitioner is a Labour Co-Operative Society that was formed for the financial and social welfare of toddy tappers and workers and for tapping and selling toddy within the jurisdiction of Nileshwar.
For the estimation year 2009-10, the petitioner had not filed any return of income. Assuming that the petitioner had income chargeable to tax that had to abscond estimation, the authority issued a notice under section 148, requiring the petitioner to prepare a return of income within 30 days of receipt of the notice.
The petitioner made a default to file the return of income in reply to the notice under section 148. A return was although filed by the petitioner on 5th July 2012, which was much beyond the date of filing in terms of Section 139(4) of the IT Act. On 31st March 2011 or before, the income tax return for the estimation year 2009-10 should have been filed about Section 139(4).
Afterward, after the expiration period of the time allowed under Section 139(4), the return of income was filed. The Assessing Officer rejected it and said to complete the assessment.
At the time of completing the assessment, the claim of the petitioner for deduction was also rejected on the basis that the claim for deduction had not been made in a valid return filed by the petitioner.
The Officer observed that because of provision of Section 80P(2)(a)(3) made by the petitioner in return filed on 5th July 2012 for the estimation year 2009-10 and 2010-11 can be watched as a valid made for the object of Income Tax Act.
The Petitioner stated that a simple reading of Section 80A(5) clears that a claim in respect of deduction, inter alia under Section 80P, has to be made in return for income filed in an orderly for the deduction to be allowed.
The court held that the requirement claiming for deduction in a return of income filed by the petitioner can be viewed as a statutory pre-condition for asserting the benefit of deduction under the IT Act. It is stereotyped that a provision for deduction or exemption under a taxing statute has to be strictly interpreted against the petitioner and in favor of the revenue.
Thus stated, a failure on the part of a petitioner to obey the precondition for obtaining the deduction cannot be disregarded either by the statutory authorities or by the courts.
Name: Varsha Sukhwal. College: Parul University, Semester: 4th BALLB
