High Court of Karnataka · Judgments and reasoned final orders
Madhu Souharda Pathina Sahakari Niyamitha v. Income Tax Officer, Ward-1 & TPS, Tumkur
Income Tax Appeal No. 207 of 2024 ·
Denial of deduction under Section 80P in a best-judgment assessment under Section 144 for AY 2017-18 where a cooperative society failed to file any return of income under Section 139(1), 139(4), or 142(1), applying the mandatory bar in Section 80A(5) and Section 80AC.
1. FACTS OF THE CASE
The appellant, a souharda cooperative credit society, did not file a return of income for AY 2017-18 either under Section 139(1) or in response to notices under Section 142(1). The Assessing Officer completed a best-judgment assessment under Section 144 and denied deduction under Section 80P in view of Section 80A(5). Both the CIT(A) and the ITAT upheld the denial of Section 80P deduction.
2. DISCUSSION BY THE COURT
The Division Bench examined the express mandate of Section 80A(5), which stipulates that where the assessee fails to make a claim in his return of income for any deduction under Chapter VI-A under the heading 'C.—Deductions in respect of certain incomes' (which includes Section 80P), no deduction shall be allowed to him thereunder. Expressing agreement with the Kerala High Court judgment in Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana Sangham v. CIT (2023) 459 ITR 730 (Ker), the Court held that filing a return of income claiming the deduction is a mandatory statutory precondition under Section 80A(5), and a cooperative society that filed no return at all cannot claim Section 80P deduction in a Section 144 assessment.
3. JUDICIAL DECISION
Answering the substantial questions of law in favour of the Revenue and against the assessee, the High Court dismissed the appeal.
4. OUTCOME
Revenue - Assessee appeal dismissed; denial of Section 80P deduction under Section 80A(5) affirmed.
5. AKHB REVIEW POINT
Unlike belated returns where delay may be condoned under Section 119(2)(b), complete non-filing of a return culminating in a Section 144 best-judgment assessment triggers the absolute bar of Section 80A(5) against claiming Section 80P deduction.
Source and verification
10-page official High Court of Karnataka judgment PDF (20260113_KAHC010354942024.pdf, 105,935 bytes).
Original PDF: 10 pages · SHA-256: 5cfb122283c355f4c6cee2b3dc8209c821bba8c31d020dcc40b59a3c0423f8cb
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Applies Sections 80A(5), 80AC, 80P, and 144 of the Income-tax Act, 1961 for AY 2017-18. Income-tax Act, 2025 equivalence is not verified.
Full 10-page primary judgment PDF text read and verified page-by-page. Agrees with the Kerala High Court Division Bench ruling in Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana Sangham v. CIT (2023) 459 ITR 730 (Ker).
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