Circular 13/2023 Dated 26 July 2023 of Income Tax is issued to give relief to co operative societies
Subject: Condonation of Delay under Clause (b) of Sub-section (2) of Section 119 of the Income Tax Act, 1961 for Returns of Income Claiming Deduction under Section 80P of the Act for Various Assessment Years from AY 2018-19 to AY 2022-23 – Regulation.
Download Circular 13/2023 : https://incometaxindia.gov.in/Pages/communications/circulars.aspx
Background:
Section 80P of the Income-tax Act, 1961 provides for deduction in respect of income of co-operative societies under Chapter V1A-Part-C (“Deductions in respect of certain incomes”) of the Act.
In so far as section 80P of the Act is concerned, Finance Act, 2018 substituted section 80AC of the Act w.e.r. 01.04.2018 which provides as under:
Deduction not to be allowed until return furnished:
80AC. : Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after
(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 80IC or section 80-ID or section 80-IE;
(ii) The 1st day of April, 2018, any deduction is admissible lInder any provision of this Chapter under the heading “C” -Deductions in respect of certain incomes”,
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 (I) of section 139.
Applications Received:
Applications have been received in the Central Board of Direct Taxes (CBDT) from co-operative societies claiming deduction under Section 80P of the Act for various assessment years from AY 2018-19 to AY 2022-23.
The applications seek condonation of delay in furnishing the return of income and request to treat such returns as ‘returns furnished within the due date under sub-section (1) of Section 139 of the Act.’
The delay in furnishing the return of income was attributed to the delay in getting the accounts audited under respective State Laws.
Directive by the Board:
In order to mitigate genuine hardship, the CBDT, exercising powers under Section 119 of the Act, directs Chief Commissioners of Income-tax (CCsIT) / Directors General of Income-tax (DGsIT) to handle such applications of condonation of delay pending before the Board.
The CCsIT/DGsIT are authorized to decide such applications on merits, in accordance with the law.
Admittance of Applications:
The CCsIT/DGsIT shall admit all pending as well as new applications for condonation of delay in furnishing returns of income claiming deduction under Section 80P of the Act.
These applications can be filed either in the Board or in field formations for the assessment years 2018-19 to 2022-23, provided the applicant is required to get their accounts audited under respective State Laws.
Examination of Applications:
While deciding such applications for condonation of delay in furnishing return of income, the CCsIT/DGsIT shall ensure the applicant’s case is a fit case for condonation under the existing provisions of the Act.
The CCsIT/DGsIT shall examine the following factors:
(i) The delay in furnishing the return of income within the due date under sub-section (1) of Section 139 of the Act was caused due to circumstances beyond the control of the assessee, with appropriate documentary evidence.
(ii) Where the delay in furnishing the return of income was caused due to delay in getting the accounts audited by statutory auditors appointed under the respective State Law, the date of completion of audit vis-a-vis the due date of furnishing the return of income under sub-section (1) of Section 139 of the Act.
(iii) Any other issue indicating towards tax avoidance or tax evasion specific to the case, which comes to light during verification and has a bearing on the relevant assessment year or establishes a connection with other assessment years.
Cases falling under para (iii) above:
Cases with issues indicating tax avoidance or tax evasion will require further necessary action as per law.
Timeframe and Hearing:
The CCsIT/DGsIT shall preferably dispose of the application within three months from the end of the month in which such application is received from the applicant or transferred by the Board.
No order rejecting the application under Section 119(2)(b) of the Act shall be passed without providing the applicant an opportunity of being heard.
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